The Ghosts of Crises Past, Present, and Future
By Doug Gollan Editor-in-Chief & Founder, DG Amazing Experiences - Private Jet Card Comparisons | June 28, 2020
For many of us who have been around in the travel industry long enough to have some gray hair, we recall the Great Recession of 2008, the double hit of the Dot Com Bubble and 9/11, the Asian financial crisis, and the first Gulf War in 1991. All of these events temporarily traumatized and challenged the travel industry, sending some sectors, more than others, into panic mode.
Yet, no matter how dire the situation seemed at the time, each sector eventually recovered, and in some cases, they came back stronger! That may be nice to hear but almost certainly offers a small amount of comfort when one is the middle of a storm-revenues are plummeting, collections are in arrears, cash-on-hand is dwindling, employees are being laid-off or furloughed, access to more capital is limited or closed altogether, and monthly expenses are mounting alongside unpaid bills.
For me, the past informs my business decisions and my outlook, and I'm in a more confident position this time around. As a small owner-operated media company serving the private jet card and, by association, the hotel & hospitality industry, we were born out of lessons learned from the past. We are a solely digital enterprise and already work remotely. We also are cross-trained, operating more efficiently and making good use of the gig economy: the era of having personal assistants or corporate IT support to figure out what's wrong with a computer has been replaced by help lines, outsourcing, and trips to the Genius Bar at a local Apple store, before the stores shut down, that is.
It helps that both DG Amazing Experiences, our weekly e-newsletter to private jet owners and Private Jet Card Comparisons, our buyer's guide to private jet membership programs, are both targeted to the Ultra High Net Worth market. It became clear early on that the Coronavirus doesn't discriminate and, as such, the behaviors of this coveted demographic, like with all other demographic groups, has changed.
Almost three months in, still, we're seeing a continuation of seismic drop in trips to luxury hotels and resorts by these individuals. Holidays are being replaced by private flights to evacuate family and business associates, while taking trips to second homes. The exodus from cities to beach resort towns and country escapes continues. Summerlike swells in population have overtaken many of these communities, in most cases before local business owners have staffed up to handle the surge.
Almost immediately after news of the Pandemic's early effects and warnings broke, we sent a flash survey to our subscribers asking them how the crisis is impacting their immediate private travel plans as well as their plans for the next 90 to 120 days. As well, since most of these folks are considered influencers, both professionally and in their personal lives, we were curious to know where they believe things might net out for the year as compared to what they had been expecting beforehand.
We got some good news sent back to us! While 39% had canceled private jet trips because of Covid-19, 36% had scheduled extra trips because of it. Prior to the pandemic, virtually all subscribers expected private flying to be up or flat for 2020. Now, according to the survey, it's evenly split between up, flat, and down. Only 3% said they had already canceled summer vacation plans and are unlikely to reschedule even if things recover. In other words, at least for now, these travelers (a unique bunch, indeed!) still intend to keep their plans, suggesting strong hints the market will get a jolt from pent-up demand when businesses reopen.
Initiating the survey had multiple benefits. First, the survey in itself is a tool that wasn't easily available to us in the past. Our $350 annual subscription to Survey Monkey combined with our own subscriber list made it possible for us to get the survey set-up, then push it into the market and glean results in less than forty-eight hours. Then, for less than $1,000, our PR firm posted the results in a press release on PR Newswire.
As a result, we generated pick-ups by 137 media outlets and landed a few full features as well. In addition to the coverage, we generated backlinks to our website from highly ranked outlets, which will strengthen our position in future SEO rankings. This is just one example of how taking initiatives to learn about the quickly changing marketplace, and sharing the information, led to other opportunities, which, long term, when we're on the other side of the crisis, will put my business into a stronger position.
In terms of sales at our media company, paid subscriptions (we charge $250 per year) for our private aviation membership guide had surged thru mid-March 2020, running 100% ahead of 2019 on a year-over-year basis. Then, it trailed off significantly in the second half of the month. Revenue from advertising sales fell precipitously as hotel partners understandably pulled back, while simultaneously, several companies who had indicated an interest in starting programs also put on the breaks. We know that in at least case, one of our partners was forced to lay-off 90% of its workforce.
Of course, much of how we respond today is based on what we learned from past experiences. As an airline editor in a former life, I will never forget something I witnessed following the first Gulf War. I recall how British Airways rolled out The World's Greatest Offer, giving away 50,000 free tickets! They launched the program just days after the war ended. What was so apparent was that BA, in the darkest of days of a foreign policy crisis, wasn't sitting around worrying they'd never see their passengers return.
To the contrary: they anticipated the end of the war, used the time wisely to be creative, and were ready, immediately upon the war's end, to inspire fliers to return to the skies. It worked! So, this isn't the time to sit around. Now is when we all should take a good hard look at our businesses, know that we'll re-open soon, and plan for the better days that are surely ahead.
Fortunately, the publication I served back then had a similar long-term view. We didn't cut staff or cut salaries, even as ad revenue plummeted. We kept producing high-quality editorial and asked our sales team to engage with customers, not just for the sake of checking in, but to be consultative with them; to brainstorm and become solution providers. Some competitors charged penalties for early contract cancellation. We offered to defer payments. Who do you think they remembered and wanted to work with when the crisis lifted? Within three years, we grew to be one of the five largest magazines in the world measured by ad pages.
Likewise, after following the 9/11 terrorist attacks, our investor kept the pedal to the medal, holding on to staff and conducting business as usual, at least in terms of optics. We were just a young publication at the time, one that might have easily shuttered after the attacks. But since we stayed with it, within just a few years, we grew from being a start-up to a $15 million business, relatively significant for a niche publication with six issues per year.
Like many of you in the hospitality industry-whether a hotel/resort, a marketing agency, a media company, or a link in a supply chain-the most important lesson is to stay focused on the clients and best practices that brought you success prior to the crisis. Now is a good time to invest time in your biggest clients. If you must layoff some of your staff, remember to hold on to your best people: your competitors want them. And, before cutting a vendor, first consider how such a move might impact their business. If they go out of business, and they provided value to your enterprise, replacing them may be simple, but the value they delivered may not be as easy to replace.
If the world comes to an end, cost cutting won't save your company. However, even without a crystal ball on my desk, I'll go out on a limb and predict that business, and life, will still be with us. Things will be different. By design, and out of necessity, behaviors and attitudes will shift. Technology will continue to play an ever-greater role, helping us to approach things in entirely new ways. Undoubtedly, there's a lot we'll be surprised by. From where I sit, there's also a lot to be hopeful about.
Keep your eye on the ball. Prepare today for a new and better tomorrow. Observe new consumer behaviors and business trends. Keep your staff close. Pay attention to supply chains. Most importantly, be creative, be useful, and keep the faith. These are the things that will positively impact your future.
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