Ep. 45 — What is the mission of Toursbylocals? With CEO Paul Melhus

In this inspirational episode, Paul Melhus, the founder of Toursbylocals sat down with Tourpreneur Host Shane Whaley, and shared more about the mission of Toursbylocals

Paul tells us how he was inspired to start Toursbylocals following a visit to the Great Wall of China where he enjoyed a tour by locals (who then tried selling them keepsakes in exchange.)

Paul Melhus takes us on a journey from that flight home to growing a network of just over 4,000 tour guides in 923 locations in 160 countries around the world.

We also learn how Toursbylocals vet all their tour guides, how they market their tours and why they won’t take on new tour guides unless they feel confident they can deliver bookings.

This episode and interview of Tourpreneur@Arival is presented by Checkfront. The booking platform trusted by over 5,000 tour and activity operators around the world. You can start your own free 21-day trial over at Checkfront.com.

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Links and Resources Mentioned on This Episode of Tourpreneur – the podcast for tour operators.

Interview with Paul Melhus, Founder of Toursbylocals. Full transcript.

Shane Whaley:                   And welcome to Tourpreneur at Arival, presented by Checkfront. Today we are joined by Paul Melhus of ToursByLocals. How are you?

Paul Melhus:                        I’m doing well, thanks.

Shane Whaley:                   Excellent. Thank you for joining us today. So I see your company name, I see your social media out there quite a lot, but I am not too aware of what you do. Could you share with our listeners what is it that ToursByLocals does?

Paul Melhus:                        Okay. Our mission is to create private tours everywhere people travel. So we have a network of just over 4,000 tour guides in 923 locations in 160 countries around the world.

Shane Whaley:                   Wow. 160?

Paul Melhus:                        Yes, that’s what we’re at. We feel we’re a perhaps a third of the way there, that eventually when we’re finished, we’ll end up with somewhere in the range of 3,500 locations. That seems to be the universe of where people want to have tours.

Shane Whaley:                   Yes. And how did this all get started?

Paul Melhus:                        The idea for the company was, it began in 2006 with a trip that myself and Dave Vincent, the technical guru of ToursByLocals. We took a trip to Beijing, it was our last day and we hadn’t been to the Great Wall, which of course is a must see there.

Shane Whaley:                   Yeah.

Paul Melhus:                        So rather than go to the close in one, which is the tour bus Disney version of the Great Wall, we hired a driver to take us out to Simatai two hours North of Beijing. And while we were there, we passed a group of about 20 Chinese ladies and two of them followed us and started giving us this impromptu tour, which was really good. But there was always this undercurrent of why are they doing this? What’s in it for them? And so after a couple of hours, when it was time for us to go to the airport, they brought out all of their chachkas and books and cards and everything.

Shane Whaley:                   Right.

Paul Melhus:                        And I guess we bought a few things, but on the plane we talked about how this was not as satisfying an experience as it could have been, both for us and for them. So over the course of two years, we came up with the idea for ToursByLocals. And we launched in October of 2008, which if you’ll recall was one month after Lehman Brothers crashed the world, so.

Shane Whaley:                   Yeah. Yeah, that must have been rough. You thought, because you’d experienced this yourself having a tour by a local, what made you then think, “Well actually there’s a business.” That there would be a demand for this?

Paul Melhus:                        Well the whole company basically revolves around my conceit that I have a certain way of traveling and that other people might share that. But of course, the basic problem of ToursByLocals is how do you get started? Because there’s no guides, so why would travelers come? There’s no travelers, why would guides bother signing up?

Paul Melhus:                        I knew in my heart that there is a market for tour guides. I mean people have been hiring them for the past five, six, 10,000 years. So it’s not like a fad that’s going to go away. And we wanted to try and professionalize the business and make it so that those two women in Beijing could put themselves out to the world in a professional way. And then travelers like myself who wanted that more authentic local experience would have a platform to discover them and book them and get rid of all of the kind of friction points that make it hard to actually connect in a real way with a local person.

Shane Whaley:                   We have a lot of people listening to Tourpreneur who are what I call “Tourpreneurs-in-waiting.” They either want to launch their own tour business or they want to become a tour guide. And what I hear from you is, “Let’s say for instance I want to run a walking tour in the state of Maine.” What would they need to do to be able to work with you?

Paul Melhus:                        Well, we have a team down in Buenos Aires that’s tasked with recruiting, onboarding, and supporting all of our tour guides. Most of our new guides come through signing up on the website, referrals, or hearing about us through social media, various ways that we’re reaching out to guides. One of the principals though that we have with respect to tour guides is that we don’t take on a new one unless we’re sure that we can support them and give them a meaningful amount of business in the course of a year.

