THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 1

The Evolving Role of

Experiences in Travel

September 2024
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 2

Table of Contents
The evolving role of experiences in travel 4

1. Desire for experiences is reshaping travel demand 6

2. Travel experiences could compose a market worth more than $1 trillion 9

3. Traveler demand for experiences falls into five consumer segments 11

4. There’s an emerging recipe for creating magical experiences 15

5. Finding and booking experiences remains a frustrating process—offering opportunities for improvement 18

6. Which strategies might help stakeholders find success in the experience marketplace? 25

About Skift About McKinsey & Company

Skift is the largest industry intelligence platform providing media, McKinsey is a global management consulting firm committed
insights, and marketing to key sectors of travel. Skift deciphers to helping organizations accelerate sustainable and inclusive
and defines trends for global CEOs and CMOs across the travel growth. We work with clients across the private, public, and
industry through a combination of news, research, conferences, social sectors to solve complex problems and create positive
and marketing services. change for all their stakeholders. We combine bold strategies
and transformative technologies to help organizations innovate
more sustainably, achieve lasting gains in performance, and
build workforces that will thrive for this generation and the next.

The work is independent, reflects the views of the authors, and has not been commissioned by any business, government, or other institution.
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 3

Acknowledgments

The report draws on joint research carried out between McKinsey & Company and Skift
Research, including executive, futurist, and tour operator interviews.

The authors wish to thank the following travel executives and futurists who generously shared
their perspectives with us:

Jenn Scheurich (Managing Vice President and Head of Travel, Lounge & Retail Experience,
Capital One), Chris Ohlund (Group CEO, Time Out), Alex Rieck (Chief Communications Officer,
Time Out), Emil Martinsek (Chief Marketing Officer, Get Your Guide), Will Gluckin (Head of
Global Communication, Get Your Guide), Luuc Elzinga (Founder & President, Tiqets), Nishank
Gopalkrishnan (CCO, TUI), Paul Bulencea (Co-Founder, College of Extraordinary Experiences),
Stephanie Glanzer, (Senior Vice President & Chief Sales Officer, MGM Resorts International),
Peggy Roe, (Executive Vice President and Chief Customer Officer, Marriott International),
Laurel Greatrix (Head of Communications, Viator)

The authors wish to also thank the following tour operators who generously shared their
perspectives with us:

Forbidden Vancouver, Hollywood Hikes, Brussels Walk Taste Enjoy, MTL Detours, See the
Sights, Voir Quebec, Guidatour, Bath Walking Tour, Random Wind Charters, Witch Walking
Tours, Hit the Road Tours, Big County Tours, Kiny Kiny Tours, Reykjavik Walking Tour, Taste of
Prague Food Tours, Guias & Tours, Tour for Muggles, Island Style Tours, Wasabi Tours

We wish to thank the report’s wider team: McKinsey’s Nick Meronyk, Lily Miller, Nadya Sne-
zhkova, Cedric Tsai, Sharon Yao and Skift’s Varsha Arora – who have played an instrumental
role in creating this report.

We would also like to thank Skift’s Taylor Slattery, and McKinsey’s Maggie Coffey and Seth
Stevenson for their creative, editorial, external relations and communications support.
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 4

The evolving role of experiences in travel

Since the dawn of leisure travel, people have journeyed in search crack the code on an approach that can simultaneously please
of new experiences. They long to meet friendly locals, eat new travelers, make sense for experience providers, and produce
foods, stroll through unfamiliar landscapes, and witness (or profit at scale for distributors and larger stakeholders. Today’s
maybe even join) cultural traditions that remind them that they’ve travelers often find the breadth of available experiences over-
left home. whelming, and they crave easy-to-navigate platforms that can
sort through experiences and offer seamless, real-time booking
Demand for compelling travel experiences like these has only anywhere in the world.
intensified in recent years. The internet helps surface immersive
activities catering to the varied enthusiasms of travelers from Experience providers (often small, passionate outfits, sometimes
across the globe. Social media creates a flywheel effect, in which run by a single tour guide) want to create broad awareness of
seeing friends’ posts about experiences encourages people to their offerings. But operators can become frustrated when a
seek experiences of their own—and then share them in turn, booking platform’s thumbnail descriptions fail to capture the
perhaps inspiring others to continue the cycle. More and more, appeal of a quirky activity—or when an intermediating player fum-
experiences have become powerful decision drivers for travelers: bles customer relations. Distribution platforms want to become
the possibility of a life-changing travel moment motivates peo- comprehensive sites for one-stop experience shopping but face
ple to book a trip. The quest for the right type of moment even challenges as they try to scale profitably while cobbling together
influences which destinations people will choose. a fragmented array of experiential offerings. Meanwhile, legacy
travel institutions, such as airlines and hotel chains, are still
But despite the enduring excitement about experiences and the searching for ideal ways to fit magical travel moments into the
large pool of value they represent, the travel industry has yet to machinery of complex corporate enterprises.
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 5

The global marketplace for travel experiences offers a more

than $1 trillion opportunity. Younger generations, in particular,
demonstrate an eagerness to splurge on experiences, suggesting
the sector will continue to expand. Yet nearly half of the business
of experiences is still transacted offline. As experience booking
goes digital, there will be considerable share to be claimed for
organizations that can anticipate and eliminate pain points at
every stage of the process, up and down the value chain.

How can operators quench travelers’ thirst for magical experi-

ences while finding new customer streams from around the world?
How can distribution platforms simplify and scale the discovery
and booking process while creating an attractive proposition for
operators? How can airlines and hotels learn from the awe and
wonder that a terrific tour guide can conjure, becoming distribu-
tors for experiences and also injecting the essence of that magic
into their core businesses?

This report, produced by McKinsey and Skift, examines the

world of travel experiences1—ranging from stadium rock con-
certs to guided nature hikes to in-home culinary gatherings and
everything in between. The report offers an assessment of the
experience industry as it stands today, presents ideas that could
help address current dissatisfactions, and looks at opportunities
for various players to capitalize on growing interest.

