Boost Your Tour Business Profits with Trip Protection
This is the first of our series on boosting profits in your tour business. Check out the next video in the series here or binge the whole series here!
Boosting profits doesn’t have to come at the expense of your time or your guests’ experience. In fact, there are ways to boost profits that take little to no time and help your guests feel more comfortable and excited about booking their tour with you.
One solution is offering Trip Protection with every booking. This optional upgrade can be a game-changer for your tour business, offering a significant revenue stream with minimal effort.
What is Trip Protection?
Trip Protection is an optional upgrade that you can offer your customers during the checkout process. It provides them with a more flexible cancellation policy, such as a full refund up to an hour before the tour starts. This added peace of mind can be incredibly appealing to customers who are more risk-averse or have a higher chance of changing their plans.
The best part? As the tour operator, you have complete control over the structure of this optional upgrade. Think of it as an enhancement to your existing cancellation policy, tailored to meet the needs of your customers.
Why Trip Protection is a Win-Win
Data from booking software companies shows that when Trip Protection is implemented properly, refund and cancellation rates don’t increase. This means that the majority of people who purchase this extra often won’t end up using it, allowing you to keep the extra revenue.
Trip Protection provides your customers with more flexibility and peace of mind, knowing that they’re covered if their plans change. At the same time, it gives you a nice additional revenue stream to boost your bottom line. It’s a win-win situation for everyone involved.
Real-World Example: Kailani Tours
Kailani Tours, one of our coaching members based on the Big Island of Hawaii, offers an excellent example of how to implement Trip Protection effectively. On their volcano explorer daytime tour, customers can easily add Trip Protection during the checkout process.
The language used is clear and concise, stating that purchasing “Trip Protection allows you to cancel or reschedule your tour at any time, for any reason, up to one hour prior to trip departure.” This transparency is key to building trust with your customers and ensuring they understand the value of the upgrade.
Best Practices for Boosting Profits with Trip Protection
1. Use a 15% fee structure: Data from Fareharbor shows that charging up to 15% of the total cart value or per-ticket price is the sweet spot for maximizing adoption without deterring customers.
2. Be transparent: Clearly present Trip Protection as an optional upgrade to your existing cancellation policy. Include information on your tour sales page and in your FAQs.
3. Consider stricter cancellation policies: By making your existing cancellation policy more strict, you can increase the perceived value of Trip Protection.
4. Test opt-in vs. opt-out: Experiment with having Trip Protection selected by default (opt-out) or requiring customers to actively select it (opt-in). Monitor customer feedback and adoption rates to find the right balance.
5. Actively sell the add-on: Use language like “highly recommended” and consider adding customer testimonials to highlight the value of Trip Protection.
The Potential Impact on Your Bottom Line
Let’s run some numbers to illustrate the potential impact of Trip Protection on your business. Suppose you have a tour company with an average ticket price of $50 and 10,000 customers per season. If you charge a 15% fee for Trip Protection and have a conservative adoption rate of 5%, you could earn an extra $4,000 in what is essentially pure profit.
Some tour businesses in our coaching program that are doing over a million a year in direct sales have reported earning over $3,000 a month in extra profit just by implementing these best practices. That’s a significant boost to your bottom line without much additional effort!
Why Offer Trip Protection?
Trip Protection is a powerful tool for day tour operators looking to increase their profits while enhancing their customers’ experience. By offering this optional upgrade, you can provide your customers with more flexibility and peace of mind while generating a substantial additional revenue stream.
Remember to approach Trip Protection from a place of service, balancing the value offered to your guests with your own desire to grow your profit margins. With the right implementation and best practices, Trip Protection can be a powerful profit booster for your tour business.
Want some more insider tips to earn more profit in your tour business? Let’s talk! Book a free strategy call with one of our tour business coaches today!
