The Evolution of the Tour Operator

Challenges and innovations from 2003 to 2023 and beyond

Twenty years ago, I purchased a failing rafting operator in Scotland. The landscape of multi-day and day tour operations was vastly different back then.

The early 2000s were marked by various challenges and pain points for tour operators, from traditional offline booking methods that did not scale to issues with real-time coordination and a lack of digital presence that meant finding new customers was a hard offline old-fashioned marketing and sales job. The industry has undergone a substantial transformation since then. Today, with the advent of technology and changing customer expectations, new best practices have emerged to address these pain points. Looking ahead, these practices are evolving faster than many operators can keep up with.

In 2003, the reservation process for tours was often cumbersome and time-consuming. Customers had to book their tours through travel agencies that were still mainly paper-based or directly with the operator via phone or fax. Yes, the fax was a big thing back then. I remember getting them from hotels, agents and schools to name a few. This method was prone to errors and often was just the start of a communication train that went on and on.


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Communication was another significant challenge. Today it has improved dramatically but is still far from fixed. Real-time communication is still a pipedream for many tour operators. We may have real-time booking on our websites and out to our retail partners, but how many tour operators can say they have real-time booking of all the transport, accommodation, restaurant and activity partners we use? Back in the day, it was phone calls and fax a plenty and no mobile phones. Today, so much is still done in the supply chain by mobile phones. Real-time updates were non-existent in the early 2000s and, in many ways, still are today throughout the whole supply chain. This can obviously lead to confusion and dissatisfaction when inevitable changes occur.

Digital presence

The customer of today is mobile addicted, and expectations are high. It is not the travel industry that leads on this, it is all the other sectors of society that serve people, from retail to takeaway food. It is online, it is simple, and it delivers in real-time.

The tour operator industry in 2003 lacked a strong digital presence. For many, they had zero online presence as most operators didn’t have websites and those who did often offered limited information. Online marketing was in its infancy, making it harder for operators to reach a wider audience and compete in the global travel marketplace, which was going through rapid growth. I remember being astonished that all the booking confirmations were being sent out by post to the rafting operator I purchased. The reason I was given was that most folks did not have email.  The reality was it was the minority of our guests that did not have email.

Fast forward to today, in 2023, and the tour operator industry has transformed significantly. The advent of technology and the digital revolution have brought forth new best practices that address many of the pain points from 20 years ago.

First, online booking systems, which started to surface around 2005, have streamlined the reservation process. I adopted SaaS reservation technology in 2007 and never looked back. The organizational change to the business was great. It allowed us to expand to several different countries rapidly. It allowed me to see what was happening daily within the business, our operations, marketing and finance in real-time no matter where I was in the world. These reservation systems allow customers to book tours at their convenience, offering real-time availability and automated confirmation. This has significantly reduced booking errors and improved the overall customer experience. They also now allow retail partners to see real-time availability. Back then, the choice was limited to a few software as a service systems, but today tour operators have the choice of a few hundred SaaS systems to help them manage their tour operations.

Communication has become more efficient and instantaneous, thanks to digital platforms. Tour operators can now provide real-time updates via emails, messenger apps, and social media, ensuring that customers, suppliers, and partners are always in the loop. This has come with some pros and cons as customers use a fast range of communication tools now. If operators want to make sure they are addressing their customer’s needs in the best way, they need to be able to communicate via all these different methods in as close to real-time as possible. If tour operators have the resource and are technology friendly, then this is easily done, but for those small operators who are often out-guiding, then this is a struggle. AI chatbots, implemented correctly, are a godsend for small operators as they will enable them to give a 24/7 presence to communicate with potential guests, which, if they are out-guiding, is impossible.

Looking toward the future

Having a robust digital presence has been a must for tour operators for around 10 years now. Websites are not just informational; they are designed for engagement, complete with online booking capabilities, detailed tour information, customer reviews, and vibrant visuals. An outstanding digital presence is no longer optional. It is a requirement to stay in the tour operator industry. Online marketing, too, has become a key strategy, with operators leveraging SEO, social media, and email marketing to reach potential customers and stay engaged with past customers. Customer Relationship Management (CRM) systems are widespread and very affordable or even free. Especially for multi-day tour operators, these systems should be the jewel in your back-end business operations. Customers are expensive to acquire, and in an industry that sufferers greatly from irregular purchases, it is essential to manage the best possible communication across the whole customer journey from dreaming, planning, booking, experiencing and sharing. The very best operators often have repeat bookings happening over many years by ensuring attention to detail is applied to the right people at the right time with the right information.