1 In this research, we defined “travel experiences” as activities, attractions, and tours,

excluding multiday tours, available to visitors at a destination.
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1 Desire for experiences is reshaping travel

demand
Once upon a time, travelers might have picked a destination trailed only essential needs, such as safety, navigability, cost,
first and only later started choosing what to do upon arrival. and accommodation range and quality (Exhibit 1). Respondents
But today’s travelers don’t treat experiences as afterthoughts. were nearly as likely to cite, as a decision factor, the ability to
Their travel decisions are increasingly based on specific activity experience authentic local customs and culture.
interests. This can invert the trip-planning funnel, placing experi-
ences at the top and destination choices further down the cone. Why are experiences so prominent in travelers’ thoughts during
the trip-planning stage? One potential explanation is the wide-
A recent McKinsey survey asked about the factors most important spread, general preference for spending on experiences instead
to travelers when selecting a destination.2 Survey respondents of things. A 2023 report on tourism trends found that consumers’
cited the range and quality of local activities on offer at a rate that spending on experiences was up 65 percent from 2019, while
spending on physical products rose only 12 percent over the same

2 “The way we travel now”, McKinsey, May 29, 2024.

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Exhibit 1

time frame.3 This divide may have been heightened in recent Online exposure to others’ travel experiences can serve as pow-
years by the dynamics of the COVID-19 pandemic, during which erful marketing. People’s travel experiences are increasingly cap-
shutdowns affecting travel, restaurant dining, and ticketed events tured on social media in ways that allow widening circles of users
reminded consumers of the important role that experiences can to view and share them. In some cases, the promise of creating an
play in a well-rounded life. appealing, shareable social media post is precisely what compels
a traveler to engage in an experience. In parts of the world where
“super apps” combine functions, going from watching someone
3 “Travel industry trends 2023”, Mastercard Economics Institute, May 11, 2023. else’s experience on social media to booking an experience of
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 8

your own is just a click away. In a 2024 survey conducted by

McKinsey and Skift, 83 percent of Chinese respondents said
they were “somewhat comfortable” or “very comfortable” with
booking paid experiences on social media platforms.4

In response to intense traveler demand for experiences, supply

has boomed. For example, our analysis of the number of expe-
riences offered at selected landmarks by the online-booking
platform Viator indicates a surge between 2019 and 2024. The
amount offered increased to 765, from 244 (214 percent) at the
Eiffel Tower in Paris; to 497, from 222 (124 percent) at the Sagrada
Família in Barcelona; and to 1,071, from 666 (61 percent) at the
Colosseum in Rome. This proliferation of available experiences
can become overwhelming in some cases, but it also allows for
narrow targeting.

A plentiful array of activities means that many niche enthusiasms

and preferences can be catered to, enabling travelers to dive
deeper into areas of passionate interest and personal identity.
Las Vegas, which is a top destination for both domestic and
international travelers, illustrates the value of presenting visitors
with a smorgasbord of wide-ranging activity types: the city has
evolved beyond its reputation as a gambling and nightlife mecca.
It’s now host to a plethora of offerings, including museums, pro-
fessional sports, helicopter tours, luxury car rentals, world-class
restaurants, and events at the distinctive Sphere arena. “If you
are coming to Las Vegas, you’re frequently going to do it around
an event or an experience that means something to you,” says
Stephanie Glanzer, chief sales officer and senior vice president
for MGM Resorts International, “and then you’re going to add
other experiences into that itinerary.”

Interest in experiences is unlikely to dissipate soon, as evidenced

by the preferences of younger travelers. According to McKinsey
survey data, 52 percent of Gen Zers say they splurge on
experiences, compared with only 29 percent of baby boomers.5
And Gen Z travelers say they try to save money on flights,
local transportation, shopping, and food before trimming their
spending on experiences. The travel experience market is large
and, by some estimates, rapidly growing. To size it, we began by
examining the value represented by the entirety of the world’s
tours, attractions, and activities. Our analysis indicates that this
global market could be more worth than $3 trillion in 2025.

4 From June 13 to June 20, 2024, the McKinsey and Skift Online Travel Behavior Survey
was in the field and garnered responses from 1,366 participants in China.

5 “The way we travel now”, McKinsey, May 29, 2024.

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2 Travel experiences could compose a market

worth more than $1 trillion
Many local residents participate in the experiences offered at a (for example, a tourist strolling up to an art museum’s ticket
given destination. But per our research, destination visitors—both window and then perusing its galleries). The segment involving
domestic and international—account for roughly 30 percent of paid, structured activities represents a large part of the market
the experience market, spending about $1.1 trillion to $1.3 trillion that’s in play for experience providers (such as tour operators),
on experiences. This is how we defined the total addressable intermediaries (such as online-booking platforms), and stake-
market for travel experiences. holders from other parts of the travel industry (such as hotels
and airlines).
Next, we quantified the serviceable available market by assess-
ing the proportion of travel experiences that are in some way We estimate that paid, structured tourist activities account for
structured (for example, a professionally guided tour or a live roughly 25 percent of global experience spending, totaling about
ticketed event) versus those that are independently undertaken $250 billion to $310 billion per year (Exhibit 2). This number
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 10

Exhibit 2

Total spend row based on range from mid-point of each row, numbers may not sum due to rounding

comprises tourist spending on rock concerts, baseball games, to capture a dominant share of value. Live events, by contrast,
history walks, nature hikes, theme park visits, spa treatments, generally feature more third-party involvement from groups such
museum tours, and a host of other activities. as event production companies and distribution platforms, which
can lead to more complexity in the value chain. In our analysis,
Distribution of the travel experience value chain can vary depend- experiences that involve more frequent platform booking tend to
ing on the category of activity. Experiences that tend to involve have value chains that are more evenly distributed, with platforms
direct booking (such as theme parks and ski lift tickets) typically often securing more than 30 percent.
allow the owner (such as theme park operators and ski resorts)
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 11

3 Traveler demand for experiences falls into

five consumer segments
Our survey data reveal a few consistent trends that hold across From the survey responses, we’ve identified five consumer seg-
geographies (Exhibit 3). For instance, sightseeing and art expe- ments that align along these four spectrums of preference relat-
riences top the preference lists for travelers from all regions. ing to experiences: relaxed versus activity-packed schedules,
self- versus tour-organized activities, extensive versus minimal
Despite these unifying themes, however, travelers come in many research, and preplanned versus spontaneous booking (Exhibit
flavors. They’re propelled by diverse motivations and seek a 4). Travel industry players should keep these five preference
wide range of experiences. Some prefer to plan their itineraries profiles in mind when looking for ways to fulfill consumer desires:
in advance, down to the minute. Others like to wing it. Some
love the research and discovery process—others, not so much.
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Exhibit 3
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Exhibit 4

Different consumer segments seek different travel experiences

Five consumer segments can be identified based on a spectrum of preferences relating to travel experiences. Understanding
these preference profiles could help travel organizations fulfill consumer needs.

