In a move that could potentially change the way gratuities are paid in tourism and hospitality forever, Asia Specialist Tour operator Experience Travel Group (ETG) announced that it will introduce an inclusive tip service. This service enables the customer to pay their tip at the time of booking. However, mainstream tour operators could follow suit to provide fair pay to all employees in developing countries while providing a more relaxed holiday experience for their travellers.
A socially responsible alternative
In developing countries, the tourism sector is typically low paid, resulting in tour guides and activity providers relying upon tips to make a living. This necessity can lead to awkward exchanges between tourists and guides at the end of the tour. Occasionally guides can be somewhat pushy in some instances, which can be uncomfortable for tourists. In addition, tourists don’t always carry around cash due to concerns about theft, particularly in developing destinations. Furthermore, certain cultural differences could lead to confusion, with tipping customs varying from one country to the next.
One of the main issues in developing countries is that the day rates for many guides have become static over recent years. This trend looks set to continue in the short term due to the economic effects of the pandemic. In addition, the reduced interest in international tourism has damaged the tourist industry, reducing opportunities to provide tours and earn additional tips.
Inclusive tipping sets out to alleviate some of the adverse effects of tipping at the end of the tour. The traveller pays a set amount before the trip, meaning they know precisely what the overall cost of their holiday is. The tips pre-paid by the traveller will then be given to the tour guides as a set amount and given evenly amongst them (if there are multiple guides). This initiative means that tour guides have more certainty over their income, enabling them to focus entirely on providing a quality tour. Ultimately, this is a fairer system, providing a more reliable and stable income to tour guides while still providing an incentive to provide clients with the best possible experience. It is important to note that, as with any service, if the client is unhappy with the guide or tour, they should request a full refund directly from the tour operator.
Mainstream tour operators could adopt this strategy
This form of tipping could have huge potential moving forwards. Mainstream tour operators can potentially adopt this strategy, mainly where tourism is popular in developing regions such as the Caribbean, Central America and North Africa. Inclusive tipping could be included in the total cost of a package holiday and cover hotel and hospitality staff too, ensuring they receive a fair wage for their work.
Over recent years, customers have become more supportive of sustainable and responsible measures taken by operators. According to GlobalData’s 2021 Q1 consumer survey, 25% said it was essential that products they purchased supported social issues. A further 45% said it was nice to have but not essential. As a result, the service offered by ETG could well set off a brand-new trend within the industry and change the way we pay for tourist services in the long term.
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