Tours Land Grab Under Way as FareHarbor Gives Temporary Lifeline to Zerve

UPDATE: Since initially publishing this story Sunday, tours and activities platform Zozi has publicly offered to provide Zerve with the resources to stay open for the sake of Zerve’s tour company clients for 60 to 90 days, and to explore acquiring some of Zerve’s assets. Zozi founder and CEO TJ Sassani wrote in the post that his company went public with the offer after failing to get a response from Zerve through private channels.

By all accounts, Zerve is slated to cease operations this week after accepting what Skift has learned is an approximately $100,000 payment from Zozi rival FareHabor, which claims it has already onboarded some 200 of Zerve’s roughly 500 activities’ clients. The payment was to be used for payroll and other expenses. After agreeing to take the payment from FareHarbor, Zerve sent a communication to clients recommending FareHarbor as a successor platform.

The original article follows: 

Tours and activities booking platform FareHarbor provided a “six-figure” sum to competitor Zerve to extend its life through at least July 8 and Zerve is recommending that operators switch their partnerships to FareHarbor rather than to others such as Peek and Zozi.

Max Valverde, FareHarbor’s chief commercial officer who’s based in the Denver company’s Needham, Massachusetts office, confirmed the six-figure transaction and acknowledged that Zerve, which emailed customers June 30 that it would be going out of business July 5, reached a “gentleman’s agreement” with FareHarbor to recommend the latter as a platform replacement.

Valverde says Zerve had been recommending FareHabor informally anyway and there was no quid pro quo about the recommendation.

The demise of 13-year-old Zerve, which by all accounts had a great reputation with its tours and activity company clients, seems tied to a change in its commission structure that took place a couple of years ago when the company took on venture capital funding — $34 million — from the likes of Draper Fisher Jurvetson, AME Cloud Ventures, and NAV.VC.

At the time, New York-based Zerve changed from a flat 10 percent commission on back-end bookings and 15 percent on Zerve.com to 3 percent commission on all bookings in a bid to steal share from rival platforms and consumer offerings such as Expedia and TripAdvisor’s Viator.

That paltry 3 percent commission, though, also had to support an extensive white-label call center presence for clients and phone bookings. Zerve’s technology, especially its mobile offerings for tour operators, also didn’t keep up with the times, rivals and tour operators say.

The demise of Zerve has set off a scramble by platform rivals such as Zozi, Peek, Bookeo, Bookingboss, Rezdy, and FareHarbor to win over Zerve’s tours and activities clients who were left in the lurch just as the busy summer travel season got under way. Many of these tour companies have Zerve phone numbers on their websites and literature, and Zerve-hosted user reviews which are all at risk during the transition to another provider.

FareHarbor’s Valverde said he and colleagues had all-night conversations with Zerve personnel Thursday night “while the lawyers were all asleep” and worked out an agreement for FareHarbor to provide Zerve with cash to keep it running for another week to ease the migration issues for clients.

The next morning, July 1, Zerve sent its tour customers a second email recommending FareHarbor as “your new ticketing partner.” Acknowledging that FareHarbor had been a competitor, Zerve wrote: “We believe that the folks at FareHarbor share similar values of caring deeply about their customers, providing an excellent service, and generally running their business with integrity.”

Zerve announced its likely shutdown would be extended until Friday, July 8, instead of Tuesday July 5.

“At this point it’s basically triage,” Valverde says. “We are advising people how to save Zerve phone numbers and reviews.”

The atmosphere is getting very heated among the various platform rivals seeking to on-board Zerve’s clients.

In an email obtained by Skift, Rezdy CEO Simon Lenoir wrote: “Zerve announced they took money from FareHarbor. With the business shutting down we can’t blame them. We hope the funds will indeed help Zerve to extend their services to give you time for a smoother transition, and hopefully a bit of cash left to support Zerve staff and families left behind.

“What is not acceptable for you, as a business owner, is that your information, including login details, is being shared with FareHarbor without your consent. This is a breach of privacy and security to your business. As a business owner, you should be worried about such commercial tactics from someone you need to trust with your online bookings, payments and customers information. Arranged marriage seems a bit out of fashion to us at Rezdy. It’s your business and you should decide who you are going with.”

Valverde of FareHarbor denies the claim of Rezdy, with offices in Australia and Las Vegas, that Zerve shared any data, including client lists, with FareHarbor.

Ruzwana Bashir, founder and CEO of San Francisco-based Peek, said Friday that Peek has already on-boarded a lot of Zerve’s former tour customers. “It really kicked off yesterday and it’s been hectic today,” Bashir said. “There’s a lot of respect for Zerve and we are really sorry to hear the news.”

Bashir is in the camp that says Zerve fell flat in mobile, saying that PeekPro cannibalized Zerve’s market share.

In addition to reaching out to Zerve’s customers, Bashir says Peek is hearing from Zerve employees and seeks those who are passionate about tours and activities.

Carrie Burns, executive producer at Atlanta Movie Tours, said her company transitioned from Zerve to Peek in February and is now concerned about $3,500 in advanced bookings that Zerve is still responsible in compensating Atlanta Movie Tours for now that Zerve will shortly cease operations.

“People loved Zerve and they came and saw and met with you,” says Burns, adding that Zerve was instrumental in the growth of Atlanta Movie Tours. “But somebody has to pay for that.”

Burns says Zerve’s mobile offerings didn’t keep pace.

“Zerve cares about its customers,” Burns says. “So that’s why their email was so incredibly shocking.”