ToursbyLocals (“TBL”) is a two-sided marketplace focused on connecting tourists with local, experienced tour guides across the world. Founded in 2008, ToursbyLocals was created by partners Paul and Dave, who were visiting the Great Wall of China and met a few local women who shared their vast knowledge in exchange for souvenirs. After returning to their home in Canada, Paul and Dave worked to build a platform that would enable tourists to seamlessly connect with local, authentic guides. Today, nearly 1.5 million people have taken a tour with one of TBL’s 4,100 experienced guides. TBL’s headquarters is based in Vancouver, BC and has offices in Argentina, Malaysia and Scotland.
What strategy does TBL deploy to create value?
TBL creates value for both its tour operators and tourists via its website, which serves as a matching and booking platform for tourists and tour guide operators. TBL’s platform provides the following services:
- TBL’s website enables tourists to search for private tours in 160 countries.
- TBL customers have access to a multitude of offerings, including customizable half-day, full-day, and multi-day private tour experiences (up to 6 people) that are created and led by insightful guides.
- TBL’s platform only features the very best tour guides around the world due to TBL’s careful selection and screening process. TBL’s team of recruiting specialists proactively search for deeply knowledgeable and reliable prospect guides in select areas. After encouraging these prospects to apply, TBL then assesses their language competency and conducts a background check. TBL also requires that tour guides accept the Company’s “Tour Guide Agreement” policy, which includes best practices for pricing, setting availability, itinerary organization, and more.
- Private messaging functionality allows for guides and tourists to communicate throughout the booking process.
- TBL’s rating and review system allows for tourists to read through uncensored comments by travelers who have taken the guide’s tours.
- Website processes safe and secure credit card payments via Paypal. TBL holds the payment in trust until the completion of the tour to ensure customer satisfaction.
- 24-7 Customer Service team helps process customer refunds, ensure tour quality and monitor prompt tour guide communication.
- TBL platform provides tour operators with a steady stream of new customers that highly value personalized, private tours. Due to the robust tour guide selection and screening process, the majority of customers report being “very satisfied” with their tours, so that tourists repeatedly use the TBL website when booking new tours across the globe.
- Website enables operators to accept or deny new bookings.
- Back-end system allows for operators to manage their schedule and existing bookings. TBL allows guides to multi-home (i.e. guides may work for tour guide agencies or advertise via OTAs).
- TBL allows guides to set their own availability and pricing. (Albeit TBL requires guides adhere to its “Tour Guide Agreement” policy as outlined above).
- Private messaging functionality enables tour operators to answer questions and provide itinerary details
- Customer Service team handles frequently asked questions around admin, logistics and payments so that tour guide operators can focus on itinerary design and exceptional tour delivery.
How does TBL capture value?
ToursbyLocals captures value, or monetizes its services, by charging customers a one-time booking fee and small payment processing fee. Note that TBL does not charge customers a subscription fee to access tour listings. TBL charges tour operators, or its suppliers, a monthly fee which covers all services associated with the TBL platform (demand generation, customer support, scheduling and booking functionality, messaging system, payment processing).
Scaling and Sustaining TBL
From 2008 – 2019, TBL largely grew its tourist base by word-of-mouth. TBL grew its supplier base by prioritizing investing in its tour guide recruitment specialists and customer support functionality. This allowed TBL to add high-quality tour guides in different geographies to the platform and ensure customer satisfaction via 24-7 customer support. In January 2020, TBL raised >$30M to invest more heavily in its sales and marketing team to proactively grow its tourist base. While COVID-related international travel restrictions had a huge impact on the business, TBL was able to use a portion of these funds to retain its high quality tour operator supply and even rolled out virtual tours during this period. Going forward, TBL should continue to prioritize tour guide quality and carefully select for tour operators that offer new itinerary ideas and experiences. TBL can also expand its language offerings and currency options in order to target a broader group of tourists (the majority of current tourists hail from the U.S., Canada, Australia and Europe).