Loco Over Local: Four Trends Reshaping Tourism

15th Feb 2010
Loco Over Local: Four Trends Reshaping Tourism

The travel industry has a pretty good handle on many aspects of its marketplace. For example, we know how many people in the U.S. travel, how often, what products they purchase, how they purchase them and how much they spend. We also know a great deal about the different segments of the travel industry: the transportation and accommodation elements of travel. But when it comes to the things travelers do when they get there—in-destination activities and services—we know surprisingly little.

Local activities, events, attractions and services have long been overlooked—or passed over—by the broader travel industry. The domain is highly fragmented, with myriad small players operating low-margin independent businesses with little automation. But there are four major trends in Web and mobile technology that are poised to transform this domain, opening entirely new opportunities for travel providers to deliver relevant, contextual content based upon a traveler’s location, preferences and profile. This will change how travelers travel.

Mobile: Relevance, context and location are key to successful mobile strategies. Rapid advances in geo-tagging and GPS-empowered applications, online mapping services, contextual and location-based search and rich mobile applications are finally beginning to provide powerful, relevant services and content to travelers during their travel and in destination. Well-executed, context-aware travel apps will change how travelers choose what to do, where to go, what to buy—all while on the road. Not only will mobile travelers be able to enhance the travel experience with a variety of location-specific content, but content providers will leverage new opportunities to target their customers with highly relevant information, deals and offers based on where they are. Mobile apps from Priceline, OpenTable, and many others, instantly serve up offers based on traveler location, while innovations such as augmented reality enable travelers to learn about and choose services within their local environment as never before. This is just the beginning.

Social Networks: In addition to leading mobile social networks, Foursquare and Gowalla connect a user’s social network and location via their mobile applications. There is also a bevy of startups—NextStop, Joobili, EveryTrail, Trazzler, WhereIveBeen and others—focused on local destination content in a social networking context, enabling travelers to share experiences and get recommendations from others in the network. Twitter recently introduced a geotagging API to its service, opening up location-based targeting for travelers and travel companies alike.


Search: Local activities and services are getting a lot of attention from some pretty big players. While Yelp is focused on this domain, Google has been stepping up its efforts here dramatically, soliciting user reviews for just about every type of product and service and introducing new services such as Google City Tours. Online travel startups Goby and OpenPlaces are taking a very search-centric model to deliver targeted local destination content and information to travelers.

SaaS and Web 2.0+: Most local tour and activity providers are small businesses with limited automation to support reservations, online booking, sophisticated inventory management and third-party distribution. But new Web technologies and software delivery models, such as Software as a Service (Saas), are finally putting modern technologies within reach of this industry and enabling local suppliers to better market to and engage prospective customers and participate in the broader travel distribution ecosystem.

While still in its formative stages, the convergence of innovation in mobile, social, search and SaaS is already changing how travelers discover and decide what to do while traveling. Travel providers and in-destination service providers: the time to get off the sidelines is now.

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.(JavaScript must be enabled to view this email address), senior director, research.


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