Preference No preference, doesn’t engage in activities

Social Adventurers (25%)

“
Relaxed ​Activity-Packed
​ÞrganiÛed ß Ôroup
I have places to go, people to meet, ​§ndividual Tours Tours
and things to see. Carefully
​´ittle Research Researched
Love activity-packed trips and meticulously research ahead. Prefer
organized, pre-booked tours inspired by social media and are willing ​Spontaneous Pre-Planned
to pay for high-quality guided experiences. Booking Booking

Independent Explorers (24%)

“
Relaxed ​Activity-Packed
​ÞrganiÛed ß Ôroup
I want to get to know the destination ​§ndividual Tours Tours
my way. Carefully
​´ittle Research Researched
Enjoy moderately active trips and self-organize their experiences.
Prefer individual tours, use local agents, and seek well-reviewed ​Spontaneous Pre-Planned
activities inspired by search engines and review sites. Booking Booking

Relaxed Researchers (22%)

“
Relaxed ​Activity-Packed
​ÞrganiÛed ß Ôroup
I want to live like a local. ​§ndividual Tours Tours
​´ittle Research Carefully
Favor relaxed trips with few activities. Prefer self-organized, Researched
spontaneous experiences after careful pre-trip research, ​Spontaneous Pre-Planned
mainly inspired by travel shows. Opt for free over paid activities. Booking Booking

Guided Tourists (10%)

“
Relaxed ​Activity-Packed
All I want is to show up and have ​§ndividual Tours ​ÞrganiÛed ß Ôroup
Tours
everything ready to go. Carefully
​´ittle Research Researched
Prefer moderately active trips with organized group tours. Minimal
pre-trip research but like pre-booked activities, using international ​Spontaneous Pre-Planned
agents and opting for paid tours. Booking Booking

Serenit| Seekers (1‚%)

“
Relaxed ​Activity-Packed
Vacation should be a break from the ​§ndividual Tours ​ÞrganiÛed ß Ôroup
Tours
go, go, go. Carefully
​´ittle Research Researched
Prefer relaxed trips with minimal activities. Do not research or pay for
tours, focusing solely on relaxation. ​Spontaneous Pre-Planned
Booking Booking

Source: McKinsey behavior segmentation analysis, July 2024

THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 14

• Social adventurers. These travelers favor activity-packed

trips. They like to fill their days with organized tours. They
carefully research options ahead of time and tend to book
all activities before arriving at the destination. Their main
sources of inspiration are social media, influencers, and
travel blogs. They’re willing to pay extra for a high-quality
guided tour. When booking, they’ll use both international
travel agents and agents who are local to the destination.

• Independent explorers. These travelers enjoy moderately

active trips. They like to organize their own experiences
instead of joining tours. To the extent that they do join tours,
they favor private tours over group settings. They engage
in a mix of pretrip research and in-destination discovery
and prefer to use agents who are local to the destination.
They’re open to both free and paid experiences. They love
well-reviewed, off-the-beaten-path experiences, and their
main sources of inspiration are search engines and travel
review websites.

• Relaxed researchers. These travelers prefer a relaxed

schedule with relatively few activities. They like authentic
experiences and exhibit little interest in taking group tours.
They spend time educating themselves through pretrip
research about a destination, but they prefer to use local
agents and book spontaneously after they arrive. This group
favors free activities over paid ones. Travel shows are a
primary source of inspiration.

• Guided tourists. These travelers enjoy meeting others on

group tours. They don’t do thorough pretrip research and
prefer to have a moderately packed schedule that an agent
books for them ahead of arrival. They tend to use interna-
tional booking agents and prefer paid activities. They could
be receptive to bundled packages that build itineraries effi-
ciently and hit all the must-see spots at a destination.

• Serenity seekers. These travelers prefer relaxed trips and

engage in few activities. They don’t research or pay for
tours. They’re on holiday to chill. While they’re not looking to
pack their schedules, they could be open to some experien-
tial components of travel that industry players—especially
hotels—could help them tap into.
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 15

4 There’s an emerging recipe for creating

magical experiences
A top-notch experience can be the cornerstone of a trip, linger- Our survey results show that US travelers are most likely to cite
ing forever in a traveler’s memory. In our conversations with 19 entertainment when asked which aspect of a recent experience
experience providers, several crucial components for creating they enjoyed most. Perhaps accordingly, 40 percent of the expe-
great experiences became apparent. Booking platforms might rience operators we interviewed say they have backgrounds in
consider these components when deciding which experiences theater. Even more say they look for tour guide candidates with
to give prominent visibility. Larger travel players, such as hotel performing arts training. “It’s an entertaining and interactive
chains and airlines, might also keep these ingredients in mind— experience every time we go on a tour,” says Jay Geng, a founder
both when thinking about add-on experiences to offer through of Wasabi Tours Hawaii, which offers guided experiences. “One
their own platforms and when exploring how to scale magical of our tour guides even changes hats at every stop.”
experiences across a chain of hotel lobbies or a schedule of
transoceanic flights.
Well-trained guides set the tone

Entertainment comes first Because creating a magical, guided experience depends so much
on the guide, experience operators focus on molding high-quality
Experience operators observe that, no matter the type of expe- frontline employees. Nearly all operators agree that magic must
rience, what travelers want above all is to have a good time and be apprenticed. Many tour operators say they strive to offer
be entertained. “I create scripts that entertain people,” says Will exceptional training and mentorship for their employees. “We
Woods, the founder of Forbidden Vancouver Walking Tours. “Our invest in our tour guides through coaching, training, and oppor-
guides are trained to captivate an audience. People need to be tunities to shadow an experienced guide,” says Orlando Berne,
entertained, and then they’ll be open to learning.” a founder of Australia’s Hit the Road Tours.
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 16

Authenticity and local engagement matter

Visitors appreciate thoughtfully crafted itineraries that bring a

specific locale to life. Forbidden Vancouver Walking Tours, for
example, takes guests through a “lost” history of the Canadian
city, focusing on topics such as Indigenous people and women’s
history. Providing distinctive information and perspectives can
help create a sense of exclusivity, giving travelers the feeling
that they’re learning something few others know.

A high proportion of experiences are provided by mom-and-pop

operators, which can help contribute to a perception of locally
grounded authenticity. The founders of these businesses are
generally passionate about what they do. They make sure that
employees operate with the same mindset. “If a candidate tells
me that they are interested in doing this job only because they
need a side hustle to make extra money, the interview is over then
and there,” says Serdar Hizal, a founder of Soda Entertainment,
which offers a walking and tasting tour in Brussels.

