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Tourism is broken. It’s time for a new model

May 4th, 2020 | | backpacker

Survival of the fittest leads to cannibalism, evolution leads to dead ends. 

Covid-19 has devastated most tourism companies. Business was literally brought to a stand-still in what felt like an instant. What a fragile game we have been playing.

We do now have a choice, we can try and carry on and act like nothing happened or, we can use this opportunity to trim the fat and fix what was broken. 

We can’t count on the big players to do the right thing for the market. What is good for them isn’t necessarily good for the majority of operators and their customers.

All this talk of bailouts for existing businesses has me wound up. Many of those badly affected by the current crisis are dinosaurs who don’t deserve outside help and won’t benefit from external financial support as they won’t change.

The tourism industry has generally been performing badly for the last 2 years, particularly in Australia and particularly in the part of the market I have been most involved in – adventure and youth.

Right now, we have a huge opportunity to clear out the deadwood and change for the better. Some things have crept into our ecosystem that we need to stamp out or at least control better.

Distribution platforms messing with the market

We value simplicity and a ‘guaranteed’ way to get our money from numerous sellers. We don’t want unrealistic rules, to be pressured for increasingly greater commission, platforms pushing their products or even – and this seems unthinkable – using operators’ money and withholding payments. With new platforms and payment technologies we have options, we need to adopt them and make them work for our businesses.

Travel agents who don’t add value (OTA’s and traditional)

I’m all for paying a reasonable commission to agents who add value to the distribution chain.  For many retail stores the high commissions are wasted on unsustainable business models with limited unique customer reach. I choke when a cashed up OTA demands high commission then competes with our business in an online space.

Governments ignoring infrastructure requirements for visitors

Travellers in our market make the most impact on regions away from the cities. Yes, this is both positive and negative. It certainly helps regional economies as well as the national one. Governments can’t ignore the responsibility for infrastructure associated with this – more recycling bins and toilet blocks for example, otherwise it leads to local pushback. Don’t get me started about ‘bus parking’. The cost shouldn’t just be borne by the local communities who can least afford it, it is a national issue. Done correctly, these industry touch points can be become a positive part of our story rather than an eyesore.

Penalty rates

Seriously, just because in some cultures they set aside a day to celebrate their god doesn’t mean that businesses should be forced to pay staff at rates which make their products unviable. Travellers don’t care what day of the week it is, they’re on holiday and we can’t expect them to pay 50%+ more if they want to travel on a Sunday. These rates result in fewer services, a poor customer experience and consequently less people employed.  We need to go back to the time when every day in tourism was the same – a great day.

Tourism Dispersal

Visitors need to be getting off the main tourist routes. This benefits everyone. There are a number of factors which resist this but my pet hate is homogenised bundles for the East Coast which aim to tick boxes rather than give visitors the best experience. These lead to poor word of mouth and ultimately fewer customers. We need to be serving truly engaging authentic local experiences.  These are almost invariably off the beaten track.

Backpacker travel shops

Some do a wonderful job but many are staffed by travellers who harass passersby, with very little knowledge about what is best for visitors to this country. Hustlers who don’t care about the individual and only recommend what best lines their business owners’ and their own pockets.

Instagram influencers

I sincerely hope that we get to a point where, unless they are properly qualified, no one takes them seriously.

The customers aren’t always right

Face it, some customers are just bad people. No matter what you do they will complain. Unfortunately, they have one sided forums available to voice themselves. These need to be given less air – or at the very least – we need a right of reply ‘this person is a wanker, you shouldn’t listen to them’. Google, TripAdvisor and associates, we need to work to the AirBnB or Uber model where we can rate our customers as well.

Unnecessary overhead

Big fancy offices, full of staff, miles from the action, are a thing of the past. Embrace technology, automate your processes where-ever possible. Focus on having your human resource adding value to customer experience rather than doing menial tasks. It will allow you to enhance your product and shockproof your business for the future.

Sales people running the show

I’m not sure when this became a thing (and maybe it’s a bit rich coming from me) but there seem to be many businesses run by people whose main experience is in sales, they have little product knowledge or focus. When they come up with an innovation it is rarely more than the same old dog with a new hat. Surely as an industry built upon the best of human experiences, we can do better.

Sustainability

This term has been hijacked over the years. Yes, removing plastic bags is important but we need structural change to ensure the longevity of our industry. We can achieve this by allocating resources better and eliminating business models that waste precious tourism dollars or export to foreign entities. We need to spend less on facilitating transactions and more on supporting the markets that host our customers. Our future as a destination depends on industry and government working together to provide an ecosystem that recycles revenue domestically and reinvests in the businesses that foster our long-term growth.

Lastly and most importantly (and related to the above) – Drive your business forward with customer-focused innovation.

