CORKY SISCHO, TIMBERRIDGE AIR & OUTPOSTS, NAKINA
ave you asked yourself if you are in a dying industry? Maybe you would rather see our plight as a cycle and we are on the bottom of another cycle. September 11, 2001 was a turning point for the US economy and it has not turned around since. Unfortunately Canada and Canadian tourism are tied to this economic disaster.
The hard cold fact is clear. Tourism in Canada is in trouble. The days of trying to find the 20% of our guests that have died or left are gone. There are fewer folks out there looking for a Canadian vacation. We may not want to admit it, but we are now stealing customers from each other.
When operators get together they complain about the lack of government marketing and help. The weak US dollar. Poor marketing by their NOTAP, the Sport Show operators lack of publicity in the show marketplace, the cost charged for a booth at a show, the lack of response to print advertising, the difficulty in getting your website in front of the public, etc.
Lost in all these complaints is the reality that the only way out is MONEY.
Our guests are no longer going to put up with “shacks” in the bush. They now expect hot and cold running water, showers, boats that don’t leak, motors that start on the first pull, communication from the outpost, big fish in the lake, etc.
So where do we get this money? Simple - our source of cash is our customers.
So now I hear the following arguments from operators:
If I raise my price my guests will leave and go with my competitor.
The operator down the road charges less then me already.
The other operators on my lake won’t discuss price.
Customers all buy based on price.
My flights are only short ones.
And so on and on they go.
Have you ever thought about the annual income your guests are making? Should you live on less than they do?
So, let’s look at another fact. Did you know that you can draw a line north and south through Lake Michigan and you will find that many operators east of this line are charging half as much as those on the west side. Yes, $600 US vs. $1,200 US for the same thing. Now here is the kicker - they market in the same shows. So don’t you have to wonder why a smart operator would leave $600 per guest lying on the table?
Its no wonder Ontario has the reputation as the K-mart or Wal-Mart of Canada. Who could argue otherwise?
Now ask yourself why Sunset Country and the Patricia Region do so well marketing. Then ask why the All Canada Circuit dropped Grand Rapids, MI; Cleveland, OH; and Wilmington, OH.
Let’s assume that most operators are handling 300 to 600 guests for the summer. If you have 600 guests @ $600 how many could you loose if you raised your price to $900. 200 less guests will generate the same gross revenue. What are the savings and impact on your resource? If you are a premier operator your guests will stay with you! Put some of the dollars toward visible improvements your guests can see. This will leave you more for advertising to fill the beds.
Let’s assume you would like to sell your business in a few years. Are you grossing enough for the new operator to make debt service payments?
Let’s go back and look at some of the objections.
If I raise my price my guests will leave. You can’t raise it so fast that you look like a money grabber but your guests are smart, they know what’s happening out there.
The operator down the road…Do you want to go out of business like the guy down the road will?
Other operators on my lake… So who cares? Who is leading the way?
Customers buy on price…Not true, they buy on value for the dollar.
My flights are only…Guess what, customers don’t know what you know.
September 11, 2001 is now almost five years ago and yet the effects are still hurting us. It’s time we understand that we are an Industry, not a group of small businesses trying to beat each other up. The only way out for our industry is to work together. We have really bright and competent folks in this business. How can we work together to find our way out?
This article was taken from pages 10 & 11 of NOTO's "The Outfitter" publication, Spring 2006 Issue