Developed by Groupon founder Andrew Mason, Detour is an audio walking tour app that uses geo-location technology to immerse users more immediately in the rhythm of a neighborhood.

Less than a year old, Detour launched a 2.0 iteration today with a new user interface, a smarter back-end, and a new business model. Although, there’s still questions about the mainstream adoption potential of travel apps like Detour.

The geo-location functionality, which tracks a person’s precise location, means the narrator speaks at the same walking pace of Detour users as they move along the tour route. So, for example, the narrator will direct participants into a historically significant cafe on a street corner as soon as the app senses that they have arrived at that corner.

Sample tours include a route through New York’s Bronx borough to explore the birth of hip-hop. Another in San Francisco’s North Beach district explains how the Beat Generation writers advanced freedom of speech rights in America during the 1950s.

Geo-location also makes Detour a mostly hands-free experience, so users aren’t constantly looking at their device to follow a pre-determined path. That frees up participants to be more in the moment and more aware of their surroundings.

Detour 2.0 Upgrades

With the next generation of Detour, users can now stop the app at any time and move to a different juncture in the itinerary if they want to proceed in a non-linear fashion. The narrator will then pick up automatically wherever the user is located when the app is re-engaged.

The end result is a more personalized local travel experience that connects travelers with the community on their own terms, when and where they want.

The app also acknowledges different user preferences now. Some of the San Francisco tours use the cable car for one leg of the itinerary, for example, but there’s often a long wait for trains so the app now provides alternate shortcuts.

Each tour now has a new directory of things to do with recommended local experiences to explore after the tour ends. There’s also new outside links for added contextual information about the subject matter in each tour.

Lastly, the touring engine will now adjust the tour routes based on the time of day, weather, and operating hours of local businesses, so users are not directed to establishments or experiences that are closed at that time.

New Business Model

“Not to be overly dramatic, but Detour is like a phoenix rising from the ashes of the guidebook industry for the mobile generation,” says Mason. “But we’re not just repackaging guidebooks into the app. Detour is an entirely new user experience.”

His strategy for Detour up until now was simply to build the best possible user experience that connects the consumer and community as seamlessly and intuitively as possible. For this to scale, ease-of-use is paramount.

So most of the focus to date has been on San Francisco, where the company is located, and where it’s been easiest to experiment with different formats. At the same time, Detour has expanded domestically and internationally with miscellaneous city tours scattered from Austin to Marrakech.

However, there has been some question up until now about who the primary audience is—locals or tourists?

In today’s Detour blog post, Mason writes: “You might be asking yourself, ‘Who is Detour making these for, exactly?’ So far, the answer has been, ‘ourselves.’ It’s hard to make great Detours. So by making a lot of them, and a variety of them, and doing it in our backyard, we’ve been able learn quickly and experiment wildly, all while making some wonderful-for-their-financial-untenability experiences along the way.”

Mason says that locals provide more sales volume opportunity but his research shows that locals tend to not purchase walking tours in their own city. Tourists, however, he says, provide better growth potential because of the exponential demand for local experiential travel with a personalized delivery.

Moving forward, Detour is specifically targeting the tourism market. With that in mind, the 10 San Francisco tours are now sold for $25 as a package, whereas previously they were priced individually for $5.

Compensating for that, Detour’s group sync functionality is now free for up to four people. Before, each person in a group scenario was required to purchase their own dedicated tour. Since Detour launched in February, over 50% of customers have walked the tours in small groups and synced their phones so they all hear the same content in unison.

Presently San Francisco is the only city with a fully developed slate of tours sold as a package deal. In 2016, Detour will roll out $25 multi-tour packages for Los Angeles, Chicago and New York, while existing tours in the other cities will remain available for individual download.

Converting Consumers

It costs about $25,000 to produce one tour, so a full city package requires a quarter million dollar investment. Mason says that about 18 million tourists visit San Francisco every year, and about 5% of them go on guided tours around the city. If Detour can capture 5% of that 5%, that’s 45,000 purchases at $25, equaling $1,125,000.

“Then we just build that out in lots of cities,” says Mason. Looking at the pricing structure from another perspective, he explains that the person who narrates Detour’s San Francisco architecture tour also gives guided group tours in the city using similar information for $40 per person.

“So if you have four people in a group doing that guided tour, that’s $160 total,” he says. “With Detour, it’s still just $25.”

In addition, Mason believes solo business travelers will be willing to pay $25 for the package of 10 tours even if they only have time for a single tour, because of the value of the experience, and because business travelers often return to the same cities.

“Also, when people buy a guidebook, they don’t buy it to read the whole thing,” he suggests.

With today’s relaunch now complete, the next phase for Detour is going to focus on developing partnerships with destinations, airlines, hotels, online booking agencies, and other tourism companies to integrate Detour as a travel add-on purchase to their regular products.

The challenge here is to convey the actual Detour experience, which is incredibly well produced, to an audience that often negates these types of tours at first glance.

“People have really low expectations of audio tours, which is both a blessing and a curse,” says Mason. “Now that we have the product where we want it, we’re focusing on building the customer awareness funnel to show what Detour can do.”

Photo Credit: Promotional photo for Detour in San Francisco. Detour