The managing director of Tui Destination Experiences told delegates at the ITT conference in Split that tours and activities is not only lucrative but also improves customer satisfaction and loyalty.

David Schelp reported that with a value of €160 billion, tours and activities is the third largest segment in tourism after hotels and flights, and is growing at a rate of 7-8% per year globally, while tourism overall is growing at only 4-5% per year.

Shelp pointed to the fragmented nature of the tours and activities sector, and the fact only 20% of tours and activities are bookable online (versus 80% of hotels) as making the sector attractive to start-ups and new business models as well as established travel companies.

“It’s become the next big battleground in tourism,” he claimed.

But companies who invest in the sector will not only increase revenue, he added.

“Research shows that NPS scores from customers who have gone on an excursion during their holiday are 18% higher than those who do not, and unlike some other channels of ancillary revenue it actually enhances your brand, and it drives loyalty,” he reported.

Shelp highlighted the food-and-drink category within tours and activities as the one with most untapped potential. “To be able to scale that up in a business context would be significant,” he said.

He also urged companies considering moving into the tours and activities sector to work with an established player like Tui who offers sourcing, distribution and delivery of products, unlike some “new kids on the block”.