Looking toward the future, technology will continue to play an even more pivotal role than it does today. The tour operating industry is going to be shaped by society-level changes in how guests use technology. Artificial Intelligence (AI) will streamline operations further. Today the ability to use it to increase productivity is huge. However, that is just stage one and one all tour operators should adopt and adapt quickly. It will make you more productive and save substantial costs and allow you to produce content and information for your costumes at a scale that may be limited resources were preventing you from doing before. AI can be used to personalize customer experiences, from offering recommendations based on past bookings to answering customer queries via chatbots. The strategic value of AI is not the productivity gain but the way it will enable tour operators to interact with customers at scale using the unique data that each individual tour operator possesses. Today that data resides in many documents and processes and in individual owners and guides heads, but that data is a superpower if operators want to deploy AI in a strategic manner that will not only allow them to expand their operations but critically defend against some serious completion that is coming from much bigger technology companies and travel brands.

A tour operator’s unique advantage is in the person-to-person relationships that they nurture and deliver. However, AI technology will also disrupt here as self-guided tours provided by big travel brands guided by digital tour guides start to scale. Tour operators, especially day tour operators, have to be aware of this and start to plan how they can deliver more value going forward. An example would be a hybrid tour with a live guide doing a couple of hours and an AI guide doing a couple of hours.

Virtual Reality (VR) and Augmented Reality (AR) also hold great potential. VR can offer virtual tours, allowing customers to explore destinations before booking. AR, on the other hand, can enhance the actual tour experience, providing interactive information about sites and attractions. These, to date, have not made great inroads into tours, but they have in attractions, and it is only a matter of time before they start to have a bigger impact on the tour industry. High-priced multi-day tours that want to really engage with customers in the dreaming and planning phases of the customer journey should explore how these technologies can help with that.

More sustainable practices are needed

Sustainability is another factor that is expected to influence best practices in the tour operator industry. It may have a more defining impact than technology. Global travel numbers are expected to double by 2050, just 27 short years away, so generating demand for travel is not a challenge the industry faces. It is how we manage that massive demand in a way that serves the planet, the destinations and the people that live in those destinations. As more destinations and the people who live there become aware of the benefits and costs of tourism and its environmental impact, tough industry-changing decisions will be made. We are already seeing the start of this across many cities in the world with new policies restricting tourism numbers. Tour operators will need to adopt more sustainable practices and be able to prove them when requested not just by the travelling public but increasingly by national and local government legislation.

The tour industry has come a long way from 2003 to 2023. The advent of technology and evolving customer expectations have largely been addressed. However, many tour operators still lag in this digital-first world, which is understandable as very few entered the industry to be focused on technology. The challenges that once plagued operators may have technology solutions, but the world does not stand still. As an industry, we are still behind our customers in their use of technology. To thrive, we must do what we can to catch up and deliver on customer expectations, not just on the outstanding experiences that the industry delivers face to face but also in the digital environments that billions of people spend many hours a day in.

As we look ahead, the industry is set to continue its transformation, adopting even more innovative practices to enhance customer experiences and ensure sustainable operations. The journey of the past two decades is a testament to the industry’s resilience and adaptability. We have enjoyed great growth as an industry and recognition as the best part of the overall travel industry. Tours and experiences are why people travel. The changes in the industry over the next 20 years will dwarf the last 20. Most, if not all, of the changes in the last few decades, have been around communication, booking, marketing etc. The next 20 years will see much more of that at hyper speed, but critically the experience product that we all provide is actually going to change in ways that are equally exciting but challenging.

Today is the best possible time to be a tour operator of day or multi-day tours, and for many, both. However, digital awareness and ability are now a must-have if tour operators are going to deliver on the opportunity they have been presented with.

Peter Syme