Launching a new business in the midst of a global economic crisis might not seem like such a great idea, but it worked out well for Paul Melhus, MBA’83, the CEO and co-founder of ToursByLocals.
A private tour provider that connects tourists with local guides in 157 countries (like Nyoman Gede in Bali in the photo above), ToursByLocals set up shop during a particularly grim period for the tourism industry – which made it simpler to recruit prospective tour guides. With travel in decline and fewer customers coming their way, tour guides were willing to give the new company a shot. What could it hurt?
“There was so much fear and uncertainty in the world, it was an easy sell,” says Melhus. “Spend a few hours, set up a profile, put up some tours and then, maybe, you’ll get some business.”
Eight years later, ToursByLocals is going strong. More than 500,000 travellers have gone on tours with the company’s guides. Headquartered in Vancouver, ToursByLocals also has staff in Buenos Aires, London and New Delhi.
Melhus, an enthusiastic traveller himself, says the idea for ToursByLocals originated during a trip to China. While visiting the Great Wall, he and company co-founder Dave Vincent were approached by two Chinese women who started chatting with them. They eventually offered to give the visitors a tour.
“They were quite charming, so we had their tour, but there was always an undercurrent of ‘why are they doing this, what do they want?’ It made us slightly uncomfortable,” explains Melhus.
And things did awkward at the end, with the women expecting Melhus and Vincent to purchase cards and souvenirs from them. On the flight back home, Melhus and Vincent began thinking of smoother ways to connect tourists to local guides in different countries. “There had to be a [way] to make both parties happier,” Melhus says.
The company is choosy about the tour guides it partners with. Only about 10 per cent of the tour guides that approach ToursByLocals are selected. Prospective guides are interviewed several times through Skype, and reference and background checks are done on the most promising candidates. Once accepted, the tour guides receive assistance in creating a profile for themselves on the ToursByLocals site, and training in customer service.
As for the company’s customers, Melhus says tourists are increasingly drawn to the sorts of out-of-the-ordinary spots that a local guide can steer them towards. “People don’t want to have a kind of pre-packaged canned experience.” That’s certainly not the kind of vacation he wants for himself. Melhus likes living like a local, checking out the must-see sites, but also experiencing some of the off-the-beaten-path attractions.
He is pleased with the range of his company’s offerings – from bird-watching excursions in Addis Ababa, to a visit of the Hermitage Museum in Saint Petersburg, to opportunities for eating putrid shark in Iceland (it’s a national dish there). According to Melhus, Game of Thrones-inspired tours are particularly popular right now. ToursByLocals offers tours for castles and other spots in Croatia and Northern Ireland where the TV show had been filmed.
Building and maintaining strong relationships with guides is a key component to ToursByLocals’ strategy – even when that means offering advice that initially strikes the guides as being odd. For instance, in Bali, some of Melhus’s guides were trying to sell tours at too low a price. What the guides didn’t realize was that their prospective customers worried that the deal was too good and that there had to be a catch. ToursByLocals convinced the guides to double the price. “They received more business at a higher price so it made everybody happier,” says Melhus.
He takes pride in the relationships his company has built up with tour guides around the world. “We’ve made a difference in the lives of [our tour guides], especially in developing countries where people participate in the travel business at the margins,” says Melhus.
