For many travelers, private tours occupy that sweet spot between independent travel and joining a tour or activity group. According to Arival Research, nearly half of US travelers took a private tour in 2023. Are you prepared to take advantage of this travel trend?
As far back as 2018, Travel Weekly published an article called “Rapid growth of private tours transforms industry.” It looked at how tour operators were “seeing a steady increase in demand for custom, private itineraries, whether to a less-traveled corner of Yellowstone National Park, far-flung islands or other remote locales that most people have never heard of.”
The article pinpointed the key factors in the rise in interest in private tours, alongside a growth in demand for more unique and “transformational” travel experiences:
- An increase in wealth
- More sophisticated travelers
- A rise in multigenerational travel
- More luxury development in new locations
- Instagram and the growth of Millennial travel
While the first factor may be impacted by any pandemic-driven economic downturn, the others still apply and may even have grown in terms of increasing demand. Multigenerational travel, for example, is likely to continue to be popular in 2024 as families and groups of friends reconnect after being apart.
COVID-19 also put private travel in the spotlight and introduced the concept, and benefits, to many more people. Add in the general pent-up demand for travel experiences and making up for lost time by doing something memorable, and 2024 should be a big year for private tours.
Why offer private tours?
As restrictions ease and more opportunities to travel open up, are you prepared to take advantage of the rapid growth in interest in small group tours, luxury tours, or highly customized tour packages? Here are some of the reasons to consider private tour offerings.
Generate more revenue
If you are able to create new private tours or adapt existing ones for small groups, it’s clear there is an opportunity to increase revenues by capitalizing on the demand for private tours. United States Tour Operators Association members highlighted small tour groups as their most popular travel product , followed by trip planning and other travel services for FIT (Free, or Fully, Independent Travelers). Private groups were the third most popular, ahead of classic, larger group tours. If you are able to create new private tours or adapt existing ones for small groups, it’s clear there is an opportunity to increase revenues by capitalizing on the demand for private tours.
Reach a new audience
For smaller tour operators who are willing to adapt their tours in particular, the growth in demand for custom private tours and private tour packages presents a great opportunity to reach a new private travel audience. People love to talk about unique experiences. If every person on a private tour tells a few friends about their trip, you could potentially reach a whole new category of traveler who may not have previously considered this type of travel experience.
Piggyback existing products
Adapting existing tours can be the most cost-effective and easiest approach, especially for smaller tour operators. For example, if you run large group tours to a particular destination, you could sell private versions of those tours with additional perks and exclusive activities or itineraries. It’s less work for you than creating brand new tours, and you can sell the benefits of your local knowledge and contacts to travelers considering a private tour to one of your locations. You can even invite customers who went on one of your larger group tours to dive deeper into that location or experience a different side of it with a private tour.
Reassure post-pandemic travelers
While “travel bubbles” may no longer be necessary, many people are still nervous about traveling again or just mixing with a lot of people they don’t know. A private tour could act as a bridge between not traveling at all and taking a larger tour with strangers. Experiencing a private tour could help these people rediscover the joys of travel and reassure themselves that traveling is both safe and enjoyable again.
Reach more millennials
As the largest generation since baby boomers, millennials matter to your tour business. Millennials often look for specific travel experiences, including authenticity, a memorable trip to Instagramable locales, and adventure. They can reject larger group package tours as not unique or tailored enough, making packaged, or ideally customized, private tours very attractive to them.
What do travelers look for in private tours?
There are a number of factors that draw travelers to private tours.
Travel with friends and family
Travelers can choose who they spend their vacation with. Instead of facing all the unknowns that go along with traveling with a group of strangers (at least at first), private tours let people travel with their friends and family. This enables everyone on the tour to just focus on sharing a memorable trip.
Avoid crowds
Small group private tours let people practice more socially distanced travel. People discovered the benefits of this while managing their COVID risks, but they’re also for anyone who wants to just relax in the company of people they know in private accommodation, such as booking all the rooms in a small B&B, and on private transport.
Choose your adventure
A customized private tour lets travelers choose exactly what they want to do and where they want to go. The group can agree on the itinerary in advance, with help from the tour operator. Pre-packaged private tours also let travelers choose the ideal trip for their small group.
Get off the beaten track
It can be easier for a small group private tour to visit destinations and attractions a little more off the beaten track. This appeals to more adventurous travelers, millennials and Instagramers, and groups of friends or families looking to reconnect with a memorable, once-in-a-lifetime trip. The appeal of this kind of unique travel experience is unlikely to diminish.
