How Travel Businesses Can Pivot in Times of Crisis

The concept of ‘pivoting’ has gained momentum as we become collectively aware of the fragility of previously bulletproof systems.  As we enter what may be dubbed ‘the era of the unknown,’ the ability to pivot in business is more important than ever.

Just for background, pivoting essentially means finding ways of changing the direction/strategy of the business while capitalising on existing assets or skills.  Pivoting is extremely useful in oversaturated markets, when the company isn’t meeting KPIs, or there is external pressure.

Travel entrepreneurs have been under intense external pressure since the advent of COVID19 in 2020.  The travel industry was one of the hardest hit, leaving hundreds of thousands jobless and tourism leaders in a constant state of crisis management.

These ideas are just a few essential tips for surviving the Coronavirus Economy in South Africa.  We welcome any tips, ideas, or innovations from other travel entrepreneurs as well!  As we keep saying, we are all in this together.

HOTELS, LODGES, & SAFARI CAMPS

Thatch House Hermanus

  1. Enlist a more lenient cancellation policy  to motivate client bookings in uncertain times.  Air BnB has employed this method, which gives the consumer confidence about booking in a time when travel may not be logistically possible.
  2. Lockdown could continue for weeks after the specified date, so some lodges are closing their doors for 2-3 months.  This could help alleviate running costs, and allow staff  to help manage the difficulties of home life in lockdown.
  3. Motivate future bookings with deeply reduced rates.  This rewards travellers for risking their money on a lodge booking in uncertain times for travel.
  4. Look at selling time shares, long term rentals, and other bed night sales avenues with lower return yet higher annuity value.  This creates a bedrock of income, stabilising the finances of the company when tourism volumes are low.
  5. Consider ways of using the fixed assets of the company to generate new revenue streams.  For example, safari camps with 4×4 vehicles could do delivery of essential goods to the bush, open the lodge as a vetted viral refuge, and so on.

RESTAURANTS

  1. Negotiate with staff on salaries.  Look at ways your staff members could contribute from home (social media content, marketing, food blogs) and pay them as long as possible.  If this is not possible, consider bringing down the base salary and enlisting help from various government funds to supplement their income.  This will help sustain more salaries over a longer time period.
  2. Use the kitchen to create ready meals for local grocers.  This may require getting special dispensation from government, as takeaways are not currently allowed.  However, most grocers still have a ready-made food section so restaurants could fill this market niche.
  3. Use the bakery to supply grocery stores.  Everyone loves fresh baked bread!  Look at various avenues through which to sell premium fresh baked goods.  Give the balance to feeding schemes in poor areas, which also helps calm the potential chaos of this time.
  4. Do a promotion on stock items close to their expiry date.  Create a network of clients or food distributors and resell quality foods purchased on wholesale before they expire.
  5. Participate in a feeding scheme.  This isn’t an economic pivot, but at the moment it is important that we all help out in any way we can.  Starvation is a very scary possibility for those who may have lost their (already meagre) income months ago. As a restaurant, one is uniquely placed to help feed hungry people who may be in unusually dire need of basic sustenance.

TRAVEL AGENCIES, DMCs, & TOUR OPERATORS

Best Africa Travel Agent

  1. Encourage clients to continue weaving travel dreams.  The yearning for adventure and exploration has been a quality of humankind since the dawn of our collective timeline.  Continue to share inspirational (not aspirational) stories, and reveal what life and dreams are made on African soil.
  2. Discover ways of creating a personal travel brand.  Many people are at home right now, creating an opportunity to connect with clients on a more personal level.  Take the time to reveal to them who and what is behind the brand, and connect with clients person to person.
  3. Negotiate travel specials for clients.  At the moment some savvy, risk taking clients will be willing to book amazing experiences if they have a relatively lenient refund/reschedule policy.  Combine this with reduced rates, and you have a winning formula!
  4. Sell the option of delaying for free.  If a client cancels a previously booked trip, cancellation fees are heavy.  Many travel insurance companies also exclude pandemics. It would be good for clients to understand that they can delay free of charge and still enjoy an amazing getaway at a future date. 

Lastly, the SMME in South Africa has created a dedicated fund for tourism businesses.  This fund is a micro-loan with a zero percent interest rate. Even though the recipient can receive ZAR 50,000 per month maximum, this subsidy loan could go a long way towards alleviating the financial pressures of the next few months.

On some level, we are all in this together.  I have heard it too many times, but the cliché rings particularly true for the travel industry.  Perhaps if we help each other in this time of crisis, the industry will re-emerge more resilient, connected, and meaningful for all.