By: Zeb Smith, Zebulon LLC & Pat Tabor, Swan Mountain Consulting Group
What issues and concerns weigh heavily on outdoor recreation company owners and CEOs going into 2023? This was asked during the CEO & Owner Connect at the 2022 America Outdoors conference. This article summarizes the top concerns and potential fixes discussed during the session.
How was the information collected? Approximately eighty outfitter owners and CEOs were randomly disbursed across eight tables. Each table identified the top three issues facing their outfits. Each table brainstormed initiatives to address each issue. Each table took notes which were given to the facilitators, Pat Tabor and Zeb Smith. The facilitators accumulated the information and shared the results with the whole audience. Despite the audience being split into eight groups, almost all groups reported the same issues and a wide array of possible solutions to try.
Issue #1 – The Economy
The post-covid economic state is a concern. This includes inflation, rising costs including but not limited to payroll, insurance, and fuel, a looming recession, and a drop in consumer volume.
- Raise prices.
- Get back to the basics – Act as if you are starting from scratch.
- Collaborate with other outfitters and agencies at the local, regional, and national levels. Simplify trip offerings and trim the fat.
- Find operating efficiencies.
- Expand low-cost offers like photos and merchandise.
- Be intentional with spend (as Zeb says treat every expense like an investment).
- Build contingency plans in preparation for worst-case scenarios.
- Stay relevant and in front of customers with proper PR messaging.
- Offer gift certificates or alternate trips as opposed to issuing refunds.
- Change payment policies to not collect payment at the time of booking.
- Charge a 10% cancel protection fee or require travel insurance.
- Charge fees or surcharges to offset increasing costs (ex: credit card fee, energy surcharge, recreational use fee).
- Focus on direct bookings.
- Pat shared, “question every expense line, and ask: Does it increase revenue, reduce expense, mitigate risk or enhance the customer experience? If the answer is no to all those, then why spend the money?"
Issue #2 – Employee Staffing
Many factors that impact staffing were identified. Specific concerns include employee housing, managing wage costs, and competing with job offers and career opportunities outside our industry.
- Set clear expectations before employment, during the hiring process, and through the end of the season.
- Increase wages (One group suggested up to 20%).
- Offer benefits including profit share, year-end bonuses, referral bonuses, paid-for training programs, and guaranteed days off.
- Collaborate with other outfits or seasonal businesses to “share” employees.
- Build a strong company culture by promoting peer-to-peer recognition, focusing on operational excellence, and being aware of mental health in the work environment.
- Staff-up to properly schedule and offer work-life balance.
- Raise prices to meet increased wages.
Issue #3 – Pricing Experiences
Considering the economic and staffing concerns, many owners believe their current prices are not serving their business well. Outfitters across the nation generated strong revenue numbers in 2022. Unfortunately, steady continued wage increases, sudden and steep increases in non-payroll costs, and a return to pre-pandemic customer volume left many outfitters with sub-optimal to negative net profits. Outfitter owners and CEOs are concerned the needed investments in employee recruitment and retention efforts coupled with an expected 20% to 30% increase in non-payroll costs in 2023 will force them to go broke unless significant changes are made to their prices. There was genuine concern about raising prices with a recession looming. Will the industry have to revert to discounting to attract business like in the last recession?
Unfortunately, no specific strategies were brought forth by the participants to help outfitters raise prices. Zeb encouraged attendees to join the Outside In-Crowd Facebook Group where he frequently posts resources, articles, and links to help outfitters price their trips and experiences. Also, Zeb has written an article for the America Outdoors news section that will delve into pricing. Keep an eye out for it as it will ‘drop’ in the coming months.
About the Authors
If you’d like to address these issues in your outfit or simply connect with the facilitators, then you can reach Pat Tabor at email@example.com and Zeb Smith at firstname.lastname@example.org. Both Zeb and Pat have a number of tools and articles that address the issues discussed above, so reach out!