From dreaming to doing, starting a tour company from the ground up can be one of the most rewarding ventures you’ll ever embark on. Not to mention the most challenging. Transforming your passion and stories into tours that captivate your audience requires more than just creativity. It demands strategic planning and an understanding of the market you want to break into.
Back in 2022, in the State of Tours, Activities & Attractions report, Arival projected that the global tours and activities industry would reach $183 billion by this year, and operators surveyed in 2024 were overall optimistic about their prospects.
So what’s stopping you from getting started on turning your passion into profit?
In this guide, you’ll find invaluable tips, perspectives, and reflections from tour operators and industry veterans on how to start a tour company. This walkthrough will help you navigate this exciting journey as you start a tour business, and what it takes to be successful. The good news: Don’t be too worried about getting in the weeds of how to become a tour operator just yet. It all starts with a genuine love for what you do.
Understanding the Tour Business Landscape
The tourism landscape is an exciting place to start a tour business. It’s a complex and diverse landscape, but travelers — your potential customers — are not interested in everything being the same. In that complexity and diversity is the opportunity for you to find a way to earn a living doing what you love.
Identify Your Niche
The first step to starting a successful tour company is identifying your niche. This means finding a specific area or theme that you are passionate about and knowledgeable in. Whether it’s food tours, historical walks, adventure excursions, or cultural experiences, your point of view and storytelling in that category will set you apart from the competition, especially as travelers are seeking out memorable tourism experiences now more than ever.
“I don’t think people should be thinking about trends because I think the trend is that there’s an audience for just about everything now,” according to TripSchool co-founder Mitch Bach. “Now with digital marketing, you can connect with a niche, as well as be as interesting or obscure as you want to be. I think it’s the best time to be in this industry because twenty years ago you probably had to build more generic products for more general audiences and now you can build full businesses and happy lives by being as unique and interesting as you want yourself to be in the world.”
Understand Your Market
Before launching your tour company, it’s crucial to understand your target market. Who are your ideal customers? What are their interests and preferences? Conducting market research will provide you with insights into the demographics and even the psychographics of your potential clients.
You can use simple techniques to get this valuable data. Send your tour scripts to a group of friends, and ask them for constructive feedback. Set up a Google or Zapier survey via a form and send it to community groups you belong to. Look at reviews of similar tours on platforms like TripAdvisor, Yelp, and Google Reviews. Identify common themes in customer feedback to understand what people enjoy and what they don’t. Explore the latest Arival consumer research to find out what travelers are prioritizing and looking for.
Be prepared: It can sometimes lead to you having to adjust your format to reach the audience you want to serve. “The most challenging aspect of starting my own tour company has been removing my bias and trying to see things through the lens of my guests,” reflects Eric Curry, who started his eponymous tour company in 2021 to tell native tales and history of San Francisco. “I think that when you find the balance between the things that interest your guests and what you are passionate about is when you will find success in your business.”
For those still deciding where to land, look to what travelers want: authentic, immersive, and bookable online. Further, eco-friendly and sustainable travel options are still increasingly popular, especially among Millennials and Gen Z travelers. Tailoring your tours to meet these demands can set you on the path to success.
Develop a Solid Business Plan
A comprehensive business plan is essential for any new business, and a tour company is no exception. Your business plan should outline your company’s mission, target market, marketing strategy, financial projections, and operational plan. This document will serve as your roadmap and help you stay focused on your goals.
Take the time to detail every aspect of your business, from pricing models to staffing needs, to ensure you’re well-prepared for the challenges ahead. According to a recent Skift report, venture capital investment in the travel industry hit a decade low in 2023, but recovery is imminent. Ensuring you are set up for success in the case you need to raise funding is crucial to staying ahead.
However, there’s also something to say for just getting out there and getting started. “You can put up your own mental roadblocks and think because it’s safer to remain theoretical,” Bach said. “And when you’re starting a tour business things can get real very quickly. You can put up a website with some copy about you and a tour experience. Even if you don’t have everything figured out, you can start selling it even as you’re figuring out all of the other pieces of the business.”
