What does technology innovation in sightseeing & experiences look like in 2023?

In the last couple of months there has been a whirlwind of tech news much of it lead by discussion about generative AI such as ChatGPT. But underneath all of that, innovators in our sector have begun to tentatively hint at what they are focussed on.

Therefore it is worthwhile documenting what people have said, plus also think about who has the right positioning & team structure for what comes next.

Broadly, you can think of everyones post ChatGPT mindset as one of these:

1. Optimise what already works rather than do anything substantially new – which seems where GetYourGuide and Holibob are positioned
2. For those at the top of the consumer funnel, they are thinking about reaching deeper into tour design – setting up to compete with their own tour suppliers & advertisers – which is where Tripadvisor & Bing are active
3. Or my more extreme mindset – everything changes as a result of AI and we need to replace the current industry structure with my Digital Experience Platform approach or similar

Lets get some statements on the record

GetYourGuide

“as you look towards the future on what I’m very excited about is is the prospect of building the best vertical search engine in experiences”

Holibob
“As we continue to expand distribution opportunities for operators, we’ll need to look at ways to continuously improve and simplify product structures across the entire ecosystem with a focus on customer experience”

via Stephen Joyce

Tripadvisor

“We will deliver this content through essential trip planning tools that are more useful to travelers than anything else offered today. This includes both pre-trip planning, when travelers are building the perfect itinerary, as well as in destination when travelers are making immediate decisions about what to do next”

via Phocuswire

Microsoft Bing
This is Leo’s LLM prompt. Leo is the travel assistant variant of Sydney, in Bing Chat (GPT):

• Leo can help users find and book various travel destinations, flights, hotels, and activities.
• Leo can provide information about the latest travel news, tips, guides, and reviews.
• Leo can answer any questions the user might have about travel, and give advice, feedback, and recommendations.
• Leo can create personalized travel itineraries, plans, and budgets for the user, and show them how to do it.
• Leo can suggest travel challenges, contests, and quizzes for the user, and guide them through the steps
• Leo can share fun facts, trivia, and stories about travel, and inspire the user to explore the world and experience different cultures.

While not an announcement (as such), and unofficial, it does hint at what Microsoft Bing are considering.

Six questions

This leads me to pose six questions, based on the expectation that innovation in the post GPT era is likely to be significant rather than iterative:

Which teams have the right balance of knowledge to innovate in this environment?

There are four main areas that need to be incorporated into any new industry wide innovation:

• Generative AI – images, stories, audio, itineraries etc
• Autonomous vehicles (Robotaxis, but soon hospitality centric autonomous vehicles)
• Decentralised web (SSI, DIDs & DWNs)
• Sustainability

No use just mastering one, you have to master one and be competent in three, or master two and be competent in two.

You don’t have to have deep knowledge on how the the industry currently works. e.g Innovation should not seek to recreate what has gone before, we are solving based on new technology capabilities and new consumer expectations as to how technology should work.

Deep industry knowledge might actually be a disadvantage as it might tempt you to consider iteration rather than revolution.

Who has a well trained innovation muscle now?

Innovation is like physical fitness, if you don’t practice it, you lose it.

Back in the day the majority of sector CEOs wrote blog posts at least monthly. This was illuminating at many levels, but generally it made the sector leaders, and their readers, think more about innovation. Even if they were not innovating much in their daily businesses, they were at least exercising their innovation muscles.

Those days are gone. We do however have a new generation of sector entrepreneurs with youtube shows, newsletters, podcasts etc. But none of those are focussed on technology innovation within our sector.

With massive changes as a result of AI on multiple fronts, in particular on product side rather than distribution & retail as before, everyone needs their innovation muscles well trained as we head into 2023 / 2024.

Who has the capability to move unilaterally?

Let’s say you come up with a new way of designing, distributing or operating experiences. The key question is, who can unilaterally change to it?

• Tour ops can’t – they are too reliant on others for their technology
• Rez tech can’t, even though they have the tech skills to build technology to enable a new model, they are locked into supporting the companies upstream and downstream of them
• OTAs won’t, they are too fixated at being a retailer layer because that is how it also works in flights & hotels. They may not understand the need to have a completely different model in one vertical to others

However OTAs are the only one of the three (OTA > Rez tech > tour operator) who can move unilaterally, so ultimately they will move first, just late.

My judgement is that tour guides will be the first to move.

Who is happy with OK tours rather than amazing tours?

Any AI centric tour experience is for the next few years just going to be OK. That is the top end outcome as digital is so hard to execute consistently and there are so few people working on digital tour operating.

But now think about how OK will be accepted by the sightseeing & experience industry that we all are part of. The conferences tend to attract each region’s best (as attendees), and the very best (as speakers), this isn’t a market that is ready to accept “OK”, even for the short term.

Asking companies focussed on being the best to become just OK, even temporarily, is a super tough sell. But the first to learn how to scale an “OK” experience will be the one that wins the next generation of tour operating.

Who is prepared to sacrifice their moats?

Viator has 7000 bookable things to do in Rome.

A startup doesn’t need to chase 7000 bookable things to do in Rome in order to compete with Viator. A generative AI layer and 300 bookable things to do in Rome would be sufficient.

It is unlikely that Viator will sacrifice what they perceive as their moat, however if it is no longer a moat, then there is no reason not to.

Will they and other OTAs sacrifice their supply moats?

How many VC funded industry layers are required in this industry?

VC funding, for the right company, fuels expansion. However what we can’t have is too many VC backed companies connected in series.

e.g. a VC backed OTA sending business to a VC backed channel manager or rez tech sending business to a VC backed mobility platform. As each tries to expand their influence, chaos ensues. Put two or three VC backed entities in series and that chaos comes sooner rather than later.

Final thought

Innovation is going to be the 2023 debate! As an innovator focussed on how to apply AI to the design, distribution and operation of consumer tourism & hospitality experiences, this is exciting!

Image: Stable Diffusion AI. Not quite sure what sacrificing a moat may look like in practice, AI thinks it might look a bit like this