Start & Run a Tour Guiding Business - Barbara Braidwood, Susan Boyce & Richard Cropp Start & Run Business Series

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to your income, but they are unreliable. One group may tip lavishly, the next give nothing at all, and certain groups simply do not ever tip. Students, for example, are usually on a tight budget themselves, and some cultures consider tipping unnecessary or insulting.

      Another factor to consider is the seasonal nature of tour guiding. Only 20 percent of tour guides or tour directors work full time, year-round. For others, 150 days in a year would be considered a heavy work schedule. Regardless of location, the main tour season runs from May to October, ideal for people who want to pursue other interests or kick back and relax for six months out of the year. Some typical winter jobs are ski instructor, student, semi-retired go-getter, and artist.

      Bill Newton, cofounder of the International Tour Management Institute (ITMI), has found that many of the best tour guides and directors are the ones who integrate tour management with other pursuits. “If you’re doing this year-round,” he says, “it often becomes just another job. The ones who pursue other interests as well do this because they love the work. That makes them much better guides than people who are doing it only to make the payments.”

      6.2 Contracts

      Written contracts for freelancers are surprisingly uncommon. Most tour directors and guides are hired verbally on the basis of their résumé and a personal interview. It is not unheard of for someone with experience and good references to get the job after only a phone interview.

      7. Occupational Standards

      7.1 Canada

      In early 1996, the Canadian tour industry ratified a set of voluntary national standards. Long-term professionals in the industry established minimum proficiency levels in all areas of tour guiding and tour directing. The standards are divided into three sections:

      (a) Core skills

      (b) Tour director

      (c) Tour guide

      Maureen Wright of the Pacific Rim Institute of Tourism (PRIT) in Vancouver, British Columbia, one of many people who worked on setting the standards, believes they will be invaluable for self-regulation within the industry, could become key components for training and educational purposes, and will provide a solid basis for job descriptions. Copies of the standards are available from PRIT for CDN$25 each or CDN$75 for all three sections. Write to:

       Pacific Rim Institute of Tourism

      Box 12101

      930 - 555 W. Hastings Street

      Vancouver, BC V6B 4N6

      Tel: (604) 682-8000

      Fax: (604) 688-2554

      PRIT also began a testing/certification program in 1996 which will recognize qualified guides. The test involves a written exam (15 percent Canadian knowledge, 25 percent provincial knowledge, 65 percent local knowledge) and an on-site assessment by an independent evaluator who goes on tour with the applicant. This pilot project could ultimately be used to certify local guides in all major centers across the country.

      Montreal and Quebec City are, at present, the only cities in Canada with formal regulations for tour professionals. Both cities require local tour guides to be licensed, and impose fines for violation.

      7.2 United States

      There are no formal federal or state regulations governing tour directors in the United States. However, local guides in Washington (DC), New Orleans, and New York City must be licensed.

      7.3 Europe

      Most European countries regulate tour guides and tour directors. In many places, there are heavy fines for anyone — foreign or local — caught conducting a tour without the appropriate certification.

      4

      Meet The Players

      Whether you are putting together your own tours, guiding tours for someone else, or starting a tour company, you will need to know the players in the travel industry. Knowing what goes on behind the scenes will put you in a better position to solve problems when they arise and give you some understanding of what your employer deals with. And of course, if you are running your own tours, this information is essential.

      1. The travel suppliers

      A travel supplier is any company or person selling a travel product. Airlines offer airline seats, travel insurers offer travel insurance, and tour guides offer escort services. But as you will see, definitions are flexible and it is not uncommon to find one company acting as several different kinds of supplier. A tour operator may also be a retail travel agency as well as a wholesaler of airline tickets or a consolidator, all under one roof! When you are designing your own tours, you may deal with a number of these suppliers individually or choose to work through an existing tour operator who offers an already assembled package.

      1.1 Airlines

      Airlines come in all sizes and use a multitude of equipment. Some, such as the national airlines and megacarriers, serve hundreds of locations, are well known, and maintain their own sales staff to sell directly to the public. Good examples are American Airlines or Air Canada. Some large airlines do not sell to the public at all, but charter their planes to other companies that in turn sell seats to tour operators, travel agencies, and the public. They receive little public recognition, but these charter airlines have a major impact on seat availability, especially to popular destinations during peak times (e.g., to Europe during the summer months or to hot spots during the winter).

      Most airlines selling through tour operators and agencies adhere to the rules and regulations of the International Air Transport Association (IATA), which governs everything from commission rates to ticketing restrictions. Typically, airlines pay a commission to the tour operator or travel agency that sells tickets on its flights. Commissions for selling tickets start at 5 percent with a cap on the maximum amount you can earn that varies for domestic and international tickets. Be aware that there are many exceptions. As well, airlines are notorious for changing commission rates. You may find a profitable tour is suddenly no longer worth the effort because the airline changed its commission structure overnight. Keep current.

      Some airlines (particularly charter companies) use net pricing, a method of selling in which the airline acts as a wholesaler, setting a ticket price for an intermediate buyer (a tour operator or travel agency, not the general public). The buyer then sells the ticket for whatever price the market will bear or packages the ticket with one or more other travel products and resells this package to the public after adding a profit. In the end, a tour operator will earn about the same amount from commissions or net pricing.

      Airlines also pay higher incentive commissions, called overrides, if an agency’s volume is high enough or if it belongs to a consortium (a group of agencies acting as one high-volume buyer to get higher commission rates). Usually overrides are on a sliding scale and open to negotiation. They are also subject to sudden termination or modifications as market conditions change.

      If you are an independent contractor running someone else’s tour, you probably will not know what kind of commission your company gets. However, when you put your own tours together, the rate of commission will be all-important when you decide what price to charge for the tour package. You must be sure you are making enough per ticket to cover all your expenses and still make a profit. If you are putting together your own tours through a travel agency, the override commission rate is something you should take into consideration when you are selecting an agency to work with (for more on this, see chapter 11). Overrides allow you to make a little extra money to compensate for other elements of your tour that may not generate much cash.

      1.2

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