Operator Takeaways:
- Be bold, tell a unique story.
- Use feedback from friends, surveys, and user reviews on similar offerings to refine your scripts and itineraries, and align them with customer interests.
- Pinpoint what it means for you to offer authentic and immersive elements of a tour.
- Don’t try to compete in oversaturated areas of your market. Innovate, don’t replicate.
- Take action and start selling your tours even as you refine your business model.
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Legal and Practical Foundations
You’ve got the vision, you outlined a plan, and now what? It’s time to set up a legitimate business entity.
There are a series of legal and administrative steps necessary to launch a tour business. For starters you will need to register your business and obtain the necessary insurance.
Register Your Business
The process of registering your business may differ depending on where you are located. Your national, provincial, regional or state authority should provide guidance on how to register a business in your location and understand the regulations governing tour operations in your local region.
There are also different structures to consider. While most operators start out with sole proprietorship or as a limited liability company (LLC), there may be more to consider depending on your business goals, from registering as a cooperative to even franchising your business.
If you’re unsure where to start, look to your local tourism board or destination management organization (DMO) for guidance. You can also tap the tour operator community for advice — connect with fellow operators on LinkedIn, at an upcoming Arival event, and even on places like Reddit.
Secure Liability Insurance
Running a tour company requires various licenses and permits, depending on your location and the nature of your tours. It’s crucial to research the legal requirements in your area and ensure you comply with all regulations. This might include business licenses, special permits for certain types of tours, and insurance coverage.
Choosing the right insurance coverage involves assessing your business risks, considering your budget, and understanding policy exclusions and limitations. Partnering with a reliable insurance provider familiar with the travel industry is crucial for ensuring comprehensive protection for your tour company.
Depending on your needs, you may require other types of insurance in addition to liability insurance, such as property damage coverage, business interruption insurance, commercial auto insurance, and so on.
Learn more here about which tour operator insurance is right for you. If you’re a U.S.-based operator, be sure to look into this specially tailored for tour operators product: Arival ProShield Insurance.
Operator Takeaways:
- To make your idea a reality, start by registering your business!
- Familiarize yourself with the regulations governing tour operations in your local region.
- Get protected: ensure you have the appropriate insurance in place before you begin operating tours.
Preparing for Operations
The success of your tour company hinges on the quality of the experiences you offer. Your tours should be engaging, informative, and memorable. This requires thorough research, meticulous planning, and a deep understanding of your subject matter.
It also takes a commitment to best practices and establishing processes to keep you organized. Here are just a few ways to get started on creating a well-oiled tour operations machine.
Hiring and Training Tour Guides
For many tour operators, it’s the ability to connect with guests that brings them the most joy in running a tour company.
“A great tour experience is only possible when you are connecting with guests on a truly human level,” says Michaela Gonzales, founder of Mick’s Bootique Tours. “People travel because they want to understand the world. Yes, they want to see the big-ticket items and be entertained, but they also want to explore and have authentic local experiences. Guides can help them by being welcoming, honest, and genuinely interested in guests enough that they can cater the experience to them.”
Mick’s Bootique Tours founder, Michaela Gonzales, leads the Walk with Spirits, A Haunted Pub Crawl in San Francisco, and tours in Dublin, Ireland. I Photo: Mick’s Bootique Tours
It’s one thing to connect with guests when you run the tours yourself. But how do you ensure you are achieving this kind of connection on tour consistently, regardless of who is guiding each tour?
You need to build a business that isn’t totally dependent on you.
“You need to be designing something that could be delivered by somebody else,” Bach advises. “But it really comes back to doing that work on what is your why and what are you about, even a simple three words that come to mind, the anchor points. It’s about the brand story, and the story you are telling yourself. Once you get that clear it becomes much easier to understand who the right guide is, the right operations manager for your business, and so on.”
Learn more about tour guide training here. Arival Insider Pro Access members can also learn more about hiring great tour guides in this on-demand video on The Secrets of Hiring, Training & Retaining Guides.
