Why it matters:
- In the post-COVID ‘experience economy,’ consumers, especially millennials, would rather spend on experience-related purchases than material things, a trend that’s helped the travel industry bounce back from pandemic losses.
- As consumers’ search for products and services, including travel, increasingly happens online, they’re turning to more curated platforms that meet their specialized needs, from Booking.com for hotels to Airbnb.com for rental homes in the hospitality space.
- Against that backdrop, GetYourGuide, which scored a $1 billion-plus evaluation, is digitizing the booking process for travel experiences via an online marketplace that offers millions of day tours and activities from SMBs around the globe.
They’re looking beyond aromatherapy spas and Michelin-star hotel restaurants.
A burgeoning breed of consumers, many of them millennials, are seeking out travel journeys that scratch their itch for one-of-a-kind experiences.
Online travel agency GetYourGuide says it’s built a business with a $1 billion-plus valuation by delivering just that. It’s tapping tech and local tour guides worldwide to bring consumers a digital marketplace of bookable vacation moments — from a breakfast buffet in the Vatican to a selfie-free Chicago afternoon with a professional photographer intent on shooting your day tour with a local’s eye, no “cheesy smiles and poses” allowed.
It's also creating an online sales platform for the countless small businesses whose brochures hawking more conventionally touristy activities have long been a familiar sight in hotel lobbies worldwide.
These range from small, local tours from indie operators like a one-hour cruise on the Seine in Paris to mainstream attractions like Madame Tussauds wax museum.
Monetizing the post-COVD experience economy
GetYourGuide’s growth marks the rise of the post-COVID experience economy, whereby consumers spend more on making memories than buying things.
The trend underscores the growing influence and purchasing power of millennials, the nation’s largest consumer cohort, 78% of whom favor experiential purchases over material ones, CEO Johannes Reck said during a New York City conference held by travel news platform Skift, attended by CO—.
GetYourGuide has carved a differentiated niche in the online travel space alongside platforms like Booking.com and Airbnb by “unlocking the world’s unforgettable experiences to serve customers in a meaningful way,” he said.
Digitizing the booking experience for travel tours and activities amid small businesses’ bold post-COVID push online
As more of consumers’ search and discovery journey for products and services moves online, GetYourGuide’s growth reflects the natural evolution of the travel industry’s digital transformation, Seth Borko, Senior Research Analyst for Skift Research, told CO—.
That shift began with the rise of online marketplaces like Expedia and Hotels.com, which served up thousands of flight and hotel bookings online that had long been the purview of travel agencies.
And just as Airbnb gave short-term home rental owners a digital platform for their properties, GetYourGuide “has focused on digitizing the booking experience for day tours and attractions,” offering consumers a convenient way to unearth and purchase local activities, he said.
GetYourGuide is one of several platforms for travel tours such as Viator and Klook that took flight when the pandemic hit, as small in-person businesses were forced to set up shop online to survive. Indeed, “COVID drove the digitization of small businesses,” Borko said. “Suddenly the guy running a surf shop who was [planning] his calendar with a white board out of a beach shack needs to move to an online calendar if he wants to drive bookings because so much of the consumer shopping experience went digital during the pandemic,” he said. “While it was terrible being shut down, it also meant that a lot of these businesses got a chance to reset, maybe they never had the free time to set up a new online booking system. You all of a sudden had a need to move online to attract more customers, and the time to make the big switch."
[Read: Hospitality Execs from Airbnb and Google to Marriott Reveal Key Growth Strategies]
GetYourGuide is one of several platforms for travel tours such as Viator and Klook that took flight when the pandemic hit, as small in-person businesses were forced to set up shop online to survive. Indeed, “COVID drove the digitization of small businesses,” Borko said.
Riding the ‘verticalization’ trend: ‘Consumers are looking beyond Google for search’
As consumers’ online search for goods and searches becomes even more idiosyncratic, GetYourGuide’s time has come, said Reck.
The last 10 years have been dominated by general search engines like Google with travel-related queries such as, “‘Things to do in New York City,’” he said. Now, “consumers are looking beyond Google for search” to niche sites for niche queries, like Airbnb for home rentals, for example, noting the shift toward “verticalization.”
Indeed, consumers increasingly tap niche search platforms and even social media sites to bypass a deluge of digital data and unearth specialized search results.
Travelers’ drift to vertical search has enabled GetYourGuide to outpace online travel platforms in the tours and activity space, “as we excel at experiences because we are just focused on experiences,” Reck said. “We’re solving this very complex problem.”
A digital marketplace that links travelers to thousands of local tour guides and ‘experience creators’
Local tour guides are the beating heart of GetYourGuide, which Reck co-founded in 2009 while he was a student at the Swiss Federal Institute of Technology.
GetYourGuide’s two-way online marketplace connects travel customers directly to 16,000-plus tour guides and “experience creators.” These local operators deliver one million activities on the site ranging from adventure excursions to cooking classes to skip-the-line ticketed events.
The platform “digitally connects supply and demand, enabling consumers to experience unforgettable moments of discovery and joy, while helping experience creators simplify today’s digital travel reality and grow in ways they would not have been able to on their own,” Reck told CO—.
GetYourGuide’s “bucket list” experiences range from the Vatican breakfast to a behind-the-scenes look at New York’s City’s theater scene via access to the rehearsal studios of an off-Broadway show, Reck told CO—. “The most successful experiences are typically people who used to be one-man bands and small companies just a few years ago,” he said during the Skift conference.
Personalization powered by artificial intelligence and machine learning
Machine learning (MI) catalyzes GetYourGuide’s recommendation algorithm personalizing offers for its users.
The site trains algorithms to suggest different itineraries according to travelers’ preferences and circumstances, Reck told CO—. “For example, a middle-aged couple visiting Paris for the fifth time will want different experiences recommended, compared with a young family visiting for the first time.”
That personalization stands to reach new customer-curation heights this year, he said, as advances in artificial intelligence (AI) make a seismic leap, evidenced by the feverish buzz surrounding ChatGPT, the chatbot that interacts in ways that are eerily human.
“Artificial intelligence (AI) and machine learning (ML) will play a significant role in the future of digitized travel due to complex AI and ML tools entering the mainstream, like ChatGPT,” Reck said. “This will help to improve search result accuracy and relevant itinerary generation. AI can create fully fleshed-out itineraries in an instant based on your preferences and destination and make real-time alterations without anyone having to manually edit any documents.”
The next phase of growth: Partnering with big businesses like Disney
Although GetYourGuide has grown big by thinking small and local, it’s next phase of expansion will come from partnering with mega businesses like Disney, he said. These legacy companies, which now want a piece of the online travel booking business, are courting the startup “to unlock value to them by co-creating exclusive and memorable experiences on GetYourGuide,” he said.
Reck said GetYourGuide is profitable in its core markets in Europe, “entering 2023 well capitalized and fully funded.” As he sees it, the future of travel “is more digital than ever and thrives on the rapidly growing need for lasting memories,” he told CO—. “[We’re well positioned] to continue on our high growth path by capturing further market share in 2023 and beyond.”
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