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LETS GET DOWN TO BUSINESS.

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Hi Travel & Business Experts!I have a boutique travel agency in Australia and expanded into New Zealand about 8 months ago – I am based in New Zealand. Due to the nature of COVID-19, I have lost all business (income) until at least December 2020. I still have a few inquiries coming through for next year, but certainly not at capacity of what I am used to.. My people (Clients) are uncertain about future travel at this time because of the issues that have come up with cancellation terms and conditions through airlines/suppliers, time-due of refunds, which for most of my AU database, is upwards of 9 months, and with these changing every day, and insurance not covering, they are not confident in placing funds down.. What I am thinking of doing, is posting some ‘pre-registration’ options for some holidays for 2021. I am thinking of basing these packages on the usual travel spots, inc; Bali, Fiji, New Zealand. I am then thinking of contacting Intrepid / Scenic / Royal, to start working on some deals for next year. I was just wondering if anyone can please advise me on the best way to do this and if I even should do it? How should I notify my people of these awesome 2021 programs I can create? How much do I charge for a ‘pre-reg’ deposit – to ensure a financial commitment? What should my rules around this be?Any assistance here would be greatly appreciated. I am trying my best to stay positive, but with all income down the drain, I am just as nervous as my clients are around where the industry is heading.. Thanks in advance, Soleil

Question submitted 03/04/20 @ 04:45pm
Industry: Tourism
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  • Morena Soleil – firstly, good on you for thinking about what next and what you can do. Many people are using the time to work out what next and how to plan with the levels of uncertainty. A couple ideas, and then I will jump into your specific questions. (1) past customers – do you have relationships with them, can you connect with them and see if you can help them ‘plan’ for a trip in the future, ask them when we have more certainty (and maybe there has been a gap) would they like to travel and ‘where’ – the idea here is the people who have worked with you in the past will know you, they will hopefully like what they received and that means you have to do less work to get them as potential future revenue (2) for the wider market of potential customers, I would think about how you can build an engagement with people who might still be interested in travelling post Covid-19, what can you do to help them work out where they might want to go, what options – this is about building your brand with your potential customers to choose you when they are ready, my sense is that I would not be trying to close people in this phase, this is more about you engaging, adding value and helping your market actually have hope and plan for the future. (3) on the question of ‘should I charge them a deposit’ – this is challenging, because you need to find ways to live, and keep the business going but also there is much uncertainty in the market that it is very difficult to ‘plan with certainty’ – albeit, here’s a thing, if you could actually secure epic deals from your suppliers eg. hotels for pre-bookings then you could pass these onto your customers and that might be a way to secure some deposits – just be careful about the ‘lock-down’ and when this will finish, and also the ‘trust account’ philosophy of holding your customers moneys for their trips – now lets have a look at your other questions. (4) how do you notify people of these packages you have secured? Talk to your past customers, they might be interested, build up some profile on Facebook, Instagram – mabye we can get some Facebook people to give some guidance on how to do this ‘hacker style’ ie with little funds – but I would say, you need to build the audience you can talk too – and maybe you need to find out ‘what might be the profile’ of people who would be willing to plan for a trip in 2021 now, because if you understood who these people were you could work with the Facebook services to go and find more of those people (5) How much do you charge for pre-registration to ensure commitment? I am not sure what happens in tourism, for my Icehouse business we charge somewhere like 15-25% if it is a long way out – does 10-20% sound reasonable? (6) Rules around this – as I said above, when you take other people’s money you have to be really careful about that customer money ending up in the same pool of money as you have to run the business, there are trust account rules in other industries, and I am sure the same thing applies for tourism, it is their money, not yours until they do the trip, so keep it in a separate account that you cannot access for the day-to-day business costs.

    The final thing is – you have clearly experienced the pain of your business stopping, that is hard, but you also must not lose hope, you need to keep doing what you are doing to ask questions, to uncover where there might be future business. Remember lots of people will also be thinking about this right now in the tourism market – so think about your point of difference, and how you can amplify that up – and be ready for when normality comes back given how impacted tourism has been and will be around travel movements.