Save money
A small group can share costs to stay in better-quality accommodations, like renting an entire ski chalet that they might otherwise not be able to afford on their own or as a couple. While the savings are not as large as with larger package tours, they can still be significant.
Let the tour operator handle the details
A benefit of both larger group package tours and smaller group private tours is that the tour operator takes care of all the details. A private tour can appeal to FIT who don’t have the time to organize everything, but who still don’t want to feel like they’re doing a large group tour.
What considerations go into planning private tours?
If you are a smaller tour operator considering adapting your tours to offer a private option, or even adding completely new private tours, there are a number of things to consider before you dive in.
Pricing private tours
As with any tour, how to price private tours is a key consideration. Go too cheap and people may not believe they’ll get that memorable experience they’re looking for. Too expensive and you can limit your market.
Look at what your competitors are doing to see where you can place in the market. Pricing also depends on the type of tour, demand for a particular tour, and your costs (more on that below.) You also need to know your audience and have a good idea of what they might be willing to spend. For example, a younger group may not have the same budget as a group in the 40-60 age range. Do you go luxury (see our article Luxury Travel: 6 Key Trends That Are Dominating the Market for more on luxury travel) or make your tours more affordable to a broader audience?
Bear in mind that most travelers will expect to pay a little more for a more exclusive private tour, particularly a custom private tour. It’s your job to sell them on the value.
Costing private tours
Costs are another huge consideration. Your costs obviously impact your pricing, and private tours can cost more to organize and operate.
Because it can cost suppliers and others more to cater to your group, you may need to pay more in variable costs for things like transportation, accommodation, and food and drink. A bus operator for example may charge more if their bus runs at reduced capacity for a small private group.
You also need to factor in your time spent not only adapting your existing tours in the first place as a one-time cost, but also operating private tours when you will be spending more time on fewer travelers. There will also be additional marketing costs for your new private tours.
As when pricing and costing your other tours, you need to find that sweet spot that enables you to make a profit on each tour without compromising the quality of what travelers expect to be a premium experience.
Custom vs. pre-packaged private tours
The type of private tour you offer factors into your costing and pricing. Fully-customized tours require you to spend a lot more time with your travelers, understanding their needs and putting together and operating a customized tour package. There are a lot more unknowns when it comes to costing and pricing a custom tour, although travelers expect to pay a premium for your time and expertise.
Pre-packaged tours enable you to do the set-up work as a one-time cost so you can focus on selling the tour. It’s easier to operate multiple private tours and keep your costs, and therefore prices, down—while still being able to charge a premium for a private travel experience.
Whether you go with custom or pre-packaged, your aim should be to create high-quality experiences that meet what travelers look for in private tours. Sell the value—and deliver on that value.
Take a look at a couple of other recent articles that could help you come up with ideas for creating private tours for your customers:
- Set-jetting, Forest Bathing, and Hush Trips: 20 Innovative Tourism Business Ideas and Trends
- The Future of Tourism: 10 Things Tour Companies Need To Prepare For
And here’s what some other tour operators are doing:
- G Adventures: Family group tours
- On the Go Tours: Pre-designed tours for private groups
- Trafalgar Travel: Private tours for groups of 12 or more
- Go Ahead Tours: Small private group tours
Targeting the right audience for private tours
Targeting the right audience is key to the success of your tours, and it will also help you cost and price your private tours. The good news is that, especially after COVID-19, many travelers have already formed themselves into “bubbles.” Your task is to look at your existing customer base and reach out to them with your private tour offerings, positioning them as a way to reconnect with friends and family or just have a memorable experience.
Groups that may already exist for people already in your database, as well as any new target audiences, include,
- Groups of friends
- Art and culture lovers
- Sports enthusiasts
- Hikers and climbers
- Golfers
- Multi-generational families
- Bachelor and bachelorette parties
- Small wedding parties
Overcoming logistical challenges of private tours
Juggling private and larger group tour packages can take up valuable time and resources—not to mention adding stress. We developed Rezgo’s resource management system to do the work for you. You can offer a wide range of customized options to help you create private tours without worrying about overbooking or availability management.
Why not dip your toe into the private tour market by offering a private version of one of your existing tours? It could open up new revenue opportunities and help you reach new audiences.
Written By | Rob Mathison
