It was not too long ago when busloads of Asian tourists pulling up to the Orchard Road shopping belt and other classic sites in Singapore defined the city’s tourism landscape.
But today googly-eyed travelers, enabled by an explosion of online content, are breaking out of the traditional tourism bubble to experience the pulse of the city and get closer to hidden local realities.
New players are entering the city’s tours industry to answer this demand, creating fresh itineraries that give visitors privileged insider access to different facets of the destination. Yet the costs of these tours is a struggle for these new entrants.
One such operator is Tribe, which offers its signature “disappearing trades” tour, as well as highbrow programs such as those themed around the city’s unique urban planning story.
Law Yock Song, director and partnership head of Tribe, shared, “Our disappearing trades tour includes three stops, all centered on private access to artisans who are soon-to-retire without successors.”
In 2016, when Tribe was founded, the company offered four tours. Today, it has 14 unique itineraries.
Another young entrant in the local tours scene is Oriental Travel & Tours, which was established in 2017, with an initial focus on heartland experiences. The founders participated in the Singapore Tourism Board’s inaugural Tour Design Challenge last year, and three of its tours were selected. At this year’s challenge, all six of its tours made the cut.
One of its newer tours, the Creepy Tales of Singapore, takes participants to one of the last battlegrounds of World War II in Singapore, and other dark and spooky spots.
Co-founder Jasmine Tan admitted that it was a big decision jumping with both feet into the tours sector.
“My business partner and I came from an advertising background. We started guiding after taking a course together, and realized the itineraries didn’t quite work. Many of the larger agencies aren’t exactly on-the-ground and lack an understanding of what kinds of experiences tourists want.
“In some ways we are entering a sunset industry. But we have a passion for creating new tours and thought to ourselves, ‘we can do a better job’.”
These smaller new entrants could be key players in nurturing the long-haul U.S. and Europe inbound markets, and less the neighboring Southeast Asian market.
“Southeast Asia is maturing, but many visitors from the region still choose shopping and sightseeing tours, which are priced very competitively. The established operators can continue to cater to that as they have the [economies-of-scale] to keep prices low, [and existing business relationships]. But these are not the segments that have been booking our tours,” Law said.
Both Tribe and Oriental, which broker insider access and in-depth content, are finding fast demand from the U.S. and Europe. They said they are getting these customers not just from online bookings, but also from direct business-to-business relationships. Tribe traces 70 percent of business to corporate travel and other offline companies. At Oriental, the U.S. is its strongest market, with business driven by its relationship with a tour operator in Seattle.
Innovation, however, is not easy business in Singapore’s tours industry. Budding new players face tough price competition from both legacy players and online platform listings, while also shouldering additional expenses and risk.
“The operating cost for small group tours is very high in Singapore. Most don’t notice the extent of this. The cost of guiding services for just four hours makes it such that we have to charge at least $73 (S$100) per person for a small group. On top of that, there are transportation costs,” Law shared.
Moreover, budding tour designers are constantly having to develop new products and evolve existing ones to stay relevant. The cost of developing a new in-depth tour can be as high as $22,147 (S$30,000), according to Law.
Content-driven tours are another of Tribe’s specializations. From demystifying the life of late founding father of Singapore Lee Kuan Yew, to creating urban planning themed programs, product development can require many hours of research, interviewing and expert consultation.
Tribe has benefited from the Singapore Tourism Board’s Experience Step-Up Fund, a scheme supporting unique tour ideas, having been awarded the grant for its About Mr Lee Tour. Skift understands the Experience Step-Up Fund can amount to up to 70 percent of projected product development costs.
The fund gave Tribe a boost to develop About Mr Lee Tour, and helped the company get its name out. Still, the piecemeal support does not necessarily defray costs of doing business in the long run. And if awardees fall short of key performance indicators, the grant is pro-rated despite the cost already sunk into developing the product.
The Airbnb Factor
For Law, disruption in the form of Airbnb Experiences and Klook aren’t exactly helping. He said: “On Airbnb Experiences for example, players easily undercut in products like walking tours as they do not have overheads. That’s why Tribe doesn’t focus on walking tours, which are easily disrupted.”
But Oriental is going with the flow, with plans to list on Airbnb Experiences next year. Tan said: “Travelers today are digital-savvy and their booking behavior is changing. [Rather than swim against the current] we plan to get on Airbnb Experiences eventually, on top of continuing to work with our existing partner in Seattle.”
With online travel platforms increasingly branching into tours and activities, there are greater opportunities for tours companies to leverage these platforms to broaden their reach.
But online travel trends are also inspiring changes in the tours business model. At Tribe, being part of the disruption isn’t about listing on these platforms — but becoming its own aggregator of quality tours and activities.
Law, who handles partnerships at Tribe, envisions the company will become a tour designer-aggregator hybrid. As the Tribe brand’s association with quality tours grows, so will demand from other tours companies to list on Tribe platforms, he surmised.
Today, Tribe has listing partnerships with two other tour companies, one of which has its Jewish-themed tours on the Tribe platform.