Expectations should be managed—and then

exceeded

Overcommunicating and overdelivering are crucial. Disappointing

experiences can make travelers apoplectic: wasting one’s time,
which can never be recovered, is often more frustrating than
dealing with a faulty physical product, which can frequently
be returned. “Our only negative reviews come when someone
didn’t know what to expect from our tour and misunderstood the
nature of it,” says Will Woods of Forbidden Vancouver Walking
Tours. “So we go to great lengths to make everything clear in our
descriptions, photographs, and any other touchpoints that we
have with prospective guests.”

It’s important that guests perceive value in a tour. “We like to

keep our prices steady, and we are always looking to offer more
value to our clients,” says Jay Geng of Wasabi Tours Hawaii.
Many high-rated tour operators cap the number of participants
on any given tour to preserve the opportunity for connection and
bonding among participants and with the tour guide—even if it
prevents them from maximizing the number of customers served.

When it comes to culinary experiences, customers’ perception

of value is sometimes closely linked to abundance. “We looked
at other food tours globally,” says Dan Petursson, founder of the
Reykjavík Food Walk, “and the biggest driver of dissatisfaction
was that people thought they would be full after a food tour, but
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 17

they were leaving hungry. As a result, we make sure our tour

includes not just great food but a lot of food.”

Guests need to feel they’re in sure, safe hands

Travelers like to feel that a tour guide is in control every step of

the way. Adventure experiences—which can range from an easy-
going hike to more strenuous activities—thrive when seasoned
guides provide access to a location that would be challenging
for tourists to access alone. “I never wanted anyone else to go
through the misery of searching through a hundred ways to hike
up to the Hollywood sign,” says Joe Thompson, founder of Cal-
ifornia’s Hollywood Hikes. “Being able to lead people there and
help them get their dream photos at the golden hour is magic.
Then the place does the work for you.”

An assurance of safety is critical, particularly when operators

are striving to be inclusive of groups such as children and the
elderly. In some destinations, preparing guests in advance of a
tour can help prevent mishaps. For instance, favela tours in Rio de
Janeiro often provide detailed briefings to tourists about cultural
norms and safety practices, ensuring informed and respectful
interaction with the community.

Accommodating travelers makes them feel

special

Tour operators say they try to go the extra mile to accommodate

guests. For example, Diane Morano, owner of Random Wind Char-
ters—which offers sailing tours departing from the Caribbean
island of Sint Maarten—says she once received a request from
a couple who held tickets on a sold-out tour. The couple asked
whether their elderly parents could also join, even though there
were no spots left on the boat. The tour operator called all the
other guests and asked each if they would be willing to go on a
different day, even offering to reduce the ticket cost. Ultimately,
she was able to accommodate the family and help them create
a lasting memory.
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5 Finding and booking experiences remains a

frustrating process—offering opportunities
for improvement
Many travelers enjoy the process of planning a vacation. They Many experience providers have faced difficulties as they shift
have fun searching for the individual elements that will add up their booking operations toward online distribution platforms.
to a perfect trip. But the discovery-and-booking process for And for the platforms, scaling while maintaining or expanding
travel experiences can be alternately thorny and exhausting. margins has been a challenge.
It can present travelers with an overwhelming menu of options
but doesn’t always surface the best ones. It sometimes fails to
accurately describe an activity, which can create expectation Travelers aren’t always getting what they want
mismatches. or need from online booking

Meanwhile, the experience industry’s move to digital is still in Booking platforms that offer experiences sometimes serve up a
progress. According to 2023 data, 47 percent of experience large database presented as a list, which might not have been
booking still happens offline—either via walk-ups or telephone carefully curated. These lists can be overwhelming for a customer
calls or through offline conduits, such as hotel concierges and who isn’t sure what to look for. And they might fail to surface
traditional travel agents. Only 22 percent of booking occurs
6
hidden gems. What’s more, the tours and activities that appear
through online intermediaries, such as booking platforms. on platforms aren’t always especially well vetted. They might
not meet travelers’ expectations for quality or value—or might
6 Euromonitor, accessed July 2024.
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 19

not align with the thumbnail descriptions travelers see on the part, because platforms can afford to pay more for local language
platforms. translation, search engine optimization, and search keyword
marketing than a typical experience operator could.
Once an experience is booked, travelers can still face frustrations.
With booking platforms serving as intermediaries, customer Nearly 80 percent of the experience operators we spoke with
service interactions between travelers and experience provid- simultaneously list their offerings on five or more booking plat-
ers can be tricky to execute. What if a traveler wants to cancel a forms. From the operator’s perspective, listing on multiple plat-
kayak outing when it starts raining an hour before the scheduled forms has negligible downside, since it adds little difficulty or
start time? What if a traveler shows up late for a walking tour and complexity compared with listing on a single platform. Most
can’t find the group, which has strolled several blocks away? operators that list on multiple platforms say their bookings are
Communication and service in situations similar to these can be still concentrated on just one or two. When asked what distin-
confusing if it’s not clear whether the booking platform or the guishes one platform from another, operators most frequently
operator is responsible for handling a problem. cite a platform’s ability to integrate with the operator’s scheduling
and payment software.
There’s an opportunity to create a discovery-and-booking pro-
cess that features more fun and fewer hiccups. Travelers could Despite all the advantages that online platforming can offer oper-
benefit from simplified and more enjoyable discovery systems ators, it also presents some structural challenges. For instance,
(including ones linked with social media), a streamlined booking the variety of experience offerings—ranging from strenuous
process in which platforms become seamless (or even invisible), outdoor adventures to quiet cooking classes and from giant
and a detangled customer service approach (in which it’s always group tours to intimate gatherings—is difficult to fit into the
clear who to contact, even on short notice). one-size-fits-all listing approach that platforms sometimes take.
Unlike, for example, air travel, where the ticket offerings tend
to be fundamentally similar and easily compared, distinctively
Experience operators can benefit from the crafted activities and tours can often benefit from more bespoke
transition to digital—but also encounter framing of offers.
challenges
The intermediary role of the booking platform can also create
In 2023, 53 percent of experience booking happened online.7 frustration for experience providers. When service issues arise
This trailed far behind the online share of booking for airlines (77 or customers wish to cancel or reschedule a booking, execution
percent), hotels (61 percent), and short-term rentals (89 percent). isn’t always smooth. For instance, the customer might attempt
Going forward, many experience operators will likely continue to interact with the platform when it would be more effective to
to source significant business through offline channels—in par- interact directly with the operator. The operator might become
ticular, hotel concierges. Nonetheless, the sector (in large part aware too late of a service issue or booking-change request—or
because of its smaller digital base) is moving online at a faster might not become aware at all.
rate than any other part of the travel industry, and it’s likely that
upcoming generations of travelers will be eager to find and book Owning the customer relationship is a persistent challenge.
experiences digitally. Online-booking platforms could increasingly “Many customers still think that the booking platform is the
create a space where customers and operators come together. company running the tour, and this causes friction and misun-
derstanding with the customer,” says Sébastien Ivers, founder
Of the 19 operators we interviewed in June 2024, 78 percent of the sightseeing agency Tours Voir Québec. This situation can
already receive at least half of their bookings through platforms. be exacerbated when, as part of a business partnership among
Platforms can help attract online views and raise product aware- distribution platforms, listings supplied by one platform appear
ness in ways an experience provider couldn’t on its own. One on another. Customers think they’re booking on platform A, but
reason is that platforms tend to perform better in search engine for the operator, the booking appears to come from platform B.
results than an individual operator’s website does on its own—in This can create confusion for both the customer and the operator
when it’s not clear which platform is responsible for resolving a
given issue.
7 Euromonitor, accessed July 2024.
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 20

