Written By: Jackie Friedman, President – Nexion Travel Group
There is no denying we’re in unprecedented times, and the impact to the travel industry created by COVID-19 is going to persist throughout 2020 and likely beyond. The silver lining is the travel industry is strong and takes care of one another, so like other industry disruptions in the past, we WILL get through this. It will take some innovation and adaptability on everyone’s part, but together, we can do this.
I wanted to share with you some tips we recently chatted about with our Nexion Travel Group advisors on ways you can protect your business, your passion and your clients, so you can endure these challenging times. I hope you will find a few of them to be useful.
The key to surviving a business turndown will be to review every aspect of your current revenues and expenses, and have courage to be bold enough to challenge yourself to change. If you’re a member of a host travel agency such as Nexion, your fellow travel advisors, supplier partners and host agency staff are available to help.
The Importance of Focusing on the Positive
I know it might seem easier said than done, but I encourage you to stay positive. Whether it’s chocolate, wine, yoga, a walk in the sunshine or talking with friends, find your happy place when you’re starting to feel overwhelmed or down. Things are tough right now, but remember that there will be pent-up travel demand, especially for leisure travelers, and it will pay off in the long run.
Plus, as a customer advocate, your clients will remember you when it’s time to travel again. Can Costco and the online travel agencies do what you do? You place your customers’ best interests first. You keep them informed. Being the best advocate for your clients makes you stand out in the crowd, and your efforts will make a difference!
Managing your Business and Cashflow
Two things that are critical to surviving a business turndown is to reduce and slow down cash outflows and to increase and speed up cash inflows. So, for some of the things you pay for, really stop and think, “Do I need these things?” Are there certain suppliers and vendors that you work with for some of the expenses in your business that may give you a bit of relief? Consider reaching out to them and tell them what’s going on. They may allow you to take an extra month or two to pay. It’s certainly worth having those conversations.
At the same time, increase the speed of cash inflows. For example, look at commissions that you haven’t received yet, do some digging to see where those might be and reach out to those suppliers. Also, ensure you’re collecting money coming in from your customers for trips that you’re booking.
A third tip to manage your cashflow is to position your business for the current business environment. The fact is none of us really knows what that is. But you can look at your budget and see where you might be able to make adjustments to help manage that cashflow. Be sure to review every cost of operation. For example, you may have costs such as monthly rent if you’re in a brick and mortar or office share. Is now the time to look at moving home?
Perhaps there are items such as office equipment that you can lease rather than buy or buy used. Reduce discretionary spending and pay payables later, if you can defer them. Think about holding off on those items that may be nice to have and not need to have. Are there services you subscribe to that may not be essential to your business?
Things to Consider if you Have Employees
Some of you might have employees, and there are initial opportunities worth investigating. These types of actions are never easy, but if you do have employees, consider:
- Are any of them possibly interested in unpaid leave of absence?
- Are there individuals who may be willing to voluntarily scale back their hours?
- If you must reduce payroll, always try to reduce hours before reducing salaries. If you’re expecting people to work for less, then you can’t expect them to work more hours.
Never Let a Good Crisis Go to Waste
After the dust settles from dealing with cancellations and rebookings, take some time to focus on proactive revenue-generating ideas and actions that position your business for success. There is no time like now to step forward and showcase the value you have as a travel advisor. The fact is, that an uncertain environment offers opportunity for selling more security.
Note, too, that travelers often spend differently after a crisis – their priorities change. They want to travel. In some cases, the decision was taken away from them and in others, they have made the decision, but they may want to still travel. By positioning yourself as an expert, people will turn to you. And you’ll be ready when we all get over this hump.