    Thanking you for having the courage to share – Nga Mihi – Andy

    Hi Soleil, great questions. Certainly tourism has fallen off a cliff and likely to take quite some time to recover. It will likely recover first domestically, then between Australia / NZ, then in to Asia before the rest of the world. I support all the great comments from Andy, spot on. Right now, it’s time to build connections and engagement with your target market of previous customers and likely potential customers. There is too much uncertainty and unknown for people really to be thinking of future travel. You may need to wait until people are out of lock-down and moods start to lift back up. In the meanwhile, keep inspiring your customers and keep them connected to you. Are there ways you can pivot your business for domestic travel, or Trans-Tasman travel, as those are likely to be the ones that open up the quickest. You’ll need to be sensitive to the price point of your packages, as people will likely be quite conservative in the short term. Suspect it’s hopeful to secure a deposit now, given the levels of uncertainty, but maybe something to consider once people are out of lock down and the economy picks up again. Great you are thinking about how to pivot the business. When you have the will, you always find the way.

    Hi Soleil
    Andy and Leslie have provided absolutely solid advice and I agree with them.
    For the short-medium term I would also look at following the AirNZ lead on this.
    If they are clearly signalling they will be positioning themselves as a domestic airline with future international options as the world eases travel restrictions then I think it would be fair to assume that would be a good mindset for you to look at how to position your business over the next 12-24 months.

    The silver lining for travellers is that local tourism sector will be screaming out for cashflow and offering killer deals.

    Look at aligning yourself now with local operators and getting the message to your existing clients that they have an incredible opportunity to see their own country like never before and experience things that the originally thought were way out of their price range.

    This is a great way to look at reinventing domestic travel and those that sell this opportunity to the existing client base that traditionally took overseas trips will have a much greater chance of thriving.

    Domestic travellers also tend to have a shorter lead time so this could improve cashflow.

    Start talks with operators as early as you can so when NZ comes out of Level 4 and things start relaxing you are well positioned to take advantage of the timing when people will be looking at getting away from a home they have been cooped up in for weeks.

    You could also start showcasing local travel destinations and operators now (without the hard sell) to get your existing audience thinking about local options and show that you are supporting the industry.

    In short – be a leader not a follower and be ready to move ahead of the competition

    Some excellent advice from Andy, Leslie and Glenn, and to reiterate the point about using this time to inspire and not sell yet.. too early and risky for you.. and them. Time to stay in engaged with past customers, look at what domestic opportunists there are as well as cross Tasman as I think this will be the first market to open up again..

    Following on from Glenn’s great thinking about domestic.. Family travel is not something I believe has not been focused on or well thought out in this part of the world.. Maybe this lock down has brought families closer together and made people slow down and realise what is really important to them. Maybe multi generational travel will become a thing in Australasia like it has in parts of Asia and Europe…? It is a challenge as we tend to have a “we can do domestic travel ourselves” mindset.. Think why we used to travel to places like Fiji and Bali and see if the same deep down wants and needs can be delivered in different destinations locally, potentially at great prices in the short term.
    Think differently and best of luck!

    Hi Experts,

    Thank YOU! So much for all of this advice!

    I am sorry it has taken me a while to reply, I have still been inundated trying to bring clients home & on hold with airlines to organize credits and refunds.

    I have taken all of this information and value on board and am currently re-writing my business plan, engagement with customers, and social media channels in view of how I see the next 12 months, 2 years and 5 years based on where I think the world is going, the way I think it is changing, and what benefit my business can bring to families and couples alike.

    I sincerely appreciate the wisdom that has been passed on, and I will most certainly update this thread once I have completed the new business plan, to show you where your time to reply has lead me, and also ask any further questions I may have.

    Thank you so much for all of your manaaki.

    Ngā Mihi,

    Soleil

    Morena Soleil – this is why we created Manaaki – to show people like you care, hope and love – much Aroha to you and all the best for your journey. Nga Mihi ki a kotou my friend

    I joined this forum out of curiosity because I was at coffee and jam with Rob Vickery. I have been very impressed with the integrity, care and depth of the advise. Wow. Best of luck Soleil. Would your ideal customers always like to stay at hotels? Or would they like to connect with kiwis for a local experience? I have been trialing a Virtual Hotel idea for New Zealand. It is small and modest – we’ve had 18,000 guests through. The idea is self-contained units, carefully managed through a unified brand. Our point of difference is matching people through their hobbies, passions and interests. It is mainly for female single travellers, baby boomer and retired couples. What is your target market? We have just upgraded (not launched yet) our software, which enables us to collect a commission from each guest night and connect with In-Bouunds. We earnestly want to help re-invigorate the domestic tourism market – but we realise customers will be very cautious. We hope to trigger a spark around passion?

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