Our conversations with experience operators reveal three main

archetypes for their relationships with online-booking platforms:

• Majority direct. In the majority-direct category, most of the

operator’s bookings are received through direct channels, but
online platforms are used to fill specific gaps. These opera-
tors, representing about 11 percent of those we spoke with,
don’t want to cede the higher margins and more compre-
hensive control that come with a direct-booking approach.
They accept, on average, about 68 percent of bookings
directly. But they realize that online platforms can sometimes
offer benefits. For instance, platforms might offer better
access (including, in some cases, native language support)
to travelers from a specific region where the operator has
made few inroads with direct-booking efforts. Or though
the operators do the bulk of their business with large tour
groups that are coordinated offline (for instance, through
local partners, such as hotels), they might see that they
can use a booking platform to offer additional, incremental
slots for solo travelers. The use of a platform in these cases
is sometimes a last resort, after attempts to fill these gaps
through direct booking have failed. There’s a danger that, if
these isolated platform offerings aren’t properly integrated
into the operator’s direct-booking model, double bookings
or pricing discrepancies could occur.

• Even split. In the even-split category, the operator targets

a 50-50 split between direct and platform booking. The
goal of these operators, representing about half of those
we spoke with, is to find a balance that offers the best of
both worlds. These operators can take advantage of the
maximized margins and product control that direct booking
brings. But listing on booking platforms helps them scale in
ways they otherwise couldn’t. This approach tends to work
best for operators that have solid internal capabilities in
marketing and customer experience, paired with a capacity
to seamlessly integrate platform and direct bookings with
minimal variance in pricing, scheduling, and product.

• Majority platform. In the majority-platform category, the

operator primarily relies on platforms and willingly outsources
business functions to them. These operators, representing
about 39 percent of those we spoke with, hope to streamline
operations by accepting most their bookings (on average,
76 percent) through online platforms. In this relationship,
the platform provides much of the operator’s marketing,
analytical support, and transaction processing. Some oper-
ators can leverage this relationship to develop preferential
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 21

status with a booking platform, resulting in more prominent

placement from the platform’s recommendation algorithm
(an important advantage, given that 75 percent of customers
tend to look only at the first page of online search results).
For these operators, the booking platform’s commission is
viewed essentially as a way to outsource marketing expense
to a third party. This approach is especially appealing to small
operators that prefer to focus finite bandwidth on perfect-
ing offerings instead of marketing them. It’s also useful for
regional operators with limited fluency in English, as they
can rely on platforms to provide credibility, communication,
and ease of coordination with English-speaking travelers.

Online-booking platforms are hoping to scale a

fragmented industry

Online-booking platforms enjoy natural advantages when it

comes to selling experiences to travelers. Because the space is
so fragmented—full of countless smaller operators—travelers
look to save time and effort by turning to a platform that can
aggregate and sort through an overwhelming number of options.
Platforms can also lower payment and communication hurdles for
a traveler, particularly when experience operators speak foreign
languages or transact in foreign currencies.

Because of the significant value they provide to experience

providers, aggregators are able to extract healthy commissions
in return for placement in platform listings. According to our
interviews with 19 experience operators, commission rates for
platforms currently hover around 20 to 30 percent. This is far
higher than, for example, commissions for online platforms’ sales
of airline tickets, which sit closer to 2 to 3 percent. Commission
rates could eventually drop if the supply of experiences becomes
more consolidated, but these commissions are likely to remain
among the highest in the travel industry. One challenge for plat-
forms is that while these commissions can create large margins,
the average price of many experiences is fairly low: 3 percent of a
$700 airline ticket is $21; 20 percent of a $40 ticket for a walking
tour is $8. This forces platforms to sell at greater volumes.

Selling experiences at scale requires accumulating a large volume

of experiences to sell. But it it’s not always easy for platforms to
gather as much inventory as they would like. Building a robust
supply of high-quality inventory is a difficult task that can involve
marketing to individual experience operators or even enlisting
a sales force to contact and develop relationships with those
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 22

Exhibit 5

operators. Sales forces can be expensive, especially if they’re operators tend to be more interested in growing organically,
deployed to contact thousands of small operators (many of whom in line with demand. This widely held sentiment causes some
speak foreign languages) all around the world. Because many operators to see less value in listing on a big booking platform,
operators are tiny outfits, they also sometimes require additional and it’s one reason why the experience marketplace is likely to
training and hand-holding during the platform-onboarding pro- remain fragmented.
cess. Meanwhile, ramping up inventory quickly can come with
risks: some corners of the experience industry present greater To convince desirable but reluctant experience providers to list
potential hazards for guests, and some unvetted operators could on a platform, the platform might offer favorable terms, such as
be fraudulent. friendlier commission structures, more responsive client service,
and prominent visibility on its pages. Platforms that can most
Sourcing inventory through B2B deals is one approach for plat- efficiently offload aspects of smaller experience providers’ busi-
forms that are struggling to acquire supply. Some platforms that ness operations (such as processing of payments or calendar
have already built large collections of quality inventory are willing management of bookings—executed through software that’s
to share them for a fee. This is a fast way for a newer platform to easy for the experience provider to understand and use) could
expand supply, but this redistribution approach also means that become especially attractive. The more an experience operator
the secondary platform will have less differentiated inventory to comes to rely on a platform to handle these functions, the stickier
offer—sacrificing an important way to appeal to guests who’re the relationship is likely to be. “The one thing that our operators
comparing relatively similar online-booking sites. Reselling also all have in common,” says Laurel Greatrix, an executive at the
leaves the secondary platform with less control over the expe- online-booking platform Viator, “is that they’re not tech com-
riences themselves. panies. We are. We aim to make distribution easy by providing
the tools, tech, and support to help them offer their products
Another challenge in building inventory is that experience opera- far and wide.”
tors vary in their ambitions to scale. More than half the operators
we spoke with say they’re not looking to further enlarge their In some cases, platforms might be able to draw on their high-
businesses in volume (Exhibit 5). This hesitancy to scale often level view of the experiences landscape to collaborate with
relates to the potential loss of product consistency—particularly operators in creating new types of proprietary experiences that
for founders who have personal investment in the tours they fill underserviced gaps in the marketplace. “I think one of the big-
created and developed. They would rather stay small than lose gest challenges in terms of creating products is differentiation,”
the magic at the heart of their offerings. “We could probably says Nishank Gopalkrishnan, chief commercial officer for TUI
scale, but our base is currently stable, and by expanding, we risk Musement, a global tour-and-activity platform. “It is extremely
diminishing our quality,” says Lesley Thompson, founder of MTL difficult to create unique, exclusive experiences that cannot be
Detours, an outfit that offers walking tours in Montreal. These replicated by other partners.”
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 23

