Our recent visit from Peter at Qualmark brought with it an interesting discussion on what their plans are to audit tourism operators with a focus on maintain good, sustainable tourism practices.
He mentioned how Qualmark and the auditors have concerns over the direction operators will go once the New Zealand borders open up again. We too, share that concern with much anticipation.
The elephant in the room will be people’s jobs and livelihood. It’s nothing new and is shared the world over even before this pandemic.
For example, small corners of Thailand’s tourism industry still showcase the chance to get a selfie with a tiger, while Mt Everest is backlogged with wealthy wanna-be climbers. All because this still brings strong revenue streams for poor regions.
The need for money is only amplified when a crisis like COVID comes along, and that’s what has Qualmark worried; will suppliers become cheap, lax on their values and take whatever profit they can all in jeopardization of sustainable tourism?
Loans need to be paid back
26 inbound operators are reported to have received up to $20 million from the Strategic Tourism Recovery fund in 2020. The loans vary in cost from a few thousand dollars to tens of thousands. Although these helped many keep afloat, cover overheads and some staff salaries, it will all need to be paid back.
It’s hard to tell if the market will provide as much return as these borrowers will need to pay back; the term repayment will ramp up once interest-free runs out in 24 months.
While some operators are seeing the return of domestic customers, many are taking it day by day. The repayment will come around quick and will naturally contribute to an industry ‘pulse’. You will see mass discounts, a change in pricing structures, partnerships and (if international tourism is back), more quick and dirty wins – like ‘bookings without the guide’ or ‘buy one get one free’.
More operators have loans to pay back than ever before. Fortunately, we’re not one of them, but as a business owner, I know the real risk of owing someone money – it’s easy to get desperate and drop your values.
Back in the UK, I worked for an Accounting website that received 9 million users a year – crazy numbers. I sold a whitepaper marketing campaign to a small Fintech business. I told them the demand for their piece was so high I’d give them their money back if it didn’t receive a 25% lead click through rate (the term used when a user clicks a link or downloads the paper from the email).
Unfortunately, this company had no follow up process to connect with those leads again. Sure enough, the click through rate was 72%. They received over eight thousand leads and contacted about 20 of them at random. The business is no longer running.
This is a similar phenomenon to what is called elastic demand; a relationship between price and quantity (the lower the average cost for a product or service, the more customers).
We saw this occur in the supermarkets with toilet roll. When Countdown couldn’t stock the items people were after, customers just went online. When they did restock, they upped their price – consumers then bought unbranded products.
In the tourism world, operators will send out a soup of discounts and booking options to international visitors. The pulse that occurs can be so overwhelming, it becomes impossible to service. They hire more and more staff, buy more vehicles and extend their operation to keep up with demand, then almost overnight, the market is gone (either due to another pandemic, or seasonal changes).
The lesson here is to ease into market changes and customer expectations, not get desperate when the flood gates open.
Mass crowds could ruin Sustainable Tourism
Let’s be honest, most people know that once the borders open and there are no local isolation requirements, NZ is going to get busy, really busy.
We’ve been placed on an international-media-pedestal just about as many times as America has (but for opposite reasons). Jacinda Ardern, live sports, festivals and nights out have been heavily shared on social media. You’ll be hard pressed to find someone commenting they don’t want to come here.
But surely significantly more tourists is a good thing for the economy and us? The answer is yes, and no. When demand peaks, ‘sustainable tourism’ often takes a back seat.
In 2018, Zoe and I visited Plitvice, a world heritage site in Croatia. It was single handedly the worst sightseeing experience I had ever done, and I’ve been to Borneo and witnessed the devastating Palm Oil fields.
Plitvice is a national treasure that was absolutely swarmed by tourists; tens of thousands of them. No capacity restrictions, customers could buy plastic covered treats at the entrance, people smoked and dropped the butts, others brought their dogs who peed in the water. It was remarkably bad.
But the multiple five star hotels surrounding the location proved that they’d opted for money over experience.
New Zealand has a real supply and demand threat on the horizon, and unless we revisit and maintain our codes and restrictions, your favourite hiking spots could be Walmart on black friday.
Positive things are happening
Recently, we received an email from the Department of Conservation detailing a nationwide incentive on catching unauthorised guides on public land. They sought the help of other suppliers, kiwis and tourists to keep an eye and report any offenders.
This was a big issue two years ago with the introduction of Airbnb Experiences and how only 10% of Hosts had the authority to guide their tours. It still continues, but the overall awareness is making this illegal act taboo. Working with Tourism New Zealand, DoC are committed to find find more formalised ways to maintain sustainable tourism in NZ.
As well as Qualmark’s incentive to make it harder for suppliers to get certified if they don’t show true, genuine sustainability practices, the Government is making it more rewarding for the right suppliers to manage potential overcrowding. This includes supporting marketing, sales and growth while the borders are closed so that operators can manage a better domestic market. (Bushman Tours was offered this funding for marketing support in late 2020).
They’re also pushing for businesses that can show a five and ten year strategy toward their carbon footprint (we have one we’re working on now). This will encourage people to continue to book with the right suppliers who care about growing NZ sustainably.
New Zealand tourism (you’ll know them as 100% Pure NZ and newzealand.com) is making huge progress on a domestic campaign to encourage kiwis to book local and maintain strong values to how they travel local.
It’s these and many other acts that keep us optimistic. We’re confident New Zealanders aren’t going to let their beautiful country become an overrun theme park, but it is important we all understand the risks as they are now.
Wondering where you can start? Easy, start local.