Last year, Booking Holdings' (NASDAQ:BKNG) fast-growing competitor Airbnb launched Experiences -- a way for travelers to find and reserve an activity where they are vacationing. Booking Holdings has been talking about doing something similar for some time, but now the wait is over. A deal has been struck to purchase experience and activity reservation provider FareHarbor.

Booking more online

FareHarbor is a reservation platform for tour guides, rental businesses, event and attraction managers, and other local-activity businesses. While online travel sites like Airbnb and TripAdvisor (NASDAQ:TRIP) allow local businesses to list their activities and enable booking for travelers, FareHarbor goes a step further and acts as a key partner for the local business itself.

FareHarbor's software enables booking directly on a company's website, integrating with calendars and other management tools on the back end. FareHarbor also offers website construction and management, a predictive pricing service powered by artificial intelligence to help optimize pricing for an activity, payment processing, and integration with other third-party travel sites (read Booking Holdings competitors).

The purchase price for FareHarbor wasn't disclosed, but the small company will continue to operate independently and report directly to Booking Holdings subsidiary Booking.com.

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Image source: Getty Images.

Behind the curve, but not for long

Airbnb, TripAdvisor, and other travel sites have entered the online-booking experiences industry because of its huge potential. Vacations at resorts and poolside hangouts aren't in as high demand as they once were as younger generations are interested in adventures, sightseeing, and other events local to where they are visiting.

Travel experiences only account for about 9% of total global travel revenues, according to research group Phocuswright, but it's the fastest-growing segment of the industry. However, much of the experiences industry is still offline. In 2015, only 11% of tour and attraction bookings were made on the internet. That figure is expected to increase to about 20% by 2020.

With the exception of restaurant reservation site OpenTable, Booking Holdings' various travel sites do little to capitalize on vacationers' in-destination activities. Management said during the last earnings call that it was testing services in a few markets, but that it was ready to do more. As it has done before, the company is getting started late but is making a key acquisition of a fast-growing segment leader to play catch-up.

In the meantime, competitors have established themselves in the up-and-coming marketplace. TripAdvisor boasts being the online leader in activity booking, and Airbnb's service is apparently finding early success, too. While it will no doubt leverage FareHarbor to get listings on its own sites, what's really interesting about Booking's acquisition is that FareHarbor's software partners and integrates with Booking's competition. Thus, if early movers like TripAdvisor have success growing their activity and experience businesses, it could mean success for Booking Holdings, too. FareHarbor and Booking, though, would own the relationship with the local company.

Booking's management said it wants to build a central hub that manages every leg of a vacation. Plane tickets, rental cars, overnight accommodations, and restaurant reservations were all under Booking's umbrella, and now so are activities and experiences. That will certainly help Booking maintain its online travel industry lead and provides a potentially lucrative new project to nurture.

Nicholas Rossolillo and his clients own shares of Booking Holdings. The Motley Fool owns shares of and recommends Booking Holdings and TripAdvisor. The Motley Fool has a disclosure policy.