The Pandemic Didn’t Kill Free Walking Tours – They Were Already Dead

The Pandemic Didn’t Kill Free Walking Tours – They Were Already Dead

January 7, 2021 0 By aure

Free tours are an economic paradox. They’re free, but the people organizing them manage to make money anyway. How?

If you have been on a free tour and chances are that you have, you know that that they are not really free. No one works for free (unless interns in Belgium, whoops!)

Free tours rest on their customers’ honesty and generosity to make a living. They work solely on tips. As such, their income is as irregular as getting Tinder matches in Brussels.

How do I know that?

During the last two years of my student life, I worked in a tourism company organizing various activities and had the chance to befriend a bunch of free tour guides.

While free tours were a great business to be in between 2010 and 2017, the non-existent barriers to entry made the competition fierce. If I take Brussels as an example, the city went from one company in 2013 to 4 or 5 in 2019.

In the beginning, added competition did not matter as the volume of tourists was growing fast. In 2019 though, it became difficult for free tour companies to find tourists as everyone was fighting over them. The market had reached saturation.

The pandemic subsequently came and reshuffled all cards. Tourists disappeared. Guides went home. Cities went silent.

It is obvious that the tourism industry will pick up once this whole thing is over. But what about free tours?

The Simplest Business Model

Making money as a free tour guide is ridiculously simple. Step 1, learn about your city. Step 2, stand on the main square with an umbrella screaming “FREE TOURS”. There is no step 3.

The barriers of entry are so low that when the first free tour guides started making serious money, the word on the block spread fast. Free tours multiplied quicker than catholic rabbits.

Soon enough, guides started fighting, sabotaging each other, often ending up with police interventions which paradoxically, decreased the renown of the city.

To avoid such problems, some cities established a mandatory certification of tourist guides (Vienna, for example). The cities that did not suffered overload.

As such, the question surrounding free tours is not about whether they will come back, but whether they should be allowed to.

Economically, free tours make little sense since you can legitimately join, enjoy the experience, and just leave without giving any tip.

I did it. Don’t blame me, the tour sucked. And that is the exact problem.

Can you really expect quality from a product that labels itself as free? 

Free tours were an easy way to make money because the service given did not have to be very elaborate. Virtually anyone could do it, with the consequences that we know.

Socially, many guides started working for very low wages as companies had to find out a way to give the best value – while keeping the tour free – to customers that had an ever-expanding choice of free experiences. Simultaneously, the customers enjoyed very poor experiences from guides exhausted from the competition.

As such, we are entitled to challenge whether free tours should keep on running, or whether we should reform the concept altogether.

Economics 101

Paying is not bad. Making money either. It’s what enables us to live free in a safe, secure, and prosperous society.

In a capitalist regime, the price of a good or service is proportional to the value delivered. Kobe beef is expensive because it is amazingly delicious. McDonald’s is cheap because it is disgusting.

By branding themselves “free”, free tours suggest that the value they deliver is not worth paying for. I argue this hurts the guide as much as the tourists.

The purpose of a tourism experience, after all, is its quality. People pay a bunch to fly and see Paris because it is (arguably) one of the most beautiful cities in the world. Similarly, you can pay the backpackers’ hostel $10 a night and sleep in a room with 20 other people, or pay the Ritz Cartlon $350 and enjoy a swimming pool, sauna, breakfast in your bed, and a fantastic view over the city.

It is unrealistic to think that people don’t want to pay. They do. What they don’t want is getting ripped off. As such, people want to pay as much as the value they get out of what they spend.

This leads us to think that instead of competing on prices, which is a race to the bottom, free tour companies should see beyond prices and focus on quality. They should focus on giving value.

Phrased otherwise, instead of giving tourists the price they want (nothing), they should focus on giving them the experience that they want for the price they estimate it is worth. And that won’t be “zero”.

Reinventing Free Tours

Free tours must stop giving minimum service and need to up their game and charge for it.

No one wants to stand 2 hours in the heat/cold/rain/humidity to listen to a hippie blabbering about a 17th-century church whose sole proof of existence is the wholes where its pillars once stood.

Information is nice, but in an information-based society, what we truly seek is experiences. Call it entertainment if you like. Personally, I always felt the free tour did not show enough of the city and gave too much information.

When tourists travel to a new destination, they expect to see something different, hear something different, meet someone different, drink something different, and eat something different.

Free tours (let’s call them just tours) should focus on doing very well one of these (like the red bus which takes tourists to every tourist spot in 1h30 and despite its price, is a functioning business) or should offer them all in a bundle.

It’s time to improve and give people the experience that they want: food, drinks, a chat with local people, a mini-language course, and a reason to link the culture they are in with their own (because we remember what concerns us, which is why I remember none of the info I learn in free tours).

For example, a group of Dutch visiting Japan should be told about the historic trade ties between the Dutch and Japanese. A group of French visiting Russia should be told about the cultural links that existed prior to the Soviet era.

People come to hear, see, and learn information about another culture, but it only goes so far. “If you want people to listen to you, tell them about themselves”.

The Bottom Line

When free tours came to be in the early 2010s, they gave students and backpackers the chance to enjoy holidays on the cheap. However, low barriers to entry and rapid spread of the concept have made the free tour business-model unprofitable.

As the pandemic killed the tourism industry, it’s time for free tour companies to rethink their business strategies. I am ready to bet that we are about to enter a period emphasizing quality over quantity. The customer is done with 1 kg of cheap ice-cream. He wants 250 gr of amazing ice-cream!

By the same token, it’s time for free tour companies to exit the tip-based business model and embrace value-delivering. It’s time for them to up their game, come up with a pricing strategy, and focus on quality.

This will help tourists have a better experience. This will help guides earn an honest income. And above all, this will cut out any unserious competition that intended to make a quick buck with Wikipedia stories, and a yellow umbrella.

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Picture credits: Photo by Ferran Feixas on Unsplash