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Recession proofing a tour business

what credit crisis

Some will say that this is not an easy time to be running a business and certainly conditions are not as kind as in previous years but small companies can help themselves by doing the basics well.

Some sectors of the travel industry will find the recent downturn harder than others. Foreign holiday providers and particularly those offering trips to some mainstream European destinations, will indeed find it tough. There have of course been some high profile casualties both of mainstream holiday companies and in the niche stag and hen market.

Now is the time to revert to basics and concentrate on keeping service standards high.

A good example of this is to focus on your core destinations and make sure that every conceivable detail is covered. There has been a tendency in recent times for operators to try and cover all possible bases by offering every destination under the sun. Often this is just a direct copy of the destinations list of the low cost airlines and not because they have particular expertise in these locations.

It doesn’t take a lot of reasoning to work out that the sheer logistics of having a quality supplier network in each location is going to mean that such organisations are going to struggle with their costs and therefore so will their customers. Unreliability of service delivery is an inevitable side effect of this mud at the wall approach; trying to be Jack of all trades but really master of none.

In tougher times it is reasonable to assume that suppliers will be happy to review terms and get the business. There is a real threat of deflation within the wider economy and therefore everyone has to realistic about pricing. A good tour operator acts on behalf of his clients to get the best deal which he can then pass on to his own customers. Such price negotiations can be a thorny topic with suppliers as nobody wants to take advantage of a difficult trading environment but surely it is better to have some business at lower margins than none at all.

Good personnel are key. It is absolutely crucial to have knowledgeable and dedicated people on board when conditions are difficult. Industry stories of poor recruitment and resulting bad advice are numerous. It makes sense to question the quality of advice that you will get from a young girl on the end of a phone in Brighton about a stag weekend for thirty year old men in Bristol.

The same can be said for having too many people on board. Large teams have more mouths to feed. Beware if someone refers you through too many line managers or departments. Your custom has to fund all this bureaucracy. A recent CV from an insolvent company ‘Hotels contract manger/ Southern Ireland Area’ caused me to reflect on this issue. There was only one person benefiting from that position and it wasn’t the company or the customer... To be sure!

No company has a guaranteed future but the bottom line remains the same in a most businesses; if you look after and value your customers you give yourself a much better chance.

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