The Quest for Service-Level Tiers in Tours & Experiences

How one operator has implemented service-level tiers for their tours to serve distinct customer segments: a preview of a featured Arival 360 | Berlin session

Reading Time: 5 minutes 30 seconds

Three stars, four stars, economy, first class… we all know what these terms mean in hotels and transportation, but what about tours, activities and experiences? Young backpackers on a budget, families traveling with children, and luxury travelers seeking an elevated experience all likely have different needs and expectations, but too often they end up on the same tour bus. 

In the “things to do” space, “five stars” might mean a tour or experience is highly reviewed, but that doesn’t necessarily mean it’s for everyone. The lack of consistent, commonly understood service-level standards creates confusion for consumers and missed opportunities for tour and activity providers, leading one operator to implement service level tiers for their tour offerings.

In a featured theater session at Arival 360 | Berlin, Founder and CEO of TripGuru Sebastian Renzacci will share his experience of building a multi-destination tour operator across Asia with distinct service-level tiers, and how this improves customer satisfaction, increases revenue and builds brand loyalty. 


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The Journey to Tiered Service: Identifying the Problem

From one tour guide in Bali in 2017, TripGuru has grown to over 2,000 guides and drivers offering over 150 tours daily in 20 cities, primarily in Southeast Asia. TripGuru went from hosting 50K customers on tours in 2022 to around 140K in 2023. Renzacci credits a large part of this growth to identifying the opportunity for tiered levels of service, and communicating those service levels clearly to potential customers, as well as to the staff delivering the experiences.

The problem — or opportunity — TripGuru identified had to do with how customers select tours that meet their expectations. In one common case, customers might go to different companies that offer different levels of service. 

“We see a very long tail of operators offering private tours, offering budget tours, offering luxury tours. So from a consumer point of view, they have to basically go to different companies” to get those different levels of service, Renzacci explained. 

The other common issue from the customer perspective is the overwhelming amount of experiences available, and lack of clarity on the service levels offered. For customers who go to an online travel agency (OTA), for example, they might get overwhelmed by the number of tour options available and select one based on price.

“But then they don’t read what they’re getting,” observed Renzacci. “So there’s a mismatch between expectations of the customers and what the tour actually is about, and that leads also to negative reviews.”

TripGuru seeks to match customer expectations with the right service level, which also has a very positive impact on the customer experience, Renzacci said. 

Matching customer expectations with the right service level has a positive impact on the customer experience, TripGuru has found. | Photo: TripGuru

Defining Service-Level Tiers for Experiences

For TripGuru, defining service-level tiers started with identifying the various customer segments and their expectations. For example, solo travelers may be happy to join a shared group and meet other travelers, whereas families traveling together may prefer private groups and more flexibility. Backpackers exploring a destination for the first time will have different expectations — and likely budgets — than those returning for a third or fourth time and looking for a more customized experience.

With these types of customer personas in mind, Renzacci explained, they reverse engineered it to try to create products that would be a good fit for each. 

This resulted in several differentiated service tiers:

  • Shared group tours at set times to set stops
  • Private tours with flexible times to set stops 
  • Private, customizable tours with flexible times and stops

Other service-level options include whether a tour includes the cost of attractions visited or whether or not it includes meals. Backpackers on a tight budget, for example, may prefer to pay for a lower-cost tour with minimal inclusions so they can be selective about which additional things to spend money on.

On the other hand, some travelers may prefer to pay a higher price to have everything included, such as attraction tickets and meals, and some may even want to have control over a variety of options, from what’s included right down to the transportation vehicle and language options.

“If customers are able to find in one page everything that they are craving for, that’s better for conversion,” explained Renzacci. “We have also maximized revenues, and there’s a good opportunity for improving margins, because we start working on more differentiation and move away from the apples-to-apples comparison,” which typically comes down just to price. 

TripGuru offers tours with different levels of service, including the choice of transportation vehicle type | Photo: TripGuru

Growing Sustainably on All Tiers

A core aspect of TripGuru’s strategy, as they expand to new destinations, is sustainability. 

“The travel industry is very beautiful, but specifically for tours and attractions, there’s a lot of impact on the places you visit,” said Renzacci. “We felt like we didn’t want to be part of the problem… we want to drive tourism with a positive change, with a positive impact.” They were recently certified with the Global Sustainable Tourism Council (GSTC). 

As travelers are increasingly conscious of sustainability, particularly travelers from the U.S. and Europe, Renzacci explained that it was important to offer sustainability measures not as something the customer pays extra for, but something that is included at each service tier.

“Rather than make it something we put into our service tier levels, we decided to include it across the board.” As Renzacci explained, they found people want sustainability, but don’t necessarily want to feel like they’re paying more for it. So they include everything into the pricing, and regardless of what service tier a customer chooses, they’re contributing to that positive impact. 

And that positive impact, alongside the service level tiers, has helped TripGuru differentiate themselves in a crowded market. “Competition is not about price,” concluded Renzacci, “it’s about differentiation. It’s about innovation, it’s about creating, adding value… I think that’s a better realm to be competing at than pricing.”

TripGuru has implemented sustainability measures across all service tiers | Photo: TripGuru

Learn More at Arival 360 | Berlin

Join us at Arival 360 | Berlin, where TripGuru’s Sebastian Renzacci will be on the main stage sharing more about service level tiers for tours and experiences, and how other operators can benefit from what TripGuru has learned along the way. We hope to see you there!

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