Sounding Off: Small operators feel the squeeze (it's perfectly normal)
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“All [Viator] seems to be doing is pushing operators with not much budget more toward Google and giving them more power to charge what they want.”
Quote from Ana Karina Araque, co-founder of Imagine Experiences, in an article on PhocusWire this week on Viator’s new commission structure.
Distribution in tours and activities, some might suggest, is in a bit of a transition phase.
Others also might propose that it’s actually bit of a mess.
But it only mirrors what happened in hotel distribution online and, to a lesser extent, air ticket bookings some years ago.
Powerful online travel agencies often have the inventory and the capability to do what they want when it comes to commissions (as they did in hotels), knowing that they act as the helpful conduit or marketplace between shoppers and the providers of activities.
It’s what’s known as evolution, for better or worse.
Viator’s recent changes will be inevitably be debated in activity operator forums and on LinkedIn posts over the weeks and months ahead – that’s the nature of change, whether it’s considered unfair or not.
The reality, however, is that operators will figure out new strategies (they have to, there’s no other path other than the status quo) for their distribution strategy that do eventually push them more toward Google and other players.
But the market will eventually settle down and the next development will follow in the coming months or years.
This is not to say that Viator’s move (it would obviously not have done this if it thought it would eventually lose out financially or strategically) is a storm in a teacup, as the saying goes, but it is a fairly routine development in the maturing of a sector.
The tours, activities and experiences sector still lags way behind the likes of hotels and air when it comes to digitalization of product and some form of normalization around distribution.
Many will consider that the hand-wringing is warranted and intermediaries should be punished for, well, punishing their suppliers of inventory.
Some would also argue that it would be worth taking a step back, at least momentarily, to consider that such growing pains are part of the process of getting a sector up to speed.
Capitalism and its overarching principle of competition means that companies will do whatever they like to position themselves in a way that serves their needs. Altriusm and fairness rarely exist in business.
The sooner the sector realizes this, the quicker it can move on and find new opportunities.
