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For instance, Sandeman's runs free walking tours all over Europe. One or two every day of the year, good local guides, and the only payment is tips at the end. I'm sure the tip money is good since they get good crowds, but that seems like it would support one or two guides at a living wage, not a seemingly professional multi-national organization.

Does anyone have the inside scoop on these operators? Where are they making their money?

(I'm asking because I've found it's always good to know what is motivating people who are giving away things for free in order to avoid getting scammed.)

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Isn't this a kind of "meta" question? It's not a problem you face travelling. I'm not saying it's not interesting but would "How does North Face come up with new backpack features" be on-topic for instance? –  hippietrail Dec 25 '12 at 7:25
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Based on the answers (and in particular, the fact the tours aren't necessarily "free"), I think this is a very valid question. The person asking the question has even alluded to this with their comment about avoiding getting scammed. –  Doc Dec 25 '12 at 22:02
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5 Answers

There are a number of different types of these "Free" walking tours, with the business models varying dramatically. In some countries you can expect to end up at the guides "cousins" carpet shop, where the guide will take a kick-back for any sales. Some tours are run by the local community and/or volunteers and truly are free (although with the potential for small tips which will often go to the organization rather than the guide).

And then there's organizations like Sandemans.

Sandeman's hit the press a few years ago when German TV station ZDF did an expose on how they operate. Google will give you all of the allegations and counter-claims (search for sandeman zdf), but in short Sandeman's were claimed to be charging their "freelance" tour guides ~3 Euro for every person who was on the tour. The tour guides would then push the guests for "tips", often including repeated comparisons to similar "commercial" tours, and the prices that the guests would be paying if they had taken one of those tours rather than their "free" tour.

If a guest tips 10 Euro, the guide would have made 7 Euro out of them. If another guest tips nothing, then the guide would be out of pocket 3 Euro. Either way the company has made 3 Euro per guest.

Whether this is a valid business model, and whether you should support such companies/guides is something that is probably best left up to each of us individually.

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I've done the Sandeman's Free tour in 4 cities. In all instances, the guides have only mentioned tips twice during the trips, first at the outset, explaining why the tour is "free" and then again right at the end. Never any pressure. I've usually tipped €10 since they are well worth it. The free tours also serve to advertise their paid tours (guides will often add that you can learn more about this or that in some paid tour) and I've bought several such as a result. –  Kris Mar 30 '12 at 15:11
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I assume Sandeman's also must get kickbacks from their mid-tour coffee stop and from ending up the tour at a pub. –  smackfu Mar 30 '12 at 15:41
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Several friends currently doing this in Berlin - EUR 3 still the going rate per tourist. IIRC there have been problems actually getting pubs etc. to agree to be the end stop, as the tour manager has to sit there all day and basically use the place as an office to collect cash / audit tours every day. –  codinghands Jul 15 '13 at 3:39
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There are two types of free walking tours.

Free ones sponsored by companies. For example, in Berlin - Sandemans has one, where you're offered and told about their other tours while you go on the 'free' walking tour of the city. In addition, you'll have it suggested that you tip your guide. The same occurs in Krakow through another tour group there. This is fine, they're generally up front about it, and there's no actual pressure on you to sign up - at the end of the walking tour you optionally tip, and then walk away if you want.

There's another type - like that in Santiago, Chile, where an international group has formed in various cities, and students buy their own red t-shirts and run the tours for their cities. It's still very good, the students are generally very knowledgeable and our entire group thought the tour was excellent. Again, you tip at the end. (Note I found the website for that but it doesn't have info about how the group formed, but this is what we were told on the day).

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I think you can earn a lot of money with these tips. I was once on a free walking tour in Tallinn, and a young women was our tour guide. She really did a great job and especially the older people were really impressed. At the end when we talked to here I saw how much money she got from other people. Almost every one gave at least 5 Euros. –  RoflcoptrException Mar 30 '12 at 8:51
    
Agreed, even though it's 'free', just about everyone gives something, so even if it's $1 a person, for a student giving a 3 hour tour, that's a bit of extra cash from a 30-person group. And as you say, if it's 5 Euros... –  Mark Mayo Mar 30 '12 at 11:51
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@RoflcoptrException - What counts is not the amount received in that particular tour. You have to consider this over a longer period (a month or two, a year, ...) . There will be days with fewer guests and also with a less generous audience. From one tour it is difficult to judge the viability of this model. –  PERSONA NON GRATA Dec 25 '12 at 16:29
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An interesting article “The Pros and Cons of Free Walking Tours”.

