Digital tipping technology aimed at tour guides has lagged behind developments in other sectors of travel and hospitality, such as hotels and restaurants.
But a new partnership between a digital tipping software company and a major sightseeing brand is what some industry professionals say is a step in the right direction toward providing tipping solutions for day tour operators in an increasingly cashless world.
City Sightseeing, best known for its double-decker, hop-on/hop-off bus tours, has tapped travel technology company TripAdmit as its official digital tipping partner. The travel tech company now offers its tipping software, TipDirect, to City Sightseeing travelers in more than 100 cities worldwide.
Guides are given a Near-Field Communication-enabled card that's able to collect and distribute tips to the guide. Guests can tip by tapping a credit card, through a QR code or via a direct payment link. In addition to digital tipping, TipDirect also gives travelers the option to leave a review, including the use of ChatGPT in drafting an AI-assisted review.
"The level of inquiries we're getting on a daily basis now has gone up significantly" since partnering with City Sightseeing, said John Maguire, CEO of TripAdmit. "This has already changed our business."
The partnership is significant for TripAdmit and its 11-month-old tipping software, but is also an important advancement, said Mitch Bach, co-founder of TripSchool, a training resource for tour guides and day tour operators.
Tipping practices for guides have long been a fractured landscape, he said, with some using sites like PayPal or other online payments systems but no standardized way for guides to collect gratuities.
"For many years, I've seen guides share a PayPal address at the end of the tour," Bach said. "With the rise of QR codes during the pandemic, I started to see more advanced Linktree-style mobile landing pages with multiple payment options, scannable by a QR code on a business card" or even a guide's T-shirt.
But now, Bach said, travel and financial technology companies see an opportunity in the day tour operator sector, and he expects to see more booking software companies integrate similar features into their own software.
Guides depend on gratuities
New developments in digital tipping methods come at a welcome time for tour guides.
Bach and Maguire said that cashless travelers and those not accustomed to tipping, or with limited ability to use money transfer apps when traveling internationally, can negatively impact guide compensation.
TipDirect works anywhere, Maguire said, without the need to download an app. "For international tourism, guides in Europe can't accept Venmo or cash apps," he said.
In addition, employers factor tipping into tour guide wages. "Tour operators often make their increasingly tight margins by paying their guides a wage that expects a certain amount to come from guest gratuities," Bach said, adding that the practice causes "real wage imbalances, where companies have not increased their pay rates to keep up with inflation, and numbers of guests -- and therefore tips -- fluctuating more than ever."
According to Maguire, guides get better tips when there is a digital option.
"What we know for certain is that earnings are higher for guides by having digital tipping solutions," he said, adding that "tipping forms a significant portion of wages" for tour guides.
Although in recent years there has been growing consumer frustration about tipping in general, which Maguire said is symptomatic of the increased use of digital payment technology, tipping tour guides has long been a standard part of the business, said Douglas Quinby, CEO and co-founder of travel research firm Arival.
"This is very much a service business and always has been," he said, adding that it's up to suppliers to set tipping expectations for travelers. "We've always advocated for operators to try to make it as seamless as possible for their guests to leave a tip or a review, and there are increasingly better tools to facilitate that."