Rezgo, the pioneer in cloud based software for tour and activity businesses and which recently crossed a million customers, is seeing 20% of its total bookings come from APAC operators.

Stephen Joyce

CEO Stephen Joyce, who told WIT that 22% of the tours offered in its system are based in the region, said that Asia is a growing market but payment systems remain the big hurdle.

“We have integrated PesoPay and YesPayments. We are looking into AsiaPay and SBC. There are lots of opportunities but access to internet and payments are two major factors.”

One trend that he is seeing that’s happening differently in Asia from North America, where Rezgo is based, is more reliance on the mobile web. However, “online payments are not quite there yet”.

The in-destination tours and activities segment, which is estimated to be worth more than cruise and more than double the car rental market, has always been the hardest to crack online.

Joyce calls it “the ugly duckling of the travel industry”.

“Because it is so fragmented and the businesses tend to be quite small, no one really pays much attention. Serving over one million customers worldwide proves that people will book with small business, if given the chance. It also shows that small businesses can be successful online if provided with the right tools and support.”

Yet Joyce believes the problem is not only a technological one, but also an educational one. “Small operators need to see the benefits of advanced bookings. Advanced bookings require payment and internet infrastructure. Cash is still king for most small businesses because the costs of merchant processing (accepting credit cards) is still quite high.”

“We need a Stripe for Asia,” he said, referring to the North American payment solution for developers.

The majority of businesses that use Rezgo are small businesses that offer daily tours, activities, or excursions. What is interesting about the one million customers booked through these small businesses is the data that can be analysed from all the transactions and how that data can be used to help small businesses improve.

For example:

• Lower priced tours and activities sell better online. 75% of customers booked tours that cost less than US$100.
• Tours that cost US$1,000 or more per person accounted for less than 1% of total customer bookings, suggesting that customers aren’t ready to book expensive tours from small businesses online.
• Almost half of all customers booked tours and activities in U.S. destinations.  Travellers to Africa account for less than 4% of bookings.
• Customers are shifting from desktop to mobile devices. Since 2009, there has been an 18% decline in desktop web bookings. Mobile web bookings have increased by the same percentage.
• Travellers who book “things to do” tend to be last minute.  More than half of all customers booked within seven days of their travel date.
• Businesses who accept credit card payments get more bookings.  Even though PayPal is the preferred payment method for most businesses, over 80% of customers paid for their bookings with a credit card.

Setting up Rezgo to serve the “ugly duckling” has not been easy, admitted Joyce.

“We were one of the first companies to offer a software as a service reservation platform that didn’t charge any set-up or subscription fees. Because the market is still quite young, we had to educate operators by producing a lot of content early on and advocating for the tours and activities segment with the travel industry at large. We had to focus on solving problems rather than building cool toys. Operators want real world problems solved, they don’t care about buzzwords or technical lingo.

“We have worked hard to build a strong and positive reputation in the market, and our customers share that with their partners and colleagues in the industry. That’s why the majority of our new customers are a result of word of mouth or searches in Google.”

One challenge Rezgo is facing is the introduction of competing services. “We are our own worst enemy at times.  By helping to show the value and opportunity in the tours and activities space, we have made it more attractive for new entrants. As a result we have seen many competing startups in the last couple of years”, said Joyce.

“In my opinion, many of these new services are riding on our coat tails, and benefiting from the work we did four to five years ago. We have to continually work hard to make sure that we stay focused on the long term goal of being the leader in the space.  New competitors are nothing more than short term distraction.

“Working with distribution channels is another challenge. Although there is a lot of interest in the space, it is still difficult to get the larger GDSes or OTAs to think about creating connectors for live availability. I believe one the biggest opportunities in tours and activities is in the mobile space, specifically around last minute bookings when in destination. This can only be accomplished with direct access to an operators live availability.”

“OTAs and aggregators that use freesale or on request can’t provide live availability because they don’t have direct access to supplier systems yet. We want to encourage them to create those connectors because it means more distribution for operators and more revenues for marketing partners. I believe the time is coming soon when we’ll see the OTAs recognising this opportunity and enabling live availability.”

• Stephen Joyce will be speaking at WIT Bootcamp, October 21, on solving the pain points in tours and activities.