Travel & Tourism November 25, 2021
Can anyone and everyone become a tour operator or run a tour company?
Prior to the Covid-19 Pandemic, the multi-day tours industry saw an influx and birth of new startup businesses and this was undoubtedly a great sign and indication that the tourism industry was contributing largely to job creation and changing livelihoods.
However, the million-dollar question that we are all yet to find answers for is; Can anyone and everyone become a tour operator or run a tour company? My honest answer is unfortunately a BIG no, and because of this, the majority of these startup travel and tour businesses die before they even see their second birthday.
Without citing lots of research and business models, it is absolutely evident that the tour operating business is among the most sophisticated businesses that require a certain level of industry knowledge to be successful unless exception.
In this write-up, I will try to cite a few important highlights that can help the still remaining young travel businesses and those struggling to keep in the business.
The tour operation business among other businesses requires you to know your location very well, have a deep connection with the local community, and love to deal with people above all else.
After all, your future guests will be looking for a memorable experience when booking with you.
So, my first advice would be, make sure that you have enough passion and love for it.
Before I highlight the tips on how to start a tour operator business, let’s first remind ourselves of the basic definition of a tour operator.
A Tour Operator is a person or company that thinks up ideas for holidays, researches the ideas, designs the holiday itinerary and content, contracts the services needed for the holiday, accommodation, transport, guides, tour leaders, or resort reps, etc and then market the resultant package.
Tours, activities, and attractions is the third largest sector within travel, right behind airlines and hotels, according to the 2019 report from Arrival.
There are more than 130 distinct categories of tour operators! Adventure tour operators, safari tour operators, sightseeing tour operators, food tour operators, and many more.
The travel activities market was expected to reach $183 billion in 2020. Of course, the pandemic had a direct impact on this forecast. Anyway, this sector has everything to continue growing as soon as confidence in travel rises again.
Talking about booking, most travelers find and plan activities through their computer, and more than 20% book it online, directly on the tour operator’s website. By the way, the average number of activities per trip is 7, that’s quite a lot, isn’t it?
That’s why when planning your website you should consider integrating an online booking solution. Otherwise, you will be losing an important source of income for your business.
Now that you are better informed about the tours and activities industry, let’s see what you need for starting a tour operator business.
It’s time to find out if you have what it takes. While starting a small tour company does not require any professional qualifications, the following skills are incredibly important for anyone who wants to open a new business.
- Ability to deal with uncertainty and unplanned
- Ability to handle pressure (which is connected to the first one)
- Awareness of emerging trends
It comes without saying that the entrepreneur needs extensive knowledge about visa regulations, immigration procedures, places of tourist interests, political situations, accommodation and transportation trends, festivals, history and culture, and all other aspects regarding the tour business.
Besides all the knowledge and soft skills previously mentioned, you need a lot of planning and strategy if you want to start a successful tour operator business.
Below we listed some key actions you need to take in order to get there.
Identify your market niche; Finding a promising niche is not an easy task. Answering these questions will help you clear your mind.
What do you want to show to your guests? What activities do you want to offer to keep them entertained? How can they experience something authentic on your destination that you can organize? and the most important that you must keep in mind is what would make a potential guest booking with your company?
Think about what you can offer that’s different or distinct from your future competitors; Without a clear idea of your target customer, you’ll struggle to cut through the competition.
Get to Know the Ideal Customer; Knowing your customer is crucial to be able to provide what they like. What’s their age range? Married or single? And so on.
There are tools on the internet that can help you create the persona of your ideal customers.
Talk to the industry leaders around you; Don’t think it’s a bad idea to ask for advice from someone who has been in your shoes, especially when they have come out successful on the other side.
Determine your budget and costs; Find out the standard cost factors within the tour and travel industry. Not only will it help you manage your business more effectively, but also investors are interested in it.
The next step is establishing a budget. Once you determine how much money you’ll have to work with, figure out how much it will take to develop your product or service and create a marketing plan.
Come up with a written business plan; A solid business plan will guide your steps towards success. It will help you achieve short-term and long-term objectives.
Design your product; This is one of the crucial parts when starting a tour operator business. The first thing you need is a catchy name for your tour. One that will sparkle the curiosity of your target customer to book with you.
Be creative. Use adjectives and words that describe the experience. Also, check for popular terms searched on Google, this will help your marketing later on. Use Google Trends for that.
Including the local community in your itinerary will help tourists connect with the destination, which is what most of them are looking for on these days.
Prioritize a marketing plan for your business; Marketing is a big part of a business, and new tour operators should pay attention to it from the beginning. In the early days, digital marketing has grown in importance and you should master it if you want to succeed.