Friday, May 2, 2008

Free tours as a business model

Two Vandy alums have started a free Washington tour guide business:

Since they started last summer, they have given more than 100 tours, averaging more than 35 people per outing and collecting about $150 from each group. A family of four is often happy to fork over a $20 tip rather than the $15 per person -- or much more -- they might have to pay for a traditional tour.
Predictably, there are lots of barriers to entry, erected by the "professional guides" to keep out competition:

Tour Guide license issued by the Dept. of Consumer Regulatory Affairs in Washington DC :

  • - Category License Fee: $73
  • - Application fee: $35
  • - Endorsement fee $10

Some of the more interesting requirements of licensure include filling out a “Tour Guide Class-B Physician’s Certificate” to be filled out by a physician stating “the applicant is of sound physique, with good eyesight (at least 20/40 with or without correction), and hearing in both ears, not subject to epilepsy, vertigo, or heart trouble; free from any contagious or infectious disease and not a drunkard…”

Also, the “Tour Guide A Basic Business License Fact Sheet” requires that “each applicant shall submit separate personal reference letters from six residents of the D.C. Metropolitan Area …”

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