Virtual Tours Probably Won’t Save the Tourism Industry
Welcome to our new online world. Things sure are a lot different than they were a few months ago. That’s true in a lot of aspects of life, and especially in the tourism industry. I know because I own a small walking tour company, Trip Hacks DC Tours.
Industries are doing their best to adapt. Some moved online with relative ease, but many are struggling with the digital pivot. Barbers can’t sell virtual haircuts. Theme parks can’t sell virtual roller coaster rides. The tourism industry is scrambling to figure out the right path.
The last tour my company operated was on March 12th. It’s still uncertain when we will return. Tour companies like mine need cash to survive the pandemic. So it’s no surprise I’ve heard the term “virtual tour” more in the past month than in all the years I’ve worked in the industry. On paper it seems like a golden ticket. I’ve spent a lot of time thinking about virtual tours.
That said, I just don’t see it.
The Best Tours are Experiences
Guided tours have existed for as long as there have been tourists. When people travel to a new place it’s helpful to have a local there to show them around. But in the smartphone era, tours guides are more than just the person who knows how to get from one site to the next — we have Google Maps for that. And they are more than the person with the facts — we have Wikipedia for that. They are the person who delivers an experience that you’ll brag about to your family at Thanksgiving dinner.
I call this the Thanksgiving litmus test.
Tours serve a lot of purposes. But first and foremost they are entertainment. They are fun! Our tours are activities you look forward to before the trip and fondly reminisce about years after. Competition for our business isn’t just other tours, it’s sports games and concerts and hip restaurants. It’s anything that someone could do with three hours of their vacation.
Tours are something you look forward to before the trip and that you fondly reminisce about years later.
The beauty of this is that people pay premium prices for these experiences. A ticket to our Monumental Trivia tour sells for $45 per person. That’s on-par with a ticket to attend a Washington Nationals game, or an opera at the Kennedy Center, or my favorite seven course tasting menu at Little Serow. And just like those experiences, our tour is designed to be memorable; an activity that passes the Thanksgiving litmus test.
Virtual Tours Aren’t Comparable
I love baseball. I’ve attended a hundred games at Nationals Park over the past decade. I’ve also watched more baseball games on TV than I can count.
On paper, “virtual baseball” is better than the live event. You get a close-up view of the action. You get play-by-play and color commentary. You get to sit on soft furniture. And the beer is a tenth of the price. I sign up for a simple cable package and for the same price as a single ticket I get access to every single game that month, plus a hundred and fifty other channels. What a steal!
We all know that “virtual baseball” isn’t even in the same universe when it comes to the experience. Watching a game on TV provides me with three hours of entertainment, sure. But I can’t tell you about memories of games I watched from my living room no matter how exciting the game was. I can, however, rattle off the best walk-off wins and pitching gems that I witnessed in-person.
Virtual Works… Sometimes
MLB owners make plenty of money on “virtual baseball”. There’s a lot that goes into broadcast deals, but the oversimplified explanation is that it ultimately works because of volume. My little tour company has its fans. Almost a thousand of them like our Facebook page and 15,000 subscribe on YouTube. But it’s nothing compared to the 750,000 Facebook fans that the hometown Washington Nationals have amassed. Or the 8.5 million Facebook fans of the New York Yankees!
Just like baseball on TV, some people will happily pay for and enjoy virtual tours. They probably won’t pay the same price as a ticket to the real thing, but they will trade a few bucks for a couple hours of entertainment.
Airbnb only needs a tiny fraction of their millions of users to do an online tour to call it a success.
Established companies with big email lists and social media followings are the ones positioned to capitalize. This is why Airbnb was first out of the gate with their online experiences. Their database of tens of millions of users gave them the volume advantage needed to pull this off. Millions of people aren’t doing online tours, but Airbnb only needs a fraction of them to try one to call it a success.
Do People Even Want Virtual Tours?
It’s worth taking a step back to ask why there is such a surge in interest all of a sudden. Is all the clamoring for virtual tours in response to customer demand or in response to desire for tour companies to put much needed cash back in their pockets?
Is all the clamoring for virtual tours in response to customer demand or in response to desire for tour companies to put much needed cash back in their pockets?
One reason I’m skeptical of virtual tours is because of the data from the Trip Hacks DC YouTube channel. I post new Washington, DC travel videos about once every week. The channel has grown steady over the past three years and averaged around 60,000 monthly video views in 2019. Mid-March this year saw a dramatic decline in video views that has not yet started to recover. From my perspective, the stats show that people just aren’t interested in this kind of travel content right now (at least not on the same scale as before).
Google Trends shows a similar pattern. Searches for “Washington DC tour” (blue) fell off a cliff in March and stabilized at a much lower level. “Washington DC virtual tour” (yellow) popped off the axis around the same time, but never surpassed it. “Washington DC online tour” (red) never got any traction at all.
As much as I’d love to believe that all the people who cancelled spring or summer trips are clamoring to jump online and take their vacation virtually, the data doesn’t back it up.
A Level Playing Field
COVID-19 hit the reset button on the tourism industry. Whether a tour company did a million dollars in sales before mid-March or a few thousand, just about everyone in the world dropped to zero. That’s a scary prospect no matter your size. But it’s also a rare opportunity, especially for us little guys because we are all going to be startups again soon.
We are all going to be startups again soon.
Spending time and energy developing a virtual tour might earn my little company a few bucks. At a time when no other money is coming in, it’s tempting. It truly is. But it could also be a strategic misstep if our competitors invest their time and energy pursuing new fans who will pay full price for a real experience the next time they travel to Washington, DC.
Virtual Tours… Yes or No?
It’s not fair to say that virtual tours have no value. I virtualized our Monumental Trivia tour by running a live trivia game on YouTube on April 25th. Seventy-five people showed up and played! It was free and the feedback was overwhelmingly positive. If a few of those people book the real Monumental Trivia tour later this year or tell their friends about Trip Hacks DC, then I’d call it a success.
Even some of the big tour companies clearly see virtual tours as a marketing opportunity rather than a money-maker. Shane Whaley traveled to Pompeii from the comfort of his home and described his experience on the Tourprenuer Podcast. The tour company, Walks, sold him the virtual tour for $10 but included a $25 voucher for a real tour in any of their cities. That means on paper Walks could lose up to $15 for every ticket sold.
Except that the math isn’t quite right, because some of that $15 is probably what Walks would have spent on advertising anyway. Plus they know that as long as the customer has enough fun on the virtual tour that they are not going to consider another company on their next trip, since they already have the voucher. Walks locks in future loyalty.
I may not feel enthusiastic about virtual tours, but I still see plenty of opportunity in the future. In 2019 over 20 million people visited Washington, DC. When I walk around the National Mall with my tour groups, I can’t help but notice all of the families out exploring the monuments on their own, without a guide. They are all potential customers. My mission has always been to reach them and convince them to come tour with me. That’s not going to change. I’ve got some new ideas for how to make that happen. But virtual tours are not part of that strategy.
