Be smart, be tactical

One can tide over the downturn by being efficient and innovative, says Ashwani Nayar

These are unprecedented crises which require unprecedented actions’. How many times have we heard this clichéd statement without a clue of what those unprecedented measures are. Before we seek the answer, we must first fully comprehend the threat and the opportunities associated with the slow-down, which is now a year old already. According to my simple understanding of economics and the business of tourism, the worst threat and best opportunity case scenario is:

Worst threat (WT) – Financial losses beyond your capacity to sustain will force you to sell out cheaply, or cut and close down your business.

Best Opportunity (BO) – You will gain from your competitors’ losses, lack of capability to sustain, closure, or, you may even be the one buying out cheaply.

The choice remains in our control, whether we become a WT victim or a BO winner. The end of the slow-down may not be predictable but one thing is certain – that once the dust settles, there will be many examples of both, with less of the latter perhaps.

Unprecedented actions are smart tactical actions driven by smarter strategic plans that include, but are not limited to, everything that you have done in the past to create a success of your business. Companies that are cutting down on cost, wastage, and are focused on increasing efficiencies, have a higher chance of survival than those cutting on quality of product and resource, sales and marketing, and such areas of investment that are critical to sustaining the business.

I say the above with a very strong conviction, having survived many tourism slow-downs as a sales and marketing professional in the hospitality industry, and, each time, survived with unprecedented actions, that is, doing what we were already doing, but with more efficiency and innovation.

My experience as an hotelier with the plague during the PATA Mart in New Delhi, wars in the Gulf and with our neighbours, decades of insurgencies in and around our country, stock market crashes, Asian economic crises, 09/11, the Mumbai terror attacks, and suchlike, have taught me some infallible lessons.

Firstly, tourism and hospitality are the truest barometers of the economic and political health of nations. During a recession, the first expenses that are cut in business or in personal budgets are related to travel. On the other hand, during an upswing travel becomes a necessity to boost trade. The impact is cyclic as it always has been; the upswing will happen, only, this time, the circumference may be bigger.

Secondly, never cut back or reduce your sales and marketing spend during the down-turn. It is during such recessionary times that, more than ever, we need to increase visibility; participate in trade events; communicate with our clients through media and advertising; leverage the strengths of our brand; go where our competitors are unable to reach and seek their accounts; increase our market coverage and penetration; innovate with value-adds and packages; concentrate on distribution channels and pricing; listen to the customer, and focus on customer retention. Remember that sales and marketing spends are investments that are as critical to your business as are product and people.

Thirdly, one of the biggest myths in our business is that lowered pricing will drive more numbers. Whilst I agree that a price correction sometimes works, it must not be confused with trying to gain market share by cheapening your product. Everyone loses a price war – the competitor, the client, and the customer – in the long run. In fact, I support every tactical promotion, value-add campaign, and special offers, as these are short term gainers without long term implications; they are time bound, quickly retractable, and easy to distribute.

Fourth, efficiency and innovation are the stairway to success. To successfully sustain your business during such crises, it is imperative that efficiencies improve with prudent utilisation of resources.

Critically examine your bottom line and make total accountability work as never before. Do not resort to saving costs by killing fresh and new ideas; the innovations that are born from ‘need and hunger’ are more relevant to overcome a crisis than any other. During my initial months in Kathmandu, we were faced with a crisis situation and massive cancellations from most of our international markets; it was during this time that we initiated the birth of the two-night-three-day package in Kathmandu, with standard value inclusions. In my personal experience, this remains one of the most successful examples of need based innovations.

And finally, relationships do matter. Ours is a peoples’ business, our survival depends on our relationship with our customers and our clients. Travellers are people, not numbers or seats. Attempt not only to make your customers satisfied, make them your Ambassadors. Successful businesses are built on strong client relationships wherein both work as partners.

Ashwani Nayar is a sales and marketing professional, and a certified Six Sigma Green Belt. He is currently general manager of Le Meridien, Jaipur.