Travelers are looking for platforms that make sense of the array of Other players are seeking profitable ways to get
available experiences and can present options in a visually pleas- involved with experiences
ing, easy-to-navigate format that’s able to handle last-minute
bookings and cancellations. “Think of yourself when you travel,” Experiences are gaining enough traction in the travel ecosystem
says Nishank Gopalkrishnan of TUI Musement. “Yes, you want to that other players are now eyeing the market. The margins for
book some things in advance, but there are so many things that sales of experiences can be high: operators told us they typi-
you want to do depending on weather, depending on your mood, cally achieve up to 60 percent margins, even after deducting a
depending on how crazy things were the night before. There is booking platform’s commission (with labor constituting the bulk
an in-destination element that is huge.” of the operator’s cost). That can make this an appealing space
for businesses to enter.
A platform that knows its customers well and can present them
with the most thoughtfully curated offers is best positioned to Some airlines are emulating booking platforms by bundling air
win business. Collecting nuanced customer data, segmenting it, travel with experiences. Airlines are in a great position to handle
and then employing effective algorithms can help ensure that bookings that occur well in advance of a trip, since airline tickets
travelers will be shown the right personalized offers and bundles are often one of travelers’ first purchases during the trip-planning
at the right time. A cleverly bundled offer can simplify decision process. Through partnerships with accommodation providers,
making for the traveler while improving margins for the operator. an airline can, in some cases, offer a booking customer credits
“We don’t think of ourselves as creators of supply,” says Luuc toward hotel and resort activities, such as adventure outings, spa
Elzinga, founder and president of Tiqets, an online-booking treatments, dining, and shows. Or they can add on a “free gift,”
platform that specializes in connecting travelers with cultural such as an excursion, as part of a bundle. Airlines might also be
attractions, “but we know what people want, and we can bundle able to coordinate city tours departing from an airport during
it into packages. We combine things to offer interesting deals long layovers between a traveler’s flights.
that let travelers do more for less.”
Hotels ranging from budget chains to luxury resorts are develop-
Experience-booking platforms are competing for what they envi- ing both in-house and outsourced experiential offerings. Midprice
sion will be a very large and lucrative market. “I’ve seen it said that properties increasingly make sure guests have access to spa
there’s a $100 billion company to be built just in the experience treatments. At the world’s high-end hotels, the sky’s the limit, with
space,” says Will Gluckin, an executive with GetYourGuide, an on-demand fireworks, submarine rides, and champagne baths
online-booking platform. “And nobody’s done it yet. It shows that among the exceptional activities on offer. Four Seasons offers
this is not a side quest. This is a pursuit in a zone that deserves excursions that begin and end with transit on its own 48-person
companies’ full attention.” private jet, which features an onboard lounge where guests can
enjoy educational lectures, culinary demonstrations, and other
Many booking platforms have thus far focused on prioritizing top- presentations.
line growth instead of maximizing profitability. Building a large
platform can incur significant expenses related to both acquiring Some media outlets associated with travel expertise are able
a large supply of inventory and ensuring that the platform’s tools to offer branded tours and activities or create specially curated
and algorithms can handle it. A central question for platforms will booking platforms under their umbrellas. Entertainment com-
be how effectively they’ll be able to expand revenue while also panies can draw on their extensive reach and rich catalogs to
growing margins. offer immersive travel experiences that resonate with loyal audi-
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 24

ences. Experiences themed around beloved media properties

offer particular promise: events such as San Diego’s Comic-Con
demonstrate that fans of movies and TV shows will travel from
all over to become part of a shared experience built around a
culturally popular product.

Beyond branching out into creating or bundling experiences,

larger companies can also consider how to integrate great experi-
ences into their core products. Scaling the magic of, for example,
a brilliantly executed ten-guest food tour might be difficult for
hotels and airlines dealing with the millions of customers who flow
through their lobbies and passenger cabins. But it’s well worth
looking for ways to learn from—and then address—travelers’
evident demand for extraordinary experiences.

Some airlines are attempting to fill the flight itself with moments
worthy of social media posts from delighted travelers, drawing
on partner connections to provide in-flight elements such as
gourmet meals, luxury toiletries, and exclusive access to retail
not sold elsewhere. Themed flights—often offered at a pre-
mium—have been connected to pop culture properties, such as
Pokémon, The Simpsons, and Disney’s Moana. Thematic elements
can include the exterior paint, interior cabin decoration, meals,
safety videos, staff outfits, and exclusive apparel available for
sale. Hotels increasingly strive to turn accommodation into an
experience, as with the treehouse suites that overlook dramatic
natural scenery at the MORE Family Collection’s Lion Sands Game
Reserve lodge in South Africa.
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 25

6 Which strategies might help stakeholders

find success in the experience marketplace?
The evolving role of experiences in travel could create favorable post on social media about an experience (and the particular
circumstances for stakeholders across the value chain. Industry appeal of posting content generated from extreme, visually
players in various sectors should consider how best to capitalize arresting experiences)—can help operators understand what
on emerging opportunities. customers are looking for. Careful collection and analysis of
customer information and feedback can also help an oper-
ator strengthen experiences or identify unfulfilled traveler
Experience operators should generate the desires. Because so much of the quality of an experience
magic that will enable industry growth relies on having an excellent guide, it’s vital to scale the
magic by putting in place adequate mentorship and growth
For experience providers, it begins with delivering the distinc- opportunities for employees. Superb customer service can
tive, authentic moments that travelers crave. Once this crucial put the finishing touches on an experience that guests are
prerequisite is met, other success factors can be considered: eager to tell the whole world about.

