Whether and how free virtual tours can bring back visitors

ABSTRACT

Many tour providers have pinned their hopes on providing virtual tours to bring back visitors in the ongoing coronavirus disease 2019 (COVID-19) pandemic. In this paper, we develop an analytical model to examine whether free virtual tours can help attract more visitors. We consider a tour provider deciding whether to provide a free virtual tour and its grade if any is provided to maximize visitors' physical presence. Potential visitors possess heterogeneous preferences and perceived equivalence, and the tour provider knows only their respective random distributions. The model is solved to maximize tour providers' physical demand. Our analysis finds that a free virtual tour can help if potential visitors significantly underestimate the physical tour and identifies the critical threshold;we also find that the COVID-19 pandemic reduces the likelihood that a free virtual tour can help. This paper contributes to the tourism management community by accentuating the dark side of virtual tours, suggesting that tour providers should be prudent before introducing any virtual tour. We also provide guidelines for virtual tourism, helping tour providers respond to and recover from the COVID-19 pandemic and other uncertain situations.