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The hopes and fears of small travel businesses

November 14, 2017 Headline News 1 Comment Email Email

One in 10 small travel business owners can’t see how they’ll stay open beyond this time next year – and twice as many are thinking of giving up on their business altogether, according to research made public today by American Express. However the survey also uncovered more encouraging findings!

The research was commissioned by American Express to support its Shop Small campaign, released today, which the company says reveals the hopes and fears of small businesses across the country.

The research reveals rising energy prices are keeping smaller travel business owners across Australia awake at night. They’re also more worried about other costs and overheads than the challenge of finding and retaining customers.

Keeping the travel dream alive

Findings include:

  • More than half (62%) of small travel business owners are extremely concerned about rising energy prices, in line with their concern around managing costs and overheads (62%).
  • One in three said that their least favourite thing about running a small travel business was failing to keep up with increasing customer expectations and the stresses that come with being your own boss
  • Around a third (31%) feel under threat from large online businesses and a similar number (33%) are concerned about larger bricks and mortar rivals.

Now for some encouragement! Despite these challenges, most small travel business owners are content with the path they chose and 72% would set up shop again.

When asked what they like best about running their own business, more than half said maintaining work/life balance, followed by achieving a sense of fulfilment and the ability to control their own destiny.

The vast majority of small travel business owners are committed to their business, though sadly, as we reported above, 10% can’t see how they’ll stay open beyond this time next year and 21% often think about giving up on their business.

American Express’ vice president for small merchants, Katrina Konstas, said huge opportunity existed for small businesses to capitalise on technology innovation to support their success: “Small businesses need to focus on what’s important for their customers in this new digital age, and offer that unique, personalised customer service that the big end of town can’t. If they don’t act now, there is a real risk small businesses will be left behind.”

Never mind the altitude, the scenery’s great!

When there is such fierce competition continually entering the market, it is a concern small business owners aren’t prioritising investment in technology to meet customer demand.

According to the research, consumers believe that technology offers greater convenience, with the majority saying a basic website is the most important tech investment for a small business. This is followed by online sales or booking functionality and social media channels.

Yet strangely, only 52% of small businesses have any form of website, with 24% saying they have no intention of ever getting one. On a positive note, almost half of small businesses use social media marketing and a further 24% plan to do so. 27%  expect to incorporate more technology into daily operations and 24% are targeting increased online sales.

Konstas added, “Ensuring small businesses have a good website and social media profile means they not only protect their customers, but gain further reach and opportunities for referrals, so they thrive for generations to come.”

Owners cite funding, lack of time or technical expertise as the biggest barriers to implementation. The exception is casual and fine dining businesses, which have embraced sites like Deliveroo, Foodora and Menulog to introduce or widen delivery services.

The research also revealed that rising energy prices (55 per cent), and managing costs and overheads (53 per cent) are what’s weighing most heavily on the minds of small business owners this year. This differs from 2016 where attracting and retaining customers was the number one concern.

Konstas summarised, “While energy costs and overheads might be keeping small business owners up at night, it’s important they don’t lose sight of how they can keep their customers happy and loyal. That could mean investment in new ways to attract and retain customers, or finding additional distribution channels.”

“While small businesses have a way to go in adopting technology that meets consumer demand, I urge all Australians to support them. With almost one in 10 unable to see how they’ll stay open beyond this time next year, and a similar number often thinking about shutting up shop, Australians have a crucial part to play to ensure we have thriving small business communities in the future.”

“The Economy of Shopping Small: Keeping it in the Community” research was commissioned by American Express and undertaken by AMR, a leading provider for international B2B research and advisory services.

In order to understand the current trading environment for Australia’s small business, researchers focused on recruiting respondents from seven selected industries: Retail (fashion, food, services), Dining & Drinking, Travel, Professional Services and Healthcare services. Each individual participant had to be:

  • A small business owner (fully or partially) who spends at least eight hours per week working in their business is are the key decision maker within the business;
  • A small business owner who has owned the business for or more months;
  • Owner of a business with annual turnover between $50K and $2m;
  • Owner of a business with 0-19 employees (not including the owner);
  • Owner of a business not solely online;
  • Owner of a business not solely B2B (i.e. it has private consumer customers).

An online survey of about 15 minutes was completed by more than 500 (548) respondents, with the fieldwork taking place between 25 September and 30 September 2017, with recontact of 302 responds for two additional questions happening between 6 October and 9 October 2017.

In addition, feedback from business owners was compared and contrasted with responses from 1033 members of the general public (aged 18 years or older), who also completed an online survey of about 15 minutes. Respondents were selected and weighted so the findings were nationally representative of age, gender and state. The fieldwork took place between 22 September and 28 September 2017 and on 11 October 2017.

Edited by Peter Needham

Currently there is "1 comment" on this Article:

  1. AgentGerko says:

    As a small agent that has been running my own concern for 29 years, my greatest stress is the unyielding, bullying approach of the airlines. It’s as if they assume that agents are all out to cheat and that even human errors are totally unacceptable, unless of course they’re done by them, in which case the agent just has to wear it. It’s nothing like the friendly working relationships that agents and airlines had when I entered travel 40 years ago. Back then, we were partners. Now that’s jut a term the airline throw around that is in actuality totally meaningless.

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