• Meeting consumer demand. This requires monitoring • Savvy marketing. Using the right words and images can
changing trends, catering to evolving traveler tastes, and communicate an experience’s value proposition. The most
making guests feel they’re in safe hands from start to finish. effective messaging will generate excitement while also
Understanding traveler motivations—including the urge to creating clear, accurate expectations. It’s critical, especially
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 26

when a tour or activity is a bit quirky, to convey what the Booking platforms could profit from making
experience is and what it’s not. Identifying and highlighting sense of a large and growing market
the distinctive essence of an experience can help it stand
out in a cluttered marketplace. Singular images and short, Distributors might find themselves in a sweet spot, as demand
punchy copy can be of aid when attempting to catch the for travel experiences grows and the corresponding rise in supply
eye of a traveler browsing on a crowded booking platform. creates an ever-more-confusing marketplace. Platforms might
consider how to effectively gather, intelligently curate, artfully
• Discovery systems. For experiences, discovery systems display, and smoothly broker the sale of experiences in ways
are still in flux, so it’s important to find customers where that will appeal to overwhelmed travelers who want one-stop
they are—including on social media. Word-of-mouth recom- activity shopping:
mendations can be boosted by reminding satisfied guests
to tell their friends. Encouraging guests to leave positive • Building supply might involve building relationships with
online reviews can also help operators gain attention and operators. Experience providers want to list on platforms
credibility, and developing a robust social media presence that offer visibility and value. Best-in-class operators can be
can help spread awareness. The viral quality of social media attracted with inducements, such as prominent placement
platforms can make them powerful catalysts for marketing on a platform’s pages, and guarantees that their tours will
an offering to a broad swath of potential customers. be offered as add-on opportunities in bundles presented to
travelers. Commission rates can be variable, with lower rates
• Booking strategy. Different operators can benefit from appealing to newer operators looking for more cost-efficient
different booking strategies. It’s important for operators options. Operators are more likely to stick with a platform
to consider how their needs could evolve over time when if it provides useful ancillary tools, such as performance
evaluating the trade-offs that come with various booking dashboards. Loyalty programs or retention discounts for
approaches. Operators might weigh the commission fees longtime suppliers might help create deeper ties.
that are charged by booking platforms against the wider
distribution and easier execution that platforms can provide. • Curation can make a traveler’s discovery phase relatively
For some operators, it might make sense to focus time and easy and fun. Most travelers don’t have the time, ability, or
effort on creating experiences and managing employees desire to conduct a long, difficult search for a hard-to-find
while allowing a platform to handle the tech stack (including experience. They want a platform that has mastered mer-
payment processing and calendar scheduling). Operators chandising—surfacing the right products at the right time
that opt to focus on direct booking might take advantage for the right customer—and does it with visual and textual
of closer relationships with customers by creating pleasant panache. By taking cues from popular travel content that
booking environments in which travelers can easily find and appears on social media, platforms might look to curate
pay for what they need. and personalize in ways that will inspire travelers. Using
customer data compiled from past transactions and anal-
• Scaling. This has to be worthwhile. In many instances, oper- ysis powered by AI and machine learning, a platform might
ators can’t fully meet demand in their home cities. They might identify individual experiences that could fit a customer or
benefit more from capturing greater local market share than design bespoke vacation packages. Bundling experiences
from expanding into a secondary market, where the chal- together in an offer, by packaging activities from different
lenges of remote management might introduce complica- operators into a seamless and aligned itinerary, can simplify
tions. Any attempt to scale can involve early attention paid the process for the customer while increasing margins for
to succession planning and “key person risk.” Is it possible the platform. Encouraging post-trip reviews from customers
to replicate a wonderful tour guide in a bevy of new locales? can help a platform become a trusted source of information
If the magic goes away, so might the customers. for other travelers during the trip-planning stage.
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 27

• A seamless booking process is likely to draw customers in

and keep them coming back. Customers shouldn’t need to
wade through multiple pages and filtering tools to find what
they’re looking for. Providing a powerful, comprehensive
search tool on the front page of a platform can help travelers
quickly sort through options. Generative-AI-powered inter-
faces might let travelers more easily search for experiences
and bundles that suit their needs. Chatbots might be pro-
grammed with live intervention features that allow a human
advisor to hop into a conversation at any point and pick up
where the automated tool left off. Reducing the number of
click-through steps and information requests to create an
account and move through the payment process can lead
to fewer abandoned shopping carts.

• Platforms might advise—or even become—experience

providers. Booking platforms have a high-level vantage point
and an ability to access large amounts of data, so they are
in a good position to spot unmet demand in the marketplace
and help generate supply that’s likely to be appealing to
travelers. Platforms can see which types of experiences are
frequently backlogged with demand, and they can identify
destinations that have an abnormally low ratio of offered
experiences to visitor levels. Platforms can collaborate with
established experience operators to fill these types of gaps
by creating new or exclusive experiences. A platform might
draw on its expertise to invent its own branded experiences
using a “white label” approach. Earning and keeping travel-
ers’ trust—with assurances of quality and value—are crucial
components of any platform’s efforts.

As demand for experiences grows, travel

industry players could look for new ways to get
involved

Stakeholders across all travel sectors could benefit from viewing

their roles through the lens of serving up memorable, positive
experiences to travelers. This might involve reframing services
a company already provides, or it might mean looking for new
opportunities to integrate experiences into a traveler’s journey:

• Hotel stays. Hotels might use experiences as incentives

for travelers to book stays. Strong brand recognition and
existing digital infrastructure can help hotel chains act as
distribution channels for experiences. When experiences
are integrated into a hotel’s core offering and draw on the
hotel’s close relationships with local experience provid-
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 28

ers, they might enhance the hotel’s value proposition, allow

opportunities for upselling at the time of room booking, and
boost ancillary revenue. Experience bookings tend to deliver
high margins for hotels, even when the experience is led by
a third-party operator. A hotel’s in-person touchpoints with
guests offer ample opportunity to raise awareness of expe-
rience offerings, accurately convey expectations for specific
experiences, and execute last-minute bookings with few
pain points for the traveler. Exclusive experiences might be
offered to top-tier members of a hotel’s loyalty program. “We
have thousands of experiences—including once-in-a-lifetime
experiences—designed to reward loyal guests at different
levels,” says Peggy Roe, chief customer officer and executive
vice president for Marriott International. There might also be
an opportunity to improve on-premises experiences that a
hotel more closely controls—for instance, at the hotel’s spa
or through a pop-up event in the hotel’s lobby.