If you invent a new bungy jump, people really will beat a path to your door – believe me I saw it happen first-hand.

We are lucky that we live in a time when it is possible to cost-effectively make significant and beneficial changes to tourism businesses. We need to embrace digital technology to enhance our businesses, to create new or enhanced experiences and to cost effectively access customers. We need to automate our processes, to get closer to the customers, to earn more revenue from our existing clients, and to improve their experience with unique offerings.  

Post-corona virus it’s going to be a whole new world, and I’m bloody excited. 

With all of this in mind, who and what should we be getting behind?

Comments most welcome….

Written by Neil Geddes

Sourced by Mike Barrow





5 Responses

  1. Trish Burt says:

    Airbnb, Stayz, ASTRA plus all those who rent residential dwellings as ghost hotels should be taken to court for “illegal use of premises”.

    Local councils should be mandated to enforce residential zoning. Ah, but how many politicians and councillors are profiting from Airbnb?

    Residential housing is for housing Residents.

    • Macca says:

      Trish Burt – Many Airbnb rental properties have already hit the market as the international market has come to a closure. Just hope the legal hostels and accommodation suppliers can survive.

  2. Damo Wennington says:

    Great article, intermediary sellers muddying the waters and not helping really at all. I have hardly ever seen an Aussie working in one of the backpacker travel shops in my 14 years of being a tour operator, the backpacker travel shops all want high commissions, famil trips so they can sell us ( yeah right) take admin fees when we have to cancel due to weather and we deal with the angry customers etc,

  3. Jason says:

    Well said Neil, It’s been a very desperate industry for many years now due to greed and a true lack of passion. It’s a very bad look having desperate travellers trying to drag people into a shop to sell poor products that they have no idea about or what would be a great option. All they truely care about is a excel spreadsheet or when will the next event happen with free drinks. Just imagine going to any beach town in Australia and opening up a bag of fish and chips and watching the seagulls go for it? This is what it looks like from a outsiders point of view when walking past travel shops.

    This pandemic has forced many people online and our way of shopping today has changed for ever. OTA’s will grow from this and shop front agents will shut shop due to our new behaviours on how we shop. Operator’s should end up with larger reach with more control, better websites, seo and new ways to market their products.

    September or October will be the hardest months for any tourism business as banks will show no mercy for loans or mortgages. Anyone with a lease will find the road to recovery very hard and expensive, especially if the boarders are still closed. Maybe this is the perfect storm that this industry has needed for many years? I do think that Australia is such a beautiful place and we will pick back up. It will never be the same and I’m sure that will be for the better.

    Jason

  4. Great article Neil.

    The Global Tourism industry and the COVID-19 pandemic has severely crippled the market overnight with long-term effects to be felt.

    At a macro level, the impact on economies and livelihoods has vaulted from severe to catastrophic. The impact of COVID-19 has been particularly catastrophic for the travel and tourism sector. The statistics on international air travel show the industry coming to an abrupt halt. The cruise industry has been upended with media sources characterising ships as “ocean-going petri dishes” while showing the trauma and human tragedy of the cruise ships Ruby Princess. For many countries, travel and tourism (T&T) play a large and critical role in the economy. More so for Australia, the Queensland region and for the regions close to the Great Barrier Reef and world-heritage-listed rainforest which normally sees 3 million international and domestic visitors a year in an industry worth $2.5 billion annually.

    The World Travel and Tourism Council has warned the COVID-19 pandemic could cut 50 million jobs worldwide in the travel and tourism industry. The tourism industry currently accounts for 10% of global GDP. This impact would depend on how long the epidemic lasts and could still be exacerbated by continued restrictive measures and fear of further waves. The coronavirus arrived and changed the way we live and the way we travel.

    At ResPax we are an experienced team of technical experts with strong tour industry knowledge providing a product platform suite comprising World Class Tour / Reservation Management, Customer Web Booking Engine with live availabilities & high conversion rates, Point of Sales, Large Connectivity Marketplace allowing live availability booking with 100s of Online Travel Agents & Inbound Tour Agents, Payment Gateway Hub transacting secured payments with a wide variety of payment options.

    Established in 1999 and based in Cairns, ideally located in the Adventure Capital of Australia. The ResPax name is ingrained in the area, with long-term operators taking advantage of the product suite. Being privately owned by a group of tour operators. This contributes to the success, as the platform is built for tour operators, by operators.

    Are we asking and listening to operators. Short answer YES. You have made great comments and points of view all of which is aligned to what our customers are reinterating.

    We canvassed the needs of operators and are trying to deliver; ready for a post COVID world. And like you said we provide the means to automate processes, to get closer to the customers, to earn more revenue from existing clients, and to improve their experience with unique offerings. High on the list is providing operators with options to mitigate the unthinkable act of a few distributors using money and withholding payments.

    Cheers Scott