Private Guides: Checking In With ToursByLocals CEO Paul Melhus

Whether planning staycations for now or far-flung “bucket list” trips for 2021 or beyond, there’s no better way to safely explore, learn about and enjoy any destination than with the insider's knowledge of a local private guide. This premise is what inspired the creation of ToursByLocals by co-founders Paul Melhus and Dave Vincent, when by happenstance they were given an impromptu tour of the Great Wall of China by two local farmers, which ended up being the highlight of their trip in 2006. By 2008, these two former software engineers created the platform for ToursByLocals, starting with one guide in Canada. Fast forward to today, the company has 4,705 guides in 180 countries. In our quest to share the best post-COVID-19 resources, Luxury Travel Advisor had a Zoom chat with ToursByLocals CEO Paul Melhus to learn more about booking bespoke tours around the globe.

ToursByLocals has over 4,700 guides in 180 countries; how do you find them and know they are the best?

From pretty humble beginnings, we have steadily grown to having 185 global corporate staff in Vancouver with satellite offices in Buenos Aires, Glasgow and Kuala Lumpur. Our main focus has always been to find the best guides around the world and have the most technologically advanced platform for booking in and caring for our clients. Accordingly, vigorously vetted tour guides are the foundation of ToursByLocals; we actually only accept one in 10 after an extensive selection process to ensure the highest level of safety and quality. We also use the Thompson Reuters World-Check service to screen initial applicants for security and all guides are re-screened every six months.

How do you create itineraries for clients? 

ToursByLocals experiences are driven by the passions and expertise of the local guide—many with master’s degrees or similar qualifications—which are then customized according to guests’ desires, allowing locals and travelers to connect through shared interests. We aim to give travelers that “ah ha!” moment and really have a tremendous range—from local market visits and hands-on cooking classes in Lima, Peru, or a private tour of a Māori “Living Village” from a Māori guide complete with the iconic Haka in Tauranga, New Zealand, or a traditional tea ceremony, Kimono textile-weaving and dyeing workshops in Kyoto, Japan, to a one-of-a-kind harvest excursion in the UNESCO World Heritage-designated wine valley of the Douro region of Portugal, including hand-picking grapes and a “grape treading” experience, there’s really something unique for everyone in any destination. 

How do you work with travel advisors?

Very closely—truly, travel advisors are our best partners. In a normal year, travel advisors make up 15 percent of our booking; this has grown slightly during COVID-19 and we hope it keeps on going. We have a travel advisor portal, where agencies register. Once registered, commission for advisors is structured in two levels, starting at five percent and rises to ten percent after booking $7,500. The $7,500 is per agency, so most qualify for the higher-level quite quickly.  Once an advisor registers and are made active, they can reach out to local guides directly and book within the portal. All payments are made in advance on our site, so there is no money changing hands on the tour, with each guide setting their own price. There is no expectation for a tip on top.

How has your business been affected by the COVID-19 pandemic?

Quite dramatically. Prior to COVID-19, our business was growing 40 percent per year, with 35 percent of our sales coming from people on cruises (the more sophisticated cruisers who’ve already done what the cruise lines offer). As soon as travel restrictions began, we opened our cancellation policy. We needed to give a lot of refunds, and we did; thankfully, we were well-funded going into the pandemic. By April, our deliverable tours went down to zero. Now, our business is 90 percent down. While we have been able to stay solvent, we had to lay off 25 percent of our corporate staff. Where we could, we redeployed people to keep them employed and have focused our relief efforts around the world by creating a Guide Relief Fund, raising $650,000 to loan to guides around the world, which they can pay back whenever business returns. Top countries where our guides have received income relief are Italy, India, Mexico.

What are your top-selling tours at the moment? 

The big shift for us has been the U.S. domestic market, where we’re seeing an uptick for places like Yellowstone, Savannah and New Orleans. There is huge interest in people exploring the national parks and experiences that are outside and not as crowded as the big-city attractions. Yellowstone alone has seen an 88 percent increase in bookings as a result. We’re still seeing long-term bookings in the usual suspects like Italy, France, Germany, etc., but these are mainly for tours next year. 

How are you managing safety with COVID-19?

Private tours are the best way to experience any destination, and that is especially true now, as our local experts know how to avoid crowds, have the contacts to organize exclusive bookings, and can arrange for clean and secure transportation. We have new safety policies for our “on tour” experience, there is more advance communication between the guide and client, more stringent cleaning measures for vehicles, information on sights that require masks, etc. We have been closely monitoring every tour post-COVID-19. 

What is your strategy going forward?

We have shifted our focus to domestic trips for the short-term. In a recent survey of our clients, 41 percent said they would take a tour to explore their own city. Our typical client is affluent and retired, historically most were Americans travelling to Europe, and now we are definitely seeing heightened interest in travel around the U.S. We’ve changed to a completely flexible cancellation policy, which is helping give clients the confidence to book future trips.  We don’t expect much sales for the remainder of 2020 but hope robust business returns in 2021.

How far out should advisors book?

Everything is more flexible at the moment, but prior to COVID-19, the ideal booking window was about 45 days out, which allows time for really special itineraries to be put together. 

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