What is an Experience provider?
An experience provider is any business that provides an experience related service to travellers or locals. These experiences may be in the form of a tour, activity, excursion, attraction, or event and may include services such as sightseeing tours, outdoor adventure activities, water based activities, factory or facility tours, concerts or musical events, and countless other experiences.
Experience providers make up the experiences segment also know as the tours and activities segment of the travel industry. The experiences segment is the third largest segment of travel behind air and hotels, and is larger than the cruise or car rental segments. The experience providers that make up the segment are predominantly small and medium sized businesses, 60% of which generate less than $250K USD in revenues per year.
On average, experience providers generate over 80% of their revenues from direct sales to travellers either online or when the guest is in location. Resellers and OTAs account for less than 4% of total revenues but are moving aggressively into the experiences segment hoping to control demand. Resellers and OTAs refer to experience providers as “Suppliers”, a derogatory term which implies the provider is nothing more than a source of supply for resale.
* Data from Phocuswright Global Tours and Activities Report – 2016