The next big battle in travel isn’t about where people sleep or how they get there… it’s about what they actually do once they arrive.
The Experience Economy Goes Mainstream
For years, “experiential travel” was a buzzword – something marketing teams tossed around to sound more lifestyle-friendly. Today, it’s become the industry’s next major land grab. From the IPO of Asia-based Klook to Airbnb’s relentless push to “live like a local,” the world’s biggest travel brands and dozens of new challengers are racing to own the in-destination experience.
The logic is clear: flights and hotels are often commoditized. Experiences are personal, emotionally charged, and still wildly fragmented. Whoever can aggregate supply, simplify discovery, and deliver a seamless digital booking path stands to capture billions in new value.
By the Numbers
- Global “tours and activities” market estimated at US$250–$310 B annually, part of a US$3.0T “experience economy.”
- Less than 25% of bookings currently happen online leaving a massive digitization runway.
- Post-pandemic travelers spend 20–30% more on experiences than before 2020, according to McKinsey.
From Afterthought to Growth Engine
Viator was among the first movers, building a long-tail supply marketplace before most travelers had mobile connectivity. TripAdvisor acquired it for its cross-sell potential, but the platform struggled with quality control and inconsistent fulfillment – a symptom of an industry still built on paper vouchers and phone calls.
Fast forward to now: technology has finally caught up with traveler expectations. Real-time availability, instant confirmation, and mobile inventory management make experiences bookable like hotels or flights. Meanwhile, social platforms have turned destination “moments” into content currency that is aggregating a younger audience that sees value in doing, not owning.
The Players and the Plays
Airbnb reframed experiences as the essence of travel. Its “Airbnb Experiences” initiative wasn’t just ancillary revenue — it was strategic positioning around authenticity and belonging.
Online travel agencies (OTAs) like Expedia and Booking.com dabbled early, but with mixed commitment and success. The segment never delivered hotel-level margins, and operational complexity scared off many. That’s changing fast: with platforms like GetYourGuide, Klook, and new white-label infrastructure players, these same OTAs see another shot at building a scalable, high-margin product layer.
Hotels and airlines are entering the fray not to operate experiences, but to bundle them. Loyalty programs want to keep travelers inside their ecosystems, and in-destination activities create new touchpoints for engagement and redemption.
Why Now?
Three forces are colliding to make this moment inevitable:
- Tech enablement: API-driven connectivity, mobile adoption, and digital payments make fragmented local suppliers accessible at scale.
- Consumer mindset shift: Post-pandemic, travelers are buying meaning and memory, not just flights and beds. Gen Z and Millennials lead with experience over status.
- Growth fatigue: With air and hotel revenue growth tapering, major players need a fresh top-line lever that feels both brand-relevant and margin-accretive.
Add the capital markets’ renewed interest (with Klook’s IPO is the latest validation) and it’s clear that investors see experiences as travel’s next global growth engine.
Strategic Stakes
Owning the customer and the supplier relationship is the holy grail. Platforms that merely aggregate inventory risk commoditization. Those that integrate upstream (curating, insuring, vetting suppliers) while controlling downstream (marketing, data, loyalty) will capture real value.
Expect to see:
- Consolidation: Smaller local operators aligning with or being acquired by global platforms.
- Vertical specialization: Deep niches (adventure, culinary, wellness) scaling faster than broad marketplaces.
- Bundling: Hotel + experience packages at booking or through loyalty redemption.
- AI-driven discovery: Personalized itineraries replacing search-and-scroll interfaces.
The winners won’t necessarily be the biggest brands, but the ones who can orchestrate local supply with digital fluency.
What to Watch
- M&A Heat: Expect OTAs to acquire regional or niche experience aggregators within 12 months.
- Loyalty Integration: Marriott, Hilton, and Delta are already experimenting with experience redemptions.
- Quality Wars: As supply scales, authenticity and service standards will separate real brands from marketplaces filled with noise.
- AI Curation: Next-gen itineraries where “book an experience” becomes “the platform books it for you.”
Risks and Realities
The promise is big… but so are the operational headaches. Local fulfillment means staffing, insurance, weather risk, and service variability. Margins can vanish quickly when refunds or cancellations spike.
Regulation is another wild card: many markets still lack consistent rules for licensing or liability in tours and activities. If the space grows too fast, expect consumer-protection scrutiny to follow.
Yet even with these headwinds, the experience segment offers something the rest of the industry has mostly commoditized: emotional differentiation. When a customer remembers a sunset sail or food tour more than their flight or hotel, that’s where brand loyalty lives.
The Next Frontier
Travel is no longer just about the transaction. It’s about the transformation. As legacy players search for growth and new entrants chase scale, the battle for the traveler’s moments – not just their miles – has begun.
The next five years will determine whether “experiences” become another major pillar of travel commerce, alongside air, lodging, and ground. For now, one thing is clear: this land grab is just getting started.
