The Pricing Cliff
Designing for the traveler who
doesn't fit either option.
Context Travel had two tour formats. Small group experiences that needed 4 people to be profitable, and private tours priced for parties who don't need to think twice. For the budget-conscious couple or solo duo, neither worked. The gap had existed for 7 years.
I conceived and designed a third product type to bridge it: a shareable private experience, capped at 4 people and 2 purchasing parties, that made the economics work for both the traveler and the business. It launched in February 2025, delivered 483 tours in its first year, and reached a customer segment that hadn't been converting before.
A 7-year-old gap in the product lineup.
Context Travel's small group tours required a minimum of 4 participants to reach profitability. In practice, many ran with 2 or 3, which meant the company was losing money on those departures. The private tour option existed, but represented a significant price jump for a couple or small party who wanted intimacy without the full private price tag.
This wasn't a new observation. The small group product had been trying to solve for small parties for 7 years without cracking it. The gap was real, documented, and costing the business on both ends.
The small group product needed 4 people to work. Private was a price cliff for 2 or 3. Nobody was solving for the people in between.
Two Formats, One Gap
- Small group tours required 4+ participants to be profitable
- 2 and 3-person bookings on small group tours ran at a loss
- Private tours represented a significant price jump for small parties
- Budget-conscious couples and solo duos had no good option
- 7 years of trying to make small group economics work for small parties
A Third Format Designed for the Middle
- A private tour experience capped at 4 people, with a maximum of 2 purchasing parties
- First party books at a 20% discount off the standard 2-person private price
- If a second party joins, both get an intimate expert-led experience at a lower price point than a full private
- If no second party joins, the first party still has their tour at a slight discount
- More profitable than a discounted 2-person private when the second party joins, hitting above 40% gross margin
- Operationally simpler than small group tours
Starting With the The data that made the case.
Before proposing anything, I looked at existing research on how clients were behaving around additional passengers. About 997 additional PAX products had been added to orders in a single year, all through a process that was entirely manual.
The data also pointed to something more fundamental: clients frequently didn't understand what their purchase entitled them to when it came to bringing more people. The top pain point was time lost going back and forth with the customer experience team. Close behind that was confusing overlapping communications, and a basic conceptual mismatch about what private tour pricing actually included. Clients wanted flexibility around group size. They just didn't have a clean way to act on it.
The process was entirely manual
Nearly 1,000 additional PAX additions in a year, all requiring back-and-forth with the customer experience team. The operational cost was significant.
Clients didn't understand what they were buyin
A recurring conceptual mismatch: clients thought private tour pricing bought them the expert's time, not a fixed-party experience. That misunderstanding surfaced repeatedly when they tried to add people.
The appetite for flexibility was there
The volume of additional PAX requests signaled that clients wanted to bring more people. The product just wasn't designed to support it cleanly.
From a two-format lineup to a product that fills the gap.
The pitch was written in Shape Up format: a defined appetite of 6 weeks, a clear solution, explicit rabbit holes, and hard no-gos. Early thinking included a smart matching algorithm and pre-trip social features. Those got cut. The version that shipped was simpler and more shippable: the second party finds and purchases the available slot on their own.
Two formats with a gap between them
Small group tours that lost money below 4 participants, and private tours priced out of reach for budget-conscious small parties. Nothing in between.
A third format designed for the space in between
A shareable private experience: capped at 4 people, 2 purchasing parties maximum, with a 20% discount for the first party and a path to profitability when the second party joins.
The concept was developed collaboratively with the product manager, who coached the business constraints throughout the shaping process.
The decisions that kept it from becoming confusing.
The thorniest UX problem wasn't the booking flow itself. It was the product lineup customers now had to navigate: Private Tour, Shareable Private Tour, Small Group Tour. Three formats that could differ by as little as 2 guests, each with different pricing logic and conditional outcomes.
Mutual exclusivity by date
Small group tours and Shareable Private options wouldn't appear as available on the same day. This removed the most confusing scenario: a customer choosing between a group experience and a shareable private on the same date, when the price and capacity difference between them was minimal.
Progressive disclosure for the product distinction
Rather than presenting all three product types as equivalent choices side by side, the booking experience explained the difference between private and shareable private at the moment of decision. Customers didn't need to hold the distinction in their heads across the entire browsing experience.
Scoping the concept to what was shippable
Early ideation included smart matching and pre-trip social features. Stress-testing those against real constraints — cancellations, guide dynamics, traveler openness to strangers — made clear the complexity created more problems than it solved. The version that shipped was organic discovery only, no algorithm, no social layer.
How the two-party purchase mechanic worked.
The first party selects the Shareable Private option and is informed at the point of purchase that a second party may join, and that they would receive a refund adjustment if that happened. No commitment required from the second party at that stage.
The second party then independently finds and purchases the remaining slots on the experience. No matching, no coordination, no algorithm. The product relied on organic discovery — which, as it turned out, was the variable that most needed investment.
First Party Books
Selects the Shareable Private option at a 20% discount, informed a second party may join
Second Party Discovers
Independently finds and purchases the remaining slots on the same experience
Both Parties Confirmed
Intimate expert-led experience for up to 4 people, at a lower price point than a full private for both parties
The product ran with no active merchandising support. Customers had to find the Shareable Private option entirely on their own. The two-party fill rate reflects organic discovery only, never a promoted or surfaced product.
What the fill rate actually measured.
What the 25% two-party fill rate measured was organic discovery with no merchandising support. Customers had to find the Shareable Private option on their own. The product was never given the operational conditions to properly test the concept. The incremental booking data from the first 6 weeks suggests that actively surfacing the product to solo and duo travelers earlier in their journey would have moved that number.
Looking back, I'd push earlier for alignment on merchandising as part of the launch conditions, not something to revisit later. A product that depends on two parties independently discovering each other needs more than passive availability to work. The three-format complexity concern was real, but it was a design problem, not a reason to step back from the concept. The progressive disclosure and mutual exclusivity interventions were steps in the right direction. There was more work to do there, and it didn't get the chance.
A 25% fill rate with no promotional support is a signal, not a verdict.
— Michaela Hoffman