Components of tourism industry

Phocuswright-The Trusted Analyst of Components of Tourism Industry

For more than a decade, Phocuswright has sized and assessed the U.S. travel marketplace and the major trends that shape how travelers shop for and purchase travel. Distribution trends across air, lodging, car rental, cruise, packages, and rail are well understood. But the travel industry has lacked essential market data on a central element of the travel landscape: what leisure travelers do “when they get there.” These are essential components of tourism industry that many travel industry insiders forget to consider as part of their overall strategy.


The travel activities market includes a broad range of different types of activity providers


of varying sizes and degrees of technological sophistication. This variation precludes a one- size-fits-all approach. A multinational amusement park shares little in common with a local surfing-lessons business run out of a hut on the beach. A large share of the activity provider’s landscape is comprised of small, local providers, many of which have little or no integration with the travel distribution chain.


Components of tourism industry and the activities


To gain a clearer picture of activity provider technology, marketing, and distribution practices, Phocuswright undertook a directional email survey of activity providers, fielded through project sponsors and other travel industry partners. As a result of this methodology, survey respondents may be more likely than the general provider population to be engaged with the travel industry and reliant on travelers rather than local residents.


The activity landscape is comprised mostly of small providers, with more than three out of five reporting under $1 million in revenue (see Figure 16). One third of providers report gross sales of less than $250 thousand. Notably, because many respondents were providers that were working with travel distribution intermediaries, the survey sample is likely skewed toward larger companies. The Long Tail of small activity providers may be even longer than these revenue numbers indicate.


When providers do embrace online distribution, the most commonly used online channel is the provider’s own website; 58% report provider direct website sales. Forty-five percent of providers use destination marketing organizations, while roughly four out of 10 use traditional agents, tour operators, and online travel agencies. Multi-attraction passes attract 17% of providers, and museums/attractions are most likely to distribute through that sales channel.


Although the incidence of online distribution is relatively low among activity providers, online channels are growing the fastest. Reliance on provider websites, online activity specialists, and online travel agents is increasing, while distribution through travel agents and tour operators is in decline. Many activity providers as Components of tourism industry, are focusing on direct distribution, deterred from working with online intermediaries predominantly because of cost and display restrictions that limit how products can be presented.