Paul Melhus:                        So we’ve got a lot of guides, say for example in Rome or Paris who are I’m sure great guides and perfectly fine in that regard. But if we don’t think that we’re going to be able to deliver them a sufficient number of tours per year, then we won’t … we’ll put them “awaiting opening,” we call it. And then as our business grows, because we are growing quite quickly. And people retire or they change professions or sometimes they’re not giving the great experience to the customers and we’ll decide to part ways.

Paul Melhus:                        So there are always openings in pretty well all areas. But you mentioned Maine, actually that would be an area where we would like to be. And I think we have somebody in Bangor but that’s a place that you-

Shane Whaley:                   Yeah. I just picked Maine randomly because I imagine in New York and San Francisco, you get quite a lot of demand from people there.

Paul Melhus:                        Oh, yeah, for sure. But actually Maine is popular in the fall, when the cruise ships go from Montreal down to New York and they have a couple of stops along the way in Maine, so.

Shane Whaley:                   Sure. And how’d do you go about quality testing guides that sign up with you?

Paul Melhus:                        Yeah, that’s a big part of the value that we give to customers because we want ToursByLocals to be a source for vetted people that are going to do what they say and deliver that awesome experience that everybody wants.

Paul Melhus:                        So firstly, we ask them to provide us with two references. We run them, every guide, through a database called World-Check. So it screens them against all kinds of Interpol and OFAC sanctions, make sure that they’re quality people from that point of view. And then we phone the two references. We do an interview process, we have a kind of cultural fit test that we ask them to do and explain what our principles are and get their agreement to do that.

Paul Melhus:                        We’re checking their licenses now, if that’s required, and it is in many places in Europe. And then we have a whole process of onboarding and supporting and making them comfortable with the product.

Shane Whaley:                   So how do you then … I mean, I’m pleased to hear that you’re very thorough with your quality assurance there and your quality testing. My next question is, you’re up against some pretty big beasts when it comes to the big OTAs, who are spending a lot of money on AdWords for their tours. How do you promote Toursbylocals?

Paul Melhus:                        Oh, sure. Yeah. Well, we’re not really for those kind of tour operators. We’re for the individual entrepreneurs.

Shane Whaley:                   Yeah. That’s just, yeah, I’ll just clarify. So if I’m looking for that tour in Maine and I go with Google and-

Paul Melhus:                        Oh, how are you going to-

Shane Whaley:                   … How do I find your company?

Paul Melhus:                        Well-

Shane Whaley:                   As opposed to a TripAdvisor or GetYourGuide.

Paul Melhus:                        Yeah, we do spend a lot of money on AdWords as well.

Shane Whaley:                   Right.

Paul Melhus:                        But yeah, definitely customer acquisition is the biggest challenge that we face. So we work with the guide to help them craft their profiles so that it will come up in organic search results. Some of the key words, like “Maine private guide,” those kinds of keywords are not as competitive as “Rome tour” for example.

Shane Whaley:                   Right. Yes.

Paul Melhus:                        So yeah, that would be a really hard one to compete against. But for the term “Rome private tour,” any name of place, “private tour,” we are already serving up 95% of the available impressions on Google.

Shane Whaley:                   Wow.

Paul Melhus:                        So yeah, my Amex bill, which we charge our Google AdWords on is pretty hefty every month. Yeah.

Shane Whaley:                   I can imagine. I can imagine. And then online bookings, are you working with a booking platform provider or a software company? How does that work?

Paul Melhus:                        No, we’ve developed our own.

Shane Whaley:                   Oh, wow.

Paul Melhus:                        Yeah. So we have our own system that serves our needs.

Shane Whaley:                   Oh, was that because you felt that the software that was out there wasn’t going to be covering everything that you needed or do you just feel like you wanted to run that in-house?

Paul Melhus:                        Well, we are pretty much control freaks in that regard.

Shane Whaley:                   Okay.

Paul Melhus:                        But in 2008 there really wasn’t … Or, well, when we started in 2006, and we were developing the product through 2006, 2007, there wasn’t a lot of people out there that were offering this kind of tours and activities booking product.

Shane Whaley:                   Yeah, very true.

Paul Melhus:                        So kind of had to develop our own and we’ve just maintained it ever since.

Shane Whaley:                   Sure. And my final question for today, because I’d love to invite you back on, I’ve got a million questions in my head that I’d love to ask you. What’s the best piece of advice anyone has ever given you when it comes to business?

Paul Melhus:                        Trust your gut.

Shane Whaley:                   Yeah, I like that one. Thank you very much for coming on the show. And your website is?

Paul Melhus:                        Toursbylocals.com.

Shane Whaley:                   Fantastic. Thank you.

Paul Melhus:                        Great. Thanks, man.

Speaker 2:                              Thanks for listening to the Tourpreneur Podcast Be sure to visit Tourpreneur.com to join the conversation and access the show notes, including links to the resources mentioned on today’s episode. This is Tourpreneur.