4 Tips for Lowering Costs
Included in the many things that have changed drastically over the last few years are the rising costs of almost anything you can think of. Inflation and a higher cost of goods and services—combined with the battle to attract and retain top talent—have left businesses everywhere feeling the strain.
According to the CNBC | SurveyMonkey Small Business Index (Q3 2022), 28% of small business owners expect their revenue to decrease over the next 12 months (up from 21% in Q2), and only 33% say current conditions for their business are good (down from 36% in Q2). The index also found that 45% say their business is currently experiencing a rising cost in wages, while 76% report rising costs of supplies.
Throughout the travel industry specifically, execs and professionals on all levels have done their best to figure out how to continue to offer top notch experiences to travelers while also staying afloat and protecting their bottom line.
While there's unfortunately no magic wand or formula to solve all these issues, there are some strategies you could enact to help mitigate any negative effects while travel continues to recover.
Don't underestimate the power of collaboration and flexibility.
Think outside of the box and reframe your approach to conversations with suppliers and vendors. If you previously had a great relationship with a particular hotel but your contacts have since moved on, ask your new contact, "How can I be the best customer for you?" While it's not ideal to have to start from the ground up again in building these relationships, demonstrate that you're willing to work together to figure out how to move forward instead of expecting things to operate exactly as they once did.
Thrive in the unexpected.
Do some research on some lesser-known destinations that are able to offer the same or similar experiences to some popular destinations groups are used to. Not only could this ultimately save you and your groups money, it could also become a new favorite trip for many. If you want to stick with your go-to popular choices, examine what visiting in the off season would look like. Not only will you enjoy smaller crowds, but you'll also more than likely enjoy saving some funds along the way.
Determine what makes your business unique and figure out what factors help you accomplish that.
If you've already made cuts in seemingly every possible way and still find yourself feeling stretched too thin, take a hard look at what it is your clients value about your offerings. Is it being picked up for the airport at home? A special add-on at a popular attraction? Meals from exclusively local establishments? Good clients recognize that quality isn't free, especially if you offer a speciality service not easily found elsewhere. Examine what makes you stand out from the crowd and consider putting anything that doesn't help accomplish this on the back burner. Even if it perhaps ultimately passes some additional costs along to travelers, the right clients will recognize the value you're providing.
Know your options for assistance.
If necessary, assistance in most cases is available. You simply have to know where to look. Work with an accountant or financial planner to figure out where you may be able to make some strategic adjustments. They're likely aware of additional ways you could be saving funds that you may not have heard of just yet. In addition, explore available grants and loans available through the U.S. Small Business Administration, as well as potential state-specific COVID-19 relief funds. You may also consider utilizing the U.S. Travel Association's Federal Assistance Guide (available to U.S. Travel members) to explore your options in depth.
Written by Sarah Suydam, Managing Editor for Groups Today.
This article originally appeared in the Jan/Feb '23 issue of Groups Today.