31st March, 2020

Tips for updating your tourism business plan

To slow COVID-19, the Government has locked down regular travel, causing many tourism business owners to consider their options. Here’s a guide to your next steps.

Experts generally tell entrepreneurs to update their business plan every one to three years.

But, with the novel coronavirus, COVID-19 shutting tourism operations down, it’s more important than ever for travel-related business owners to take a breath, take stock, and take a hard look at their business plans.

NOTE: This article doesn’t discuss stimulus measures or subsidies provided by the Government for tourism businesses during the lockdown, instead it aims to provide salient advice on how to update your plans while either in hibernation, or while operating at a reduced capacity.

If you, like many other business owners at the moment, feel that now’s a time to change the way you do things, then the best place to start is to reconfigure your business plans.

Updating your tourism business plan will help provide you with clarity as you prepare for lockdown to end.

5 key steps at a glance:

  1. Assess your financial position and related data – How healthy is your cash flow right now, and what is likely to happen in the next 6-12 months or more?
  2. Perform speedy yet thorough market analysis – What is happening in your industry sector, as well as the economy overall?
  3. Next, a competitor analysis snapshot is critical – What is the rest of your cohort doing? Is there an opportunity for you to differentiate?
  4. Consider what you can rationalise – Costs come in many forms, and chances are staffing overheads will need to be examined
  5. Remember, it’s business, but it’s also personal – Maintain a clear vision and be realistic about what you have to do given the current climate

1. Examine the data

To rewrite your plan, you must understand where your business is at the moment, and the numbers relating to its recent trading history.

Entrepreneurs sometimes rely on their gut instincts and make decisions on the fly based on intuition.

But when it comes to planning, it’s better to focus on facts. Examine as much data as you can about your business.

When you first created your business plan, you likely based everything in it upon research, suppositions, and educated guesses.

Today, you have hard data you can use to get to the truth about your operation.

For instance, you should have concrete figures about sales, profit and loss, cash flow, customer numbers, acquisition cost per client, average dollar sale per transaction, supplier costs, and more.

Ask your bookkeeper and accountant for as much insight on these numbers as possible, as well as being proactive in tracking your own financial data through your online accounting software.

The information you gather will help you understand what has and hasn’t been working.

For instance, you may have started your business intending to focus on one particular niche market, such as eco-tourism, families, or adventure travel.

But if the numbers show you’re making more sales and profit from, say, the corporate market, this should change how you move forward.

Be on the lookout for unexpected results that point you towards important insights.

Remember: as humans, we naturally try to confirm the decisions we have already made.

We often don’t notice conflicting information until we analyse numbers and see it written plainly before us.

2. Tourism market analysis

A key part of a business plan is market analysis.

With the coronavirus impacting the tourism sector in such a big way recently, the market has changed significantly.

Most countries are in lockdown and severely restricting, if not banning international travel. Domestic travel is limited for most, too.

While this situation won’t last forever, the coronavirus and the economic woes coming with it will likely mean travellers become more wary of taking trips, especially international ones, for some time.

They may also simply not be able to afford it.

To get in front of your competitors, then, and land your share of a more limited customer base, you must understand what people truly want now.

This may be quite different from what they have looked for in recent years.

For example, what type of security or booking flexibility will be top of mind for people when they do start planning to travel again?

Will people focus on shorter trips, closer to home, or will they be happy to journey far but want to keep the total number of days away to a minimum?

Perhaps many customers will forgo international travel altogether for the next year, and instead, search for new Australian-based holidays that give them experiences they’ve never had before?

Start talking to your customers about how you can better serve them right now and into the future.

You may need to pivot your operations to cater to new markets or the same clientele in new ways.

The businesses that take on this challenge sooner have more chance of surviving.

The more you can learn from your current or potential clients today, the better it will serve you in the coming months and years.

3. Competitor analysis

Another necessary component is competitor analysis.

With the market evolving so rapidly this year, your competitors may well be changing just as quickly.

Some businesses are closing up shop while others pivot and potentially now encroach on your “territory”.

This is all information you need to know to plan effectively.

Research who you’ll be going up against to secure customer dollars, and discover what they’re offering and how.

When a crisis hits, many entrepreneurs get creative and come up with inventive new ways to provide or market their services.

They also try out new tech and other tools to cut costs yet still deliver quality products and services.

Look at what other tourism ventures are trialling to stay afloat, and consider how you might similarly innovate.

Plus, be prepared to learn from competitor mistakes, too.

What might have backfired on your competitors or provided zero positive impact?

This information may still take a while to distil down as the coronavirus crisis evolves, but it’s something to investigate over the coming months.

4. Review staffing and other costs

One of the prime issues for tourism-based businesses now is staffing, or rather, the inability to pay employees when operations can’t run.

While you’ll be focusing on the short-term need to lay off workers at this time, do think about your longer-term needs when rewriting your business plan.

Get clear on what you need now and what you’ll require once travel is less restricted.

You may have come to see that you must invest further in your customer service support staff, for instance.

Or perhaps you’ve seen that you need employees who’re more experienced in certain areas or who have completed particular education, such as biosecurity or medical qualifications.

You may also have a better understanding of the type of training you need to invest in for your workforce for the future.

As businesses and industries evolve, so do staffing needs.
Use this crisis as a chance to plan how you might better equip your team in the future.

The truth is that the people you hired years ago may not be the right fit for your organisation any longer.

5. Your tourism business is personal

Get personal when updating your business plan.

Ask yourself hard questions and be clear on your motivations and goals.

Think about whether what you want to achieve now is the same as what you had in mind when you founded the venture.

You may have already reached the original goals you set and need to develop new ones.

Doing this can inspire you to rebuild in bigger and better ways.

Alternatively, you may realise you want more time at home with your family or for pursuing other passions, or that you want to focus your energies on particular aspects of the operation.

If so, your planning should revolve around ways to remove yourself from the business over time, to sell the operation or your stake in it, or to delegate the tasks you don’t enjoy to focus on those areas you love.

As you rewrite your business plan, also consider any new skills, knowledge or tech innovations you need to take the company to the next level.

It may be hard to see the light at the end of the tunnel right now, but this crisis will end at some point.

When it does, you want to be as prepared as possible to launch your business into its next phase.