Peter Syme (MD and Advisor at Disrupt Travel) spent his youth reading books and magazines about travel. He was born in Scotland in an area with limited career prospects as heavy industries were beginning to decline. After learning of the far-off places he would never seen or been, he took his strong work ethic and enlisted in the army at the age of 15 in order to see the world.
Decades later, Peter is a well sought-after advisor and expert in the travel industry, as well as a fountain of knowledge for tour, activity and attraction operators.
Peter is Livn’s guest in our first instalment of the 'Livn it up' series. Together with Steve Martinez (Founder & CCO of Livn) and Chetan Kapoor (CSO of VIDEC), we will explore Peter’s journey and lessons he has learnt along the way.
Are there are any life principles you learnt in the army that you have carried forward in other parts of your career?
I went into the army with a good work ethic, but faced many failures. You deal with failure a lot and you learn resilience. In my opinion, there isn't anything better in the world to have than ultimate resilience. If you can get back up after being beaten down or keep on going no matter the challenge, that will serve you well.
You left the army and jumped into finance. Being two polar opposites, how did you get from one to the other?
I left the military because I had a young family and worked in bomb disposal which is a fairly high risk area. I had no idea what my next career would be.
I knew I wanted to be self-employed and work for myself, but I didn't know anything about finance, marketing, or business. I knew I would fail if I jumped straight in, so my first job helped me learn the basics of business and find my feet.
I ended up as a commodity trader and it taught me a lot about margins. We always think margins are tight in tour industry, but they are not tight compared to the margins handled in trading. In that job, I learnt the basics of P&Ls, budgeting, and finance - which were very useful in my travel industry career.
After 6 years in the commercial world, how did you transition into the travel industry?
In 2002, I was working in a senior position for a public listed company (PLC), and it was the start of the internet and e-business. I ended up being in charge of digital. When this role was ending, I decided to work for myself. I chose travel for obvious reasons; it involved adventure and I could see it was growing.
I purchased a white-water rafting company in Scotland. It was an exciting time to join a travel business because they were miles behind the commercial world in terms of technology.
When you first started, what did the landscape look like in terms of marketing for the white-water rafting company?
From an operational perspective, it was a good business, but like many travel businesses, there wasn't a good marketing focus. It was all offline. It was a lot of grassroots, local marketing, face-to-face meetings and hard copy brochures. Our international customer base was around 10% of total sales.
Looking at the landscape before COVID-19, what would you say was the balance of your bookings (local vs international and OTAs vs Direct)?
Before COVID-19, local to me was 50 miles from our location, today it is all the UK. Previously, local represented less than 4%, the UK 30% and everything else was international.
In terms of channels, we have been using OTAs for over a decade, but they always represented a small percentage of our sales because of our strong direct marketing. At the peak of OTA distribution, they represented 18% versus 82% direct sales. Now, we are at 99% direct and 1% through OTAs.
How can companies ensure if they are here now, they will remain open, particularly through challenges and disasters like COVID-19?
One of the reasons that companies I have worked with are successful is because we have a digital footprint that is now 20 years old and quite hard to dislodge. We dominate Facebook marketing, among other things.
My focus was always on building up a digital footprint backed up with a partner network to have resilience. It's not just people you build resilience into, you have to build resilience into your business model.
I have seen disasters all the way through my travel journey, not just on a full global scale but also regionally and even locally. In travel, you must be planning for disasters all the time because it's always around the corner.
You have been a big advocate and help to operators and businesses, particularly last year. What are the common threads in digital distribution?
I had assumed that a lot of operators had been around for a long time, but my recent experience has shown me that's not true.
Many operators have just been established in the last five years. A lot of these individuals coming into the travel industry, as I did all those years ago, do not have travel industry experience.
As we know, travel is an incredibly complex industry and many don't understand the very basics of distribution, connection, technology, and who to speak to. So, it's an extremely difficult journey for a new company to start up.
What is the number one task that wastes the most time and money for new operators?
