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Sunday, October 26, 2008

Tipping the scales on this economy

Amidst this financial crisis across the country, the no-brainer response to the “how are your tips on tour?” question I am asked by many Tour Pros is supposed to be something like, “Well, we’re all feeling the pinch, how do you think the tips are?”

However, an analysis of my 2008 tour gratuities suggests the exact opposite is actually the truth.

Really.

And, I may have the surprising but simple answer as to why this is the case.

Let me explain.

This is my fifth full season on the road. In my first year on tour (2004), as I literally “got my feet wet” in the industry, I worked long days for not a whole lot of salary OR gratuities. We’ve all been there. I told myself I’m in it to get experience, build relationships with other Tour Pros and TOs, and learn the way of the road. Because 17 of my 18 tours that season were student tours, it’s hard to analyze the average passenger tour gratuity since student tours aren’t known for their gratuity totals. So, with that in mind, I took time to review my last four seasons in which I have completed a total of 38 adult tours.

To analyze my adult tour gratuities over a four year span (2005-08), I divided my weekly gratuity average by the average number of passengers per week. In 2005, my average adult passenger offered a $33 gratuity at tour’s end (my adult tours are always eight days in length). My average tip jumped to $39 per passenger in 2006, and then dipped down to $33, again, last year. However, in 2008, the average adult gratuity by tour’s end was $41. Compared to last year, that would mean an extra $360 a week.

As the fiscal crisis really started to take shape in September and October this year, most Tour Pros and drivers figured we’d get slammed on the amount of gratuities we’d collect. However, at least for me, I have not seen that happen. Why? Let me tell you my theory.

I work for an adult tour operator that many folks would consider a “budget” tour operator. For example, compared to our closest competitor, our Fall Foliage tour comes in at about 50% of the cost of theirs. Therefore, it’s fair to say, one would probably expect our passenger numbers and gratuities to tumble in an unsteady economy. However, just the opposite has occurred. In fact, while we’ve seen tangible proof of our competitors canceling tours both out West and throughout New England, our numbers of passengers and tour departures have skyrocketed.

While the economy has certainly cost us some of our passengers, I believe we’ve benefited by getting former passengers of higher-end tour operators that don’t want to invest as much as they use to for a tour price. These folks certainly aren’t about to stop traveling, but they are watching their expenditures involved with touring. My adult company’s rock-steady reputation in the business has allowed travelers from higher-end TOs to choose to travel with us as a second-choice, rather than canceling their travel plans altogether. And, with that type of traveler joining us, they come with an expectation (in my mind) of increased gratuity averages over the course of the tour season.

Or, at least, that’s the best I can guess.