Last Friday, Indonesia suspended visa-free entry and visa on arrival for one month. For most of the world, this was a single line in the news. For an island such as Nusa Ceningan, where almost all income arrives by boat from Bali, it means the boats are empty. Visitors still on the island are looking for flights home, and those who had planned to come are no longer coming.
We are following the situation from Montreal, twelve hours apart from the island, with updates arriving overnight.
The WHO declared a pandemic on March 11, two weeks ago. The WHO maintains its own timeline of its COVID-19 response for those who want the sequence of events. Presented as a list, the events appear orderly; experienced on the ground, they are not.
What happens to a tourism business when the tourists stop coming?
Most small businesses have some margin. In a slow month or a poor season, they reduce costs and wait. This situation is different: revenue is not declining, it is stopping, while costs continue.
A dive centre has boats, compressors, tanks, rooms, a kitchen and a crew. Equipment left unused in salt air deteriorates. Staff have rent and families to support, and the island has no other industry to absorb them.
Every tourism owner we speak with this week is asking the same question: how long will this last? Some estimate three months; others expect a recovery by the high season in July. The duration cannot be known at this stage, and confident forecasts should be treated with caution. We recommend planning for a longer period than seems reasonable; if it proves shorter, so much the better.
Why communicate with customers before having all the answers?
When the situation is uncertain, the natural tendency is to wait for clarity: for the government, for the airlines, and only then to write to customers.
We advise against this approach. Guests with bookings follow the same news, and silence leads them to assume the worst. A short message stating "we are aware, we are monitoring the situation, here is what happens to your booking, and we will write again on Friday" is worth more than a perfect message sent two weeks late.
Our recommendations for any small business this week:
- Write now, even if part of the message is that the outcome is not yet known.
- Set a date for the next update, and keep to it.
- Publish the same information on your website, your Google listing, your Facebook page and in your email newsletter. People check all of them and notice inconsistencies.
- Answer every message. A standard reply is acceptable if it is honest.
No one expects a business to know how a pandemic will end. Customers do, however, expect the business to remain in contact.
Why should staff be protected first, visibly?
This is the most important consideration, and it never appears on a website.
When revenue stops, the simplest option on a spreadsheet is to reduce staff. Sometimes there is no alternative. However, the order of decisions reveals a great deal about a business. Food, partial pay, keeping people housed, and assigning them to repairs and long-postponed projects: whatever the business can manage. We expect owners who prioritize their team to emerge from this period with a team. Those who reduce staff first and plan later will be rebuilding from nothing when travel resumes.
On a small island, this also reflects the business's place in the community. Staff are neighbours, their families know the owner, and the business will be buying fish from their relatives for the next ten years.
Guests notice as well. People who have dived with a crew they appreciated ask about that crew. Many of them will want to help, and it is worth preparing a response to that offer.
Should a business offer a refund or a credit?
Every tourism business we know faces the same question. Guests paid deposits, some paid in full, and now they cannot travel. Refunding them is difficult when that money has already been spent on fuel, salaries and a new regulator for the compressor.
Flexible credits are the most evident solution for many businesses: the booking keeps its value, the dates change, and no fee applies. For many guests, this is acceptable and even welcome, because they intend to return.
In Canada, airlines are applying credits on a very large scale, issuing travel vouchers instead of refunds for cancelled flights. Yesterday, the Canadian Transportation Agency issued a statement indicating that vouchers can be a reasonable approach provided they do not expire too soon, and it cited 24 months as reasonable in most cases. Public frustration is understandable, as is the fact that an airline without passengers cannot refund every fare within a week. We nevertheless advise small businesses not to adopt the airlines' tone; a small business does not have their scale to rely on.
What makes a credit fair?
A credit works when it is generous and clear: no expiry date that falls before travel is realistically possible, transferable to another person if the holder cannot use it, documented in writing with the amount so no one needs to remember it a year later, and, when someone is in genuine difficulty and needs the money, a willingness to find a solution, even gradually or in instalments.
A credit that cannot be honoured is worse than an honest statement that a refund is not possible at this time. If the business's survival is uncertain, selling customers a promise for next year places their money at risk, not the business's.
Why build a basic crisis plan this week?
Many small businesses in Quebec also depend on seasons and visitors: cottages, outfitters, restaurants, and shops that earn half their annual revenue in summer. Since yesterday, most of them have been closed by order until at least April 13, a date few people here consider final.
If this has not yet been done, we recommend doing it now, even in a basic form: a list of every current booking with an email address, a method of posting the same update on your website and your Google listing within five minutes, and an outline of what you will offer customers whose plans cannot be honoured. It takes an afternoon.
Most businesses are building this from scratch during the most difficult possible week. It is nonetheless worth building, keeping on file, and retaining after the crisis has passed.