  • These tours are of course not entirely free. Most of the guides for these tours work on a tip only basis and ask that you tip them at the end for what you feel the tour was worth (you should also consider when tipping your guide for these “free” tours that often the guide pays a commission to the tour company for each person on the tour, so not all of what you give will go to them.)

These tours are not small group tours. Generally, there are 20-40 people on the tour with you.

the business model: 20 people x 10 EUR = 200 EUR - 3or4 EUR pp (i.e.60EUR) the obligatory commission for the tour operator so 140 EUR for the so called "begging guide" (not bad) or 10 people x 5 EUR = 50 EUR - 3or4 EUR pp (i.e. 30EUR) as above for the TO so 20 EUR for the begging guide (bad)

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care to elaborate why it's a useful article, or summarise it? We don't tend to like just links as answers - if the link goes away, we lose the information :( –  Mark Mayo Jul 15 '13 at 0:44
    
done as you proposed –  Piotr Kruczek Jul 15 '13 at 1:12
    
Great! thanks :) –  Mark Mayo Jul 15 '13 at 1:20
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This is an interesting article, lots of people have views on this subject and preconceived idea of how things work or don't work. I have been a free walking tour guide for 3 years now and I am long way from being a Student, just passed the big 50 I have found myself in the current economic situation in Europe to for forced to change my profession. I do admit to having previous experience in this field, So when I found my business floundering I went back to this job.

I previously had done Paid walking tours and CHOSE to go the Free tour route after realising that there was not enough travellers willing to pay €12-15 for a tour but 1000's who would do it for free. I work for a company where guides have to pay a marketing fee, this I am more than happy to do, I'm self employed and always have been, I've always had business expenses and this 'Marketing Fee' is the only one I have now. Lots less than when I had my own shop.

We normally have about 30 guests per tour, averaging a €2 per person pay in to the company. I hope that the people enjoy my tour enough to tip me what they think it is worth. These tours demand a lot of high energy and besides knowing the history we also have to be entertaining enough to keep the people interested to stay for 3+ hours and listen to me chatting. I am a far better tour guide when working like this for my money than I was as a paid guide, regardless of the tour I did being a Paid guide I still got the same money, so if I was tired or maybe just lazy or feeling great, I'd go through the motions and as long as I told the info no one was going to complain to me.

Besides being a tour guide we need to be history teachers, comics, tourist information officers, Story tellers along with so many other skills expected of us from out guests.

Hey I make money, This is my full time job, I have a nice apartment in the centre of a major European city. pay my bills,and have some left over to travel and have a few pints of Guinness.

We do judge people and sometimes even some nationalities, We know who tips and who does not and to be honest sometimes the ones who ask the most questions are the ones to sneak away at the end and not tip....... Yeah we always know who you are.

I've done walking tours all over Europe and have never been disappointed with the free ones, something I can't say about the paid ones, yes there has been some bad ones.

Remember people, if you go on a tour, the guide will ALWAYS have to pay something, including the ones who say they are local volunteers, Who pays for the marketing, Flyers distribution, Admin, legal fees and licenses etc.

Please consider what a similar tour would cost you, your budget and just how much fun and info you got out of the tour, think about a €2-3 Marketing fee and tip the guide on these considerations.

Maybe I'll be your guide if you come to Dublin

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I am not sure if you guys did read well. If a Guide runs a tour with let's say 15 guests and they tip him an average of 4€ per person...
He must pay 2.20 to Sandeman and so earns 1.80€ x 15 = 27€ for a 3 hour tour.
That eans 9€ per hour.
I don't know if you have an idea how much energy it takes to talk 3 hours. To make a living by that is an impossible thing.
To make some extra money as a student might be ok. But the business model is definitely favoring the companies like Sandeman and not the Guide.

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Sounds like a great opportunity for you to start your own walking tour company and charge whatever price you feel is fair. But I can't imagine you'd get the same 15 guests when the price goes up. –  Rob P. Dec 25 '12 at 3:33
    
@RobP. And? How does that make the whole thing fair or sustainable for the guides? –  Annoyed Sep 27 '13 at 19:36
    
Who says giving walking tours should be fair or sustainable? Would-be consumers will decide how much they are willing to pay for a given quality of walking tour. Would-be tour guides will decided how much they are willing to receive for giving a tour. If people feel that the tour-guide business is being run with additional inefficiencies, that's a golden opportunity to run a better tour-guide business. If it is better consumers will consume it and tour-guides will seek employment. –  Rob P. Sep 27 '13 at 21:22
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