I am in travel industry, but i think approaches to all market places are similar, so hope you can give me advise.
I have hard time breaking into top positions on OTAs (trip advisor/viator, getyourguide, airbnb, etc).
I rank higher then other "regular" tour operators (who employ guides), but often loose to self employed operators / "1 man show" operations. They outrank me cause they have more ratings. And the reason for this is they "convert" tours into reviews much better.
Say we do 30x tours a week but have conversion of 20%, and they do 30x tours a week, but have conversion 50% they will outrank us.
In order to remedy this, i was thinking about boosting compensation of my guides even more (in order to attract best guides, cause in the end guides are the product) and created thread that i will quote below. I got advice that "happy guests don't generate revenue; booked tours do." I agree with this, but at the same time I don't see how i can break into top positions on market places when competition have the edge on me in "review converting". At the moment i am outdoing them in PPC and SEO, but loose on marketplaces.
I don’t make much and thinking about paying even more to people I work with.
I run tour operator business, (walking, bicycle, segway, etc tours, picnics, yoga, etc)
Pre-COVID numbers were 350k revenue, 70k profit (I don’t pay myself, so it’s my salary)
Biggest expenses: guides compensation, marketing, web development.
We have good reviews, good team.
Problem with this business is that at the end guides are the product (of course we worked on tours to stand out from competition, routes, scripts, perceived value things like iPads with visuals, T shirts/badges/hats, but at the end at least 70% of guest satisfactions comes from guide's energy, personality, people skills, etc)
So if you want to win long term you have to have best guides, to have best guides you must have best compensation. (of course volume matters too)
I am very attentive to costs, and try to run cost efficient operation, but I am finding it hard to “save” on guides and at the end I am loosing more. Good vs Great tour is difference between referrals, worth of mouth, ranking on OTAs, etc. My team is good, I have 3 “super stars“ whom I consider best in their position, but the rest of the team is only good and I personally know that there are better guides.
My idea is to give up even more compensation to be able to attract best guides, leading to more volume, building efficient low cost operation (saving where i can but not on guides), increasing average number of people on the tour (cause now often only 6 spots of out 12 per tour are sold) and then with time if it works out making $ personally.
Compensation i pay is already highly dependent on guest satisfaction (basically base is minimum, plus bonus if guest is happy, and they get tips), but i want to boost it even more.
I am thinking about following structure: same base rate as right now, but if guest is happy with experience (we ask guests to rate the tour after) then 50% of tickets sold amount for tour.
This way for small groups guides will be making about same money they make now, but for bigger groups up to ~$220 + tips for for walking/bike/yoga tours, up to ~$300 + tips for more complex tours (segway). Tip per tour very, but on average it’s $25 to $100 total. Tour is about 2 hours.
I think it’s right idea, but the reason I am hesitating is that if I increase compensation I will decrease my max acquisition cost so to speak (google ads, FB ads, etc). But if i don't do that i have feeling that apart from 3 super star guides any guests I bring big % is "wasted" (does not result in word of mouth, reviews on TripAdvisor / FB, etc) cause tour is good but not great.
What would you advise?