What's Happening?
Online travel agencies (OTAs) have overtaken operator websites and offline direct bookings to become the largest distribution channel for tours, activities, and attractions in Australia and New Zealand. This shift, highlighted in Arival's second annual
State of Experiences report, marks a significant change in the sector. Digital intermediaries now control the largest share of bookings, affecting how operators approach margins, marketing, and long-term strategies. The report indicates that while 70% of operators reported profitability in 2025, fewer than half experienced booking growth, and 20% saw declines, suggesting an uneven demand environment. The sector's fragmented structure, with many operators serving fewer than 10,000 guests annually, adds complexity to distribution negotiations and technology investments. Technology adoption remains uneven, with operators using an average of five systems, many of which are not integrated. Automation and system integration are top priorities for 2026, and AI uptake is increasing, though only a third of operators report meaningful results.
Why It's Important?
The dominance of OTAs in the ANZ region's tours and activities sector represents a pivotal shift in how the industry operates. This change impacts operators' profit margins and marketing strategies, as they must now navigate a landscape where digital intermediaries hold significant power. The uneven demand environment, despite a digital boost, suggests that operators need to adapt quickly to maintain profitability. The fragmented nature of the sector, with a mix of small and large operators, complicates the adoption of new technologies and distribution strategies. As technology becomes increasingly important, operators must prioritize system integration and automation to remain competitive. The rise of AI, although still yielding limited results, indicates a trend towards more sophisticated technological solutions in the industry.
What's Next?
As the industry continues to evolve, operators will likely focus on integrating and automating their systems to improve efficiency and competitiveness. The ongoing digitization of experiences will be a key topic at industry events, such as Arival 360 Brisbane. Operators may also explore new partnerships with OTAs to leverage their distribution power while seeking ways to enhance direct booking channels. The uneven demand environment suggests that operators will need to be agile in their marketing and pricing strategies to capture growth opportunities. The increasing interest in AI could lead to more innovative solutions in customer engagement and operational efficiency, although widespread adoption and meaningful results may take time.