• Short-term rentals. Short-term-rental platforms might offer

experiences alongside accommodation bookings. Given that
many short-term-rental bookings already happen online, it
might make sense for short-term-rental platforms to claim a
share of experience booking. These platforms have estab-
lished online relationships with many customers, and they
have already integrated online payments and scheduling
into their operations. Some short-term-rental platforms’
marketing emphasizes the experiential aspects of travel (for
instance, encouraging travelers to stay in locally authentic
housing in off-the-beaten-path neighborhoods instead of
in a chain hotel in the tourist district), so offering paid expe-
riences at destinations can be a natural branding fit.

• Flight packages. Many airlines already generate significant

revenue from package holidays, which could be supple-
mented with add-on experiences. Airlines might take advan-
tage of customer data and contexts to surface attractive
experience options at the time of flight booking, which tends
to happen early in the trip-planning process. Inventory can be
sourced through B2B partnerships. While less-than-glowing
traveler perceptions about air travel experiences might force
airlines to grapple with branding issues as they enter the
experience-booking space, the rewards for a successful
effort might include increased ancillary revenue and oppor-
tunities to boost the value propositions of loyalty programs.

• Reframed core products. Travel stakeholders can view

their core products through the lens of experiences. Hotels
might consider how to turn lobbies into experiential oppor-
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 29

tunities. Airlines might examine what travelers want from • Prioritization. Becoming involved in the experience space
experiences and then apply the insights to create in-flight might help a destination shape its tourism priorities. A city-
presentations and improve cabin atmospheres. Spaces might pass offering, in which a purchased pass grants visitors free
be revamped in ways that make them social media worthy. or discounted admission to a variety of experiences, could
“An airport can be a place of anxiety,” says Jenn Scheurich, be used to curate visitor experiences, steering travelers
head of Capital One’s travel, lounge, and retail experience, toward favored activities—for instance, those that support
“and there’s a lot that feels totally out of your control. We underrepresented groups, spread out footfalls across space
feel like we can build a different type of airport experience or time to mitigate overcrowding, and otherwise align with
with Capital One Lounges that leans into being a haven—a DMO strategies or a destination’s branding. Coordinating
space that you would be excited to walk into if it was in your with experience operators might also help DMOs connect
own neighborhood.” prospective tourism industry workers with available jobs.

• Influence. Organizations with government ties might

Destinations could offer support for the influence resource and infrastructure choices. By helping
experience ecosystem conceive, design, and back new development proposals
specifically geared toward supporting visitor experiences,
Visitor bureaus and destination management organizations destinations can build value and generate enthusiasm. DMOs
(DMOs) have roles to play in helping meet traveler demand for might aid in securing anchor attractions or transport connec-
great experiences. The distinctive capabilities and resources of tions that might help newly developed areas thrive.
these groups could aid them in shaping the experience landscape:
Magical experiences are what leisure travel is all about. They
• Guidance. Destinations might offer guidance and training to bring people joy. They shape people’s identities. They can be
experience operators. Some less sophisticated experience the chapters of people’s lives that they’re most eager to tell the
operators might benefit from upskilling as they attempt to world about.
list with online-booking platforms. For instance, travelers
are generally more likely to book through platforms based The business of travel experiences is quickly growing and evolv-
in their home regions, but experience providers in desti- ing. Today’s marketplace could be at an inflection point, poised
nations may be less familiar with the major booking plat- to transform in ways that will better connect travelers, providers,
forms used in important source markets. DMOs might also platforms, and other players. The travel industry should look
attempt to secure reduced commission rates from platforms for opportunities to collaborate and innovate to improve the
by delivering a large group of local operators. Operators commercial elements of travel experiences while never losing
might receive service and business training coordinated by sight of the essential magic that turns a travel experience into a
DMOs through a combination of standardized modules and life-changing event.
location-specific sessions led by local experts. DMOs can
also help coordinate social media campaigns that highlight
under-the-radar experiences.
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 30

Authors
McKinsey Skift

Jules Seeley is a Senior Partner in McKinsey’s Bos- Seth Borko is a director and the head of Skift
ton Office. Jules is a leader in McKinsey’s Travel Research. He is responsible for overseeing the
and Hospitality practice and serves clients broadly 40+ reports produced by the research team each
across the sector including in airline, hotel, car, year. Key areas of research coverage include: hotels,
cruise, and travel technology. His work includes airlines, online travel, short-term rentals, travel
large-scale performance transformation across experiences, traveler behavior, and sustainability.
operations, commercial, digital/analytics, organiza-
tion, and strategy. He is passionate about travel and Pranavi Agarwal is a Senior Analyst at Skift
helping organizations to create the very best travel Research, based in London. With a background
experiences, tailored to their customers’ needs. as an equity research analyst, Pranavi specializes
in analyzing the financials of companies within the
Vik Krishnan is a Senior Partner in McKinsey’s hotel and online travel sectors. She has authored
San Francisco Office. Vik leads McKinsey’s Travel significant deep-dive reports, including analyses of
practice in North America. He advises compa- Hopper’s rise in the travel industry, an exploration
nies in the aviation, transportation, travel, and of the evolution and future of online travel, and a
aerospace sectors. three-part series on Google Hotels, leveraging
web-scraping techniques.
Ryan Mann is a Partner in McKinsey’s Chicago
Office and leads McKinsey’s Hospitality Practice Robin Gilbert-Jones is a Research Analyst based in
in North America. Ryan’s focus includes helping Cape Town. Robin’s work focuses on the intersec-
travel and hospitality organizations around the tion of travel and sustainability as well the evolving
world develop growth strategies, map opportunities, tourism experiences sector.
build new businesses, and scale existing operations.

Alex Gersovitz is an Associate Partner based in

McKinsey’s Los Angeles office. Alex advises con-
sumer-facing companies and investors across the
hospitality, gaming, entertainment, and consumer
industries on growth strategy and operational topics.

Alessandra Powell is a Senior Consultant in McK-

insey’s New York Office focused on international
travel, tourism, and consumer work. She serves
clients on topics related to international expansion,
economic development, technology, and invest-
ment across the US and international landscape.

Carol Flaksberg is a Senior Consultant in McK-

insey’s New York Office focused on international
travel, retail, and consumer work. She serves cli-
ents on topics related to business strategy, rev-
enue growth management, and digital customer
experience, internationally.
THE EVOLVING ROLE OF EXPERIENCES IN TRAVEL SKIFT + MCKINSEY & COMPANY 31

September 2024