The Booking Gap: Digital Connectivity & the Role of DMOs

by Patrick Rodgers

Director of Product, Tourism Exchange USA

June 10, 2024

In the travel industry, it seems like our entire lives are already online. Most of us wouldn’t bat an eye to book a flight halfway around the world via an airline app, browse and book a hotel room a few minutes later, and then search for things to do all from our phones while sitting in an airport waiting for an unrelated connecting flight. “Life moves pretty fast,” as Ferris Bueller said almost 40 years ago. The pace since then has only quickened.

Almost 70% of the global travel revenue is happening via online channels these days, according to Statista, and forecasts suggest that number continues to grow. Meanwhile, as much as 50% of tours around the world are not bookable online (that number is likely closer to 20-30% of tours/activities in the U.S. market). So, while the volume of online transactions is rapidly increasing, there continues to be a sizable portion of the industry that isn’t easily bookable.

That is a big hairy problem because all of those unbookable and hard-to-book businesses will be fighting for a shrinking slice of the pie, economically speaking. Increased competition and shrinking revenue mean we will lose a bunch of those businesses in the next few years, and the travel industry will suffer a corresponding loss of vibrancy because so often those small businesses are the ones that are the most memorable for travelers.

What avid traveler doesn’t have stories about the discovery of some off-the-beaten-path mom-and-pop business that resulted in an unforgettable meal or cultural experience? Research from American Express last year found that more than 80% of surveyed travelers want to go places they’ve never been and support local businesses while traveling. But our consumer booking behaviors suggest convenience and immediacy rule the day when we’re shopping online. That’s a disconnect.

We are reaching a point where a destination’s IRL offerings will only be as good as they are conveniently bookable online — and this is true for consumers and international travel trade segments alike. It’s probably already true, but we haven’t had a name to describe the issue. In that spirit, I would suggest we call it the “Booking Gap”.

We can understand the Booking Gap as the difference between what a destination has to offer in physical reality and what is available to discover and book online in a moment of inspiration. Being mindful of the gap is increasingly important because the time between inspiration and transaction is getting shorter, and opportunities to convert are fleeting. If you’re a destination that’s investing in promoting things that aren’t easily discoverable and bookable in the many places where travelers consider and purchase travel, then your marketing isn’t as effective as it could be.

The impact of the Booking Gap isn’t limited to under-connected businesses. There’s a tangible impact on the destination. If potential visitors are considering a visit, they’ll probably turn to search to find more information. But if they only find some of your local accommodations and activities, then they’re getting an incomplete picture of what’s really there. If prospective visitors don’t see what they were hoping to find, that’s the moment when a competing destination wins their business. Those visitor dollars go into another community’s tax coffers.

The Booking Gap isn’t just a destination perception problem. It’s the root of an economic issue as well.

When it comes to contracting tourism products at commissionable rates for international travel trade, the United States is too big, geographically speaking, for its own good. It’s basically impossible to contract with all of the interesting places to stay and things to do here. That gap results in wholesale opportunities being focused on the highest volume destinations (gateway markets), and with larger businesses who can manage committing to a 20-30% discount at fixed rates for multi-year deals to generate incremental growth. This is one reason smaller markets and smaller businesses struggle to win lucrative international visitation.

When a community offers a compelling product that isn’t easy for trade to book, it makes a destination less competitive globally and further limits the potential economic impact of international inbound travel in communities beyond the gateways. Ask any destination rep who’s had a tradeshow experience promoting beautiful marketing assets to a potential trade buyer only to be asked the oftentimes unanswerable question, “How do I book that?”

Travel agents and tour operators around the world can’t just go to an OTA and pass through the costs of retail tickets to their clients if they want to stay competitive. But they also have very limited access to commissionable products outside of gateways that would offer unique opportunities to extend or refresh popular itineraries. This, too, is part of the Booking Gap.

Giving a name to an issue is actually an essential step in beginning to address it. For example, in the late 2000s, as access to computers and high-speed internet migrated more of our civic, personal and professional lives online, the term “Digital Divide” was coined to highlight the growing chasm between those who had access to computers and broadband versus those who did not. The new term gave shape to the previously amorphous challenges caused by a population’s lack of access to information, job opportunities, services and so on.

While giving a name to an issue might help to bring attention to the problem, it isn’t a solution on its own, unfortunately. The Digital Divide is still with us even though smartphones and high-speed mobile data have shifted the battle lines away from desktop computers and household connectivity. In some ways, the Booking Gap is a slice of the Digital Divide — it’s an issue of connectivity haves and have-nots. It’s an issue that impacts representation on the international stage.

This is a problem that technologies like Tourism Exchange USA can play a part in solving in the coming years. Working in partnership with Brand USA, Tourism Exchange USA’s goal is to increase the availability, diversity and reach of U.S.-based travel products globally by expanding access to online booking and distribution tools. If the platform can increase connectivity between businesses and consumers, and between communities and international trade, it will help improve the equity of the travel industry’s economic impact. The Exchange won’t solve the Booking Gap itself, but it can make a difference right now for businesses and communities across the country. Regardless of how each destination proceeds with its own strategy, all should be committed to developing their own vibrant, inclusive and sustainable tourism communities by doing their part to close the Booking Gap.