on December 18 | in BUSINESSWISE, Featured | by admin | with No Comments
Tourism insiders know that their industry is not for the faint-hearted. Every year many South African tourism businesses face a gigantic wave of seasonality, which, although thrilling and financially positive can also be just the opposite for a business, if the necessary precautions aren’t taken.
Many tourism businesses’ turnover at least doubles over the high season, with some even experiencing up to a ten-fold increase. “Some businesses may turnover R100 000 per month during the year, and R1 million over the high season, which – is a huge upsurge in business and often requires additional supplies, resources or staff.”, explains Nazeem Martin, Managing Director of Business Partners Limited (BUSINESS/PARTNERS).
The key to surviving the high season is thorough planning. A tourism business must be able to use its entire asset optimally in the high tourist season in order to survive and grow.
Business owners should therefore ensure that all equipment and infrastructure is fully functional and well serviced, as breakdowns in the middle of the high season could cost the business thousands in revenue. “For instance, those in the tour operator industry should ensure their vehicles are regularly serviced, while those in the hotel industry are advised to check that all rooms’ facilities are functioning correctly.”
Staff should also be well trained prior to the high season rush to guarantee high service levels.“This is particularly important for businesses that ramp up by bringing in extra contract personnel for the season. It is ill-advised to only recruit additional staff when business becomes too overwhelming. Not only will the new staff be expected to learn under very difficult circumstances, but guests will not be serviced correctly and ultimately the business’ reputation suffers as a result.”
If emergency appointments during high season are needed, business owners should ensure that the most experienced personnel are placed in the areas of the business with the most client interaction, while inexperienced recruits are placed where interaction with clients is minimal.
Business should also ensure that their planning includes a 100% occupancy scenario and that they are aware of the maximum number of clients that they can take on. “Some tourism businesses have a clear limit to how big they can go in the high season, such as accommodation establishments which only have a certain number of rooms they can fill, therefore making the planning relatively straight-forward. There are however other businesses with less of a clear limit, for example tour operators, which have to be careful not to over-trade during the high season.”
It is vital that business owners remember that when chasing turnover, the amount of working capital needed is also increased. “Business owners need to be able to fund the cycle. If the business runs out of working capital, it can cause the closure of a business.”
Tourism business operators should be encouraged to extend the length of the high season as much as possible by offering special offers to locals in the periods running up to and after the high season. “This allows business to benefit by tapping into a secondary market, as well as allows the business to ramp up, prepare its staff for the rush and iron out any wrinkles in your operation.”
Once businesses are caught up in the rush of high season, there are still ways in which business owners can ensure that they capitalise fully on all opportunities. Think of offering value-adding services, which can also be done in collaboration with other businesses. For instance, a guest house can facilitate a massage service or beauty treatments on certain days, an adventure operator can earn extra income by referring his clients to similar, complementary experiences.
Another way of optimising the high season is to offer a loyalty programme of some kind. “Of course, the most optimal use of the high season is when business owners provide their clients with a good experience that results in return business,” concludes Martin.
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