Well, what a year it’s been – and the tourism industry has been one of the hardest hit. Among the casualties, the once-booming industry providing accommodation for holidaymakers or businesspeople. The recent news that South Africa is now open to some international tourists is good news, but it will take time for the numbers to pick up – the impact of lockdowns around the world is hard to predict. In the meantime, many property owners are dropping prices to attract local tourists, especially now that that business travel now seems likely to be permanently affected.
But while building up a local clientele makes a lot of sense in the long term, cash-strapped hosts may be tempted to skimp on overheads to maximise their reduced profits.
Before we consider today’s realities, let’s just take a moment to recall just how successful one of the most successful hosting platforms, Airbnb, has been. Figures show that from 1 June 2017 to 31 May 2018, South Africa’s Airbnb hosts and guests generated an estimated R8.7 billion in economic value – and created around 22 000 direct and indirect jobs. The figures would be much higher if one took into account all the other hosting platforms, of course.
To save this enormous industry and its potential, cutting costs will be necessary but the process must be highly selective. Property-owners should carefully consider the impact of cost-cutting on their brands in the long term, and the potential risk to which it could expose them.
Specifically, both marketing and insurance can seem like prime targets for cost-cutting, but the impact could be devastating. Marketing is essential to the long-term survival of any business and if costs need to be cut, then lateral thinking is needed to keep the property’s reputation alive. Various social media channels can be used to great effect for the expense of a little effort, for example.