Locals Are an Untapped Market for Tours and Activities Companies

Last month we released a report in the Skift Trends series, Future of Tours and Activities Tech and Marketing.

Below is an extract. Get the full report here to get ahead of this trend.

Tours are traditionally thought of as any activity for travelers visiting a destination from elsewhere. But as a number of tour industry executives are realizing, there’s an equally large opportunity to cater to in-destination residents as well.

“I think the tours and activities market is actually many multiple is larger than anybody realizes,” says T.J. Sassani, CEO of tours and activities company Zozi. “There’s this whole untapped opportunity to market to not just the people that are looking for a tour or attraction…but really engaging and activating the local consumer [as well].”

From a simple numbers perspective, this approach makes sense. Whereas a traveler might only be in a destination for a single week out of the year, a local customer lives in the destination year-round, offering fifty times the number of purchase opportunities.

Indeed, other executives suggest that locals represent an increasingly important revenue stream for their business. “Today our business is half travelers, half locals,” said Guy Michlin, co-founder and CEO of EatWith. That said, catering to this group creates a new set of marketing challenges. “It’s relatively easy to explain to travelers what [our company] is, it’s the locals that sometimes become challenging in terms of how you explain the value.”

For the walking tours sector, explaining their value to locals relies on being consistent in product positioning and messaging. “We present ourselves the same regardless of who the client is, but the key is to understand the differences locals and tourists have,” says Seth Kamil, founder of Big Onion Tours in New York City. “Don’t assume base knowledge, don’t over patronize and don’t oversimplify. The key is consistency.”

Rather than being one-time customers, Kamil now reports that his tour patrons return four to five times on average, and 40 percent live within 40 miles of Manhattan.

Perhaps more importantly though, tour operators may need to reposition their products beyond the typical tour distribution channels in order to succeed with locals. Whereas a traveler is probably using TripAdvisor to look up potential activities, locals rely on review platforms like Yelp and Google to find local businesses. Some tour industry executives believe the solution lies in ignoring the longstanding marketing wall that exists between “travelers” and locals and simply selling wherever potential customers might be.

“Yelp has developed themselves as a local brand, and TripAdvisor has developed themselves as a travel brand. I think that plays into the challenge to capture the local in the tours and activities market,” says Sassani. “In order to do that, your brand has to be positioned towards locals. That’s really our strategy and the way we approach it.”

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