Tag Archives: Cost cutting

Some tourism operators are not taking the internet seriously

cruise
Cost cutting by removing your tourism website is not the answer

Isn’t it frustrating when you see some tourism operators dismiss the value of an internet presence when most travellers are now using the web and social media to plan and book their trips?

Consider this recent example.  A cruise operator that takes passengers on wilderness cruises through a remote part of Gippsland surrounded by a rugged national park (we won’t name them here to protect their privacy) has had their details and website listed on many tourism websites including that of Parks Victoria. Recently, the cruise operator’s website went off-line, so we found their email address and alerted them to the fact.  The reply we got back (we’ve edited it for clarity) is below:

Unfortunately our web site has been discontinued –
not enough hits to justify the cost

What an unexpected reply!

Firstly, the cost of a .com.au domain name, plus simple web hosting with a reputable Australian provider, will set the cruise operator back around $70 per year. How can this tourism business justify removing their internet presence to save the tiny annual website operating cost of $70? You may wonder how many thousands of dollars they were instead spending on brochures to put on the shelf of the local visitor information centre or the big bucks they were splurging on colour newspaper ads.

Secondly, their statement that the number of hits didn’t justify the web presence is unqualified. How many hits did they want? Looking at the counter they used to have on their website, we estimate they got about 1,000 visitors (real people, not web robots) per year.  For a small operator in a remote area, that’s not too bad, particularly as there’s much potential for future growth if they start doing some more active promotion on the web.  All they needed was the right people to come across the website, and they could have had booked out cruises galore.

Let’s be really clear about this – an internet presence in the form of a website is one of the cheapest ways of giving your tourism business exposure in the travel market.  Once you have a website, people will have something concrete to reference on related websites. Here at Travel Victoria, we showcased their business on our tours and cruise pages, for free, giving them good exposure. Now we have nothing to link to, so their listing gets deleted as we have no authoritative source of information to present to our website visitors.  Same goes for social media.  People who want to discuss or share details of this amazing cruise through one of Victoria’s most pristine wilderness areas simply have nothing official to refer others to. People want to instantly see the cruise schedule, costs and photos of the journey so they can see if it is of interest to them.  The cruise operator’s website could also be used to inspire other people who wouldn’t normally do that sort of thing to actually experience it.

With the low cost of domain registration and website hosting, tourism businesses should consider an internet presence as being mandatory for their survival. The last thing they should be doing is wielding the cost-cutting axe to save a tiny $70 by killing off their website and effectively their entire internet presence.

Penny pinching can drive your customers away

Cost cutting
Schemes that cut your costs could also cost you customers

One of our busy local restaurants has been implementing a number of cost saving measures in order to eliminate what they perceive as dispensable expenses. Their latest idea has seen all EFTPOS and credit card facilities removed, requiring customers to pay cash only, thus saving them fees on the EFTPOS terminal and their credit card merchant facilities.  If you don’t have enough spare cash on hand to pay your food bill, they have a non-bank ATM outside their door which you can use for a $2 fee.

In the grand scheme of things, a busy restaurant like this is not going to save a huge amount of money with this cost cutting idea, especially when you compare the savings to their good income levels. However, this scheme may in fact cost them business in the long run.

What is starting to happen is that people are thinking twice about eating there, particularly if they don’t carry enough cash on them or they are paying for a family or group. Not only are they then inconvenienced with using the ATM outside the door to get money to pay their bill, but they are being slugged $2 to do so.

The actions of this restaurant might save a small amount of money in the short term, but it is unlikely to off-set the business they lose by imposing such a restrictive scheme that is guaranteed to alienate some of their customers.

The are many examples of other businesses adopting harsh cost-cutting schemes. You only need to look at some budget airlines that charge you fees well in excess of their actual expenses if you pay your fare by credit card. Then there are those airlines that make you pay a hefty surcharge to select your seat at booking time rather than when checking in at the airport, which surely can’t make any more work for them, but is simply used as a method of raising additional revenue at no cost.

When you look at our website advertising rates, you could well be forgiven for thinking that Travel Victoria is also a low-cost, penny-pinching operation, intent on slashing to the bone any expenses and trying to extract the most money out of our clients. In fact, we are quite the opposite, as we know that the best way to alienate your clients is to hit them with additional fees and charges on top of what they expect to pay.

  • We do not charge fees to pay accounts by credit card.
  • We do not charge a fee to have renewal invoices printed and posted out rather than emailed.
  • We do not charge fees to update any advertisement with us. We make updates for our clients as often as they like, at no cost.
  • We use one of Australia’s fastest and most reliable web hosting providers on their highest level of service plan, thus paying a premium cost to ensure any business listed with us has the best web presence possible.
  • We do not outsource any work related to running Travel Victoria to people or organisations outside of Australia in order to cut costs. Everything is done locally.

It can be quite easy to identify areas where your business can save money. However, it is very important to keep in mind that the effect of implementing such savings could actually drive customers away, thus costing you significantly more than the actual savings you make in the long run.