Setting Up a Booking System
With travelers increasingly booking online and on mobile, setting up an efficient online booking system is crucial for the success of your tour company. A robust booking system not only streamlines your operations but also enhances the customer experience, ensuring seamless reservations, less booking errors, and increased sales.
Consider booking software — also known as reservation systems, “res-tech,” or ticketing software — specifically designed for tour operators, such as Fareharbor, Rezdy and Bókun: see a longer list of examples of tour operator booking software here. Many of these platforms offer tailored features like integrations with online resellers, support for custom and dynamic pricing, and the ability to handle complex itineraries.
Key Features to Look For:
- User-Friendly Interface: Your booking software should be intuitive and easy to navigate for both customers and staff. A clear, straightforward process reduces the likelihood of booking abandonment.
- Real-Time Availability: Ensure your system updates availability in real-time to prevent double bookings and provide accurate information to customers.
- Secure Payment Processing: Integrated payment gateways should offer secure transactions, giving customers confidence in their purchases.
- Mobile Compatibility: With the rise of mobile bookings, your system must be optimized for smartphones and tablets to cater to on-the-go travelers.
- Integration with Other Tools: Look for a system that integrates with your website, accounting software, and marketing tools to streamline operations and data management.
Check out our Arival Guide on How to Choose a Booking System to learn more. Arival Insider Pro members can also access checklists to help with this process.
Pricing Models:
The pricing structure of a booking system is an important consideration when deciding which one to work with, and different pricing models can work better for different types of companies. The two most common pricing models are:
- Fee-per-Booking: This model charges a commission on each booking, ideal for smaller operators as it ties costs directly to sales volume. However, different systems have varying payment processing charges and fees.
- Subscription: This model involves a fixed monthly or annual fee, providing predictable costs and often includes more advanced features. It can be more cost-effective for larger operators with higher booking volumes.
The Arival Guide on How to Choose a Booking System breaks down the pricing models and explains the various fees involved. See also our updated Guide to Booking System Pricing for a detailed overview of rates from some of the most popular platforms.
Embrace AI for Efficiency
Embracing AI in your tour business doesn’t mean you need to be a tech expert. There are many user-friendly tools and platforms designed specifically for small and medium-sized tour operators. Start by exploring how AI can help you streamline your admin and operations, so you can focus on how to create more engaging and personalized tour experiences.
If you are a sole proprietor or operating with a lean team, imagine using AI as a virtual marketing assistant that learns about your customers’ preferences. AI can analyze data from previous bookings, social media, and even real-time behavior to offer personalized recommendations that resonate with each traveler.
Check out the Arival Guide to AI in Travel Experiences. Arival Insider Pro Access members can dig deeper on real-world examples of how AI is being used in travel experience companies with AI in Experiences: Case Studies in Emerging Tech.
Operator Takeaways:
- Build a business that isn’t dependent solely on you; focus on clear brand stories to guide hiring excellent tour guides, and provide them with ample training to carry out your vision.
- Ensure your booking software is user-friendly, real-time, secure, mobile-compatible, and integrates with other tools.
- Consider how AI can help you streamline your operations.
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Launching Your Tour Business: Transitioning from Passion to Profit
As you embark on the exciting journey of starting your own tour business, remember that the key to success lies in balancing passion with strategic planning. Embrace the challenges, stay committed to continuous improvement, and let your unique perspective shine. With dedication, creativity, and the right strategies, you can build a thriving tour business that captivates travelers and stands out in the ever-evolving market.
Now that you know how to start a tour business, it’s time to take the first step—transform your passion into profit and start creating unforgettable experiences for your guests.
About the Author
Kate Cornell is an editorial and digital strategist with many years of experience in the experiences sector of travel, and has spoken at Arival on the topics of writing tour descriptions, and the “content conundrum.” She has led global editorial teams for travel brands including Viator and Tripadvisor, helped build startups such as TourismSolved, and worked behind the scenes as a content consultant for leading travel and luxury brands.
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Header photo: Ivana Cajina / Unsplash
