Showaround: Disrupting the Industry of City Tours


City tours are a great way to discover new places. However, often the tours only visit the touristic places and can feel somewhat generic. To be able to experience the more authentic feeling of a city, local guides are a perfect solution. Though, finding these locals may be a hurdle and therefore Showaround is here to help you out!

“There’s is no reason to be just a mere tourist anymore, not when locals can show you an edgier, more beautiful and more authentic version of their city.” – Showaround

What is Showaround?

Showaround is a platform which connects local guides with tourists in 198 countries and 7202 cities. Showaround was launched in June 2015 by Linas Sablosvskis and currently 75744 guides are signed up.

Locals have a profile with their interests, spoken languages, hourly rate, reviews and feedback from tourists. As a tourist, you are able to find guides based on the city you are visiting. Another option for tourists is to ‘create a trip’, on which locals are able to respond with an offer.

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When the guide has accepted the offer, the tourist pays Showaround and you can message your guide via the platform’s messaging system, to tailor the tour. The money will only be transferred to the guides, when there are no complaints. Also, they provide a money-back guarantee to the tourists.

How does the business model work?

Showaround is able to make revenue from these tours, by imposing an 18% commission on each tour, paid by the guides. This 18% covers the costs they incur, which include support, platform management services and promotion.

The cross-side network effects are important in this business model, since the value to a tourist depends on the number of guides and vice versa (Granados et al., 2008). This is beneficial for Showaround, since they also have two competitors who offer similar services with less guides, Tours by Locals and Shiroube. Furthermore, this network effect raises barriers to entry, because of the users that have no incentive to leave (Granados et al., 2008).

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Efficiency criteria

One of the problems, which can be found in any ‘gig’ model, is that the guides are not employed directly by Showaround. This excludes them from employment rights, such as right to a minimum wage, breaks and restricted working time and a pension scheme (McIlroy, 2016). Until the law is able to catch up, Showaround should consider who is working for them and how they are treated.

However, it is clear that there is joint profitability for both consumers and Showaround. Tourists are able to experience the city in a tailored and authentic manner, for little costs and are able to choose from many guides. Locals are able to flexibly make some extra money, share their passion and make new international friends. On the other hand, the firm does not require any assets, except for the platform, and therefore incurs little costs.

Showaround might be your solution to experience a new city in an authentic way!

References

Granados, N. F., Kauffman, R. J., & King, B. (2008). How has electronic travel distribution been transformed? A test of the theory of newly vulnerable markets. Journal of Management Information Systems25(2), 73-96.

McIlroy, E. (2016, March 18) Comment: ‘Gig economy’ – stretching blurred lines of employment to the limit. Retrieved from <http://www.dailyrecord.co.uk/business/business-opinion/comment-gig-economy-stretching-blurred-7578540#0XA5wrgGAYSgODIr.97&gt;.

 

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