It's definitely reinventing the wheel or doing something that another 100 companies have already done. I still come across companies or small operators from U$100K per year to U$1M trying to build their own bespoke technology. They might get something that does a really good job, but it's not going to work for them in the long term. It's not sustainable.
A lot of time is wasted, and there is also an overreliance on distribution and partnerships. Many people think that if they hook up to TripAdvisor or any other major distributor or partner, they can focus only on operations. That might be true if you are in a popular city centre - like Paris or London - or have a very specific high-demand product, but it's not true for many businesses.
They have to learn the basics of marketing and a lot of operators don't like marketing - they like operating. However, over-relying on distribution is a massive weakness.
We still see operators focused more on operations than marketing and sales. Why do you think this is?
It's certainly the case in a lot of operators. If you are going to run the best operation (the best team and inspiring customers), you need a partner whose passion is business, marketing, distribution, and sales. It's virtually impossible to do both these days.
In today's world, you need someone in your business who is 100% focused on digital, because for all its benefits, it is complex. One of the weaknesses of digital is the constant learning journey and if you are focused on operations - as you should be - then you have no chance of learning what you need to.
If you were going to start your business today or offer advice to operators, what would you say?
A few things come to mind…
Tip 1: Get your financials and pricing right
I think the number
one is to get your finances and pricing right - nothing to do with technology
or efficiency or anything like that.
How did half of the people who have established their business in the last five years develop a pricing model? I bet you that they just looked at what others were charging. But they often realise they set the wrong price or margin, and then it's hard to increase their price.
Operators should set their prices at the top end (not bottom) because technology comes at a cost and there are different layers to it, including who will be managing it and the systems you will be using.
Tip 2: If your product can be digitised, it will be
There's a lot of conversation in the industry about digitisation and
the truth is, if your product can be
digitised, it will be.
If I'm taking people down a river, I need a guide, equipment, and legislation, so it's unlikely to be digitised. However, it's easier to digitalise a history tour of Edinburgh. With AI technology, perhaps this will involve questions in real-time or interactiveness. When this happens, product prices will probably reduce.
That's why I say bring your prices up, because when your product digitises, that price is coming down, and the margin may go out, so it then becomes a volume game.
Tip 3: Don't confuse efficiency and effectiveness
I have also always tried to advise that you shouldn't mix
efficiency and effectiveness. Every technology provider will tell you that they
can make your business more efficient. But what are the outputs?
Sometimes what makes your business efficient was not effective. For example, in my operation in Scotland we still do a lot of non-digital because we make more margin by being bespoke non-digital than just selling tours online with the press of a button.
We found that putting a human in that conversation means the conversion rate and margin go through the roof. Your 'human resource' may be expensive, but you know the cost to the business. If they are generating ten times more sales, it doesn't matter if you have the latest piece of technology there.
We hear you are stepping out of the operations game soon, is that right?
It’s probably my time to step aside and let the younger guys take over and go for it. My focus will be working with the industry in an advisory or consulting role and seeing how I can assist.
I've sold my business and will be exiting the company at the beginning of this year (2022). Maybe, when we get back to international travel, I might restart my expedition business. That could be exciting in a few years on.
What advice would you give to the new owner of your previous business and other operators around the world?
The new owner has actually been my operations manager for years, so he knows the business inside out.
More broadly, I think everyone is focused on the bad right now as we have been through a tough time, but you’ve got to get above that and look at the future!
Travel is going to come back in a big way. Millions of people are wealthier, they are not as career-focused as before, and attitudes have changed. They realised life is for living. This combination is the biggest opportunity I have seen in travel since I have been on the planet.
In hindsight, what would you tell a 15-year-old Peter after seeing everything you have done?
Go faster! Drink more, party more, don't worry about your career because life is incredibly short and you're here for less than a second. Live life how you want and look after as many people as you can without worrying about jobs and stuff like that. Find your passion in your life and what you want to spend your time doing. Make sure you try and do it at 110 miles an hour.
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A huge thank you to Peter Syme for sharing his experience, insights and tips. Stay tuned for the next instalment of our new series,