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'Post-Pandemic Packaging'

Updated: Jul 28, 2021

As UK entertainment, leisure and cultural sectors rise to the challenge of the restoring admissions and revenues in the Covid-transformed landscape, both individually and collectively, returning consumers are confronted with a vast multiplicity of products competing for their leisure budgets.

In order to achieve a sustainable return to profitability, many organizations will, I believe, find it necessary to join forces with in other sectors providing complimentary services and unite two or more elements in a single proposition, such as;

event + travel

event + accommodation

event + travel + accommodation

event + travel + accommodation + dining + attractions

The Tour Operator Model

In spite of sharing a common goal, the profitable distribution of enjoyable, uplifting and occasionally life-changing experiences, and many common attitudes and attributes, each sector of The Business of Pleasure has its own unique vocabulary, priorities and business models, from Theatre and Music, Culture and Leisure, to Travel, Tourism and Sport. It is the role of the Tour Operator to be fluent in the both the language and priorities of two or more of these separate sectors and thereby extend the catchment area of an event; bringing the legions from the regions to the venue by land, see and air.

But that is just the public-facing proposition

Let’s consider a single product/sector.

London’s West End, arguably the theatre capital of the world, posted record numbers of attendees in the years prior to Covid. But if we were to take a closer look at those years, then we’d see that most long-running West End shows followed a fairly consistent seasonal pattern. Putting it very simply, there were generally eighteen peak weeks and thirty-four off-peak weeks. Depending where a show was in its life-cycle, and given a solid sales and marketing operation for netting effective demand, a top show would expect to pretty much sell out across eight performance during the peak weeks. During the off-peak weeks, with lower demand, the midweek performances (the midweek matinee and Tuesday and Wednesday evenings) would need a ‘help,’ and the problem would be how to flag the extra availability without undermining the perception of the show? After all, it is the demand that is weaker, not the performance. And the show certainly isn’t any cheaper to produce.

So what are the options?

A Producer could hold their hands up and offer to the public at the lower price. This would have been unthinkable to most big budget shows prior to 9/11 and the collapse of tourism that immediately followed. However in the aftermath of the atrocity even the most blue-chip participants in The Business of Pleasure had to roll-down their prices and roll-up their sleeves (taking great care not to show the “Death Before Discount” mantra tattooed to each forearm). When The Savoy Hotel goes out with a naked discount, it is still The Savoy Hotel. They don’t hire a couple of drug-crazed ‘seventies rock stars to trash a room before the discount-availing guests arrive, or contrive to spawn an ‘annexe’ a mere thirty-six minute drive away (for Lewis Hamilton) in picturesque Hendon. So why should a West End show worry about revealing to the world that it is, like most things, vulnerable to world events and their impacts on supply and demand?

Unfortunately the introduction of naked discounts for aesthetic products can be fraught with perils. After all, the discounted product on offer is the same as the higher priced one, just presented at a different day/time, so some prospective patrons may switch from the higher priced performances to the cheaper ones. And it is probably okay to offer these naked discounts if all the other comparable shows are doing the same. But if it is only your show is discounting, while others aren’t, prospective patrons might incorrectly assume that there is some problem with your show. Something you don’t want to tell them.

One way to avoid going naked would be to keep your seats priced at regular ‘face value,’ but offer greater inside commissions to your trade partners, who would then hopefully give your show a greater push in return.

Another solution might be to ramp up your own sales and marketing in the hope of getting an incremental return on your additional investment.

And even if you didn’t recoup with these alternatives, they might help solve another, bigger problem; a half-empty auditorium detracts massively from your audience’s experience and could quite easily turn them from evangelising ambassador to lethal assassin when they tell their friends and family and social networks. And so bring about or hasten a decline in the show’s fortunes over time.

A traditional tour operator would know all this, because they’d understand the shows’ seasonality and priorities (like not opening an auditorium that is three-quarters empty).

But, unlike most theatre producers or venue-owners, they would also understand the seasonality of the transport and accommodation providers (and local restauranteurs, etc.).

They would have relationships in place with the providers of all these separate elements and so could use the knowledge of each one’s individual priorities to leverage better rates, and/or terms and/or availability.

Crucially, they would also understand what works, and when, for specific segments within the individual regions, and what comms are likely to convert best at any given time. And that’s without taking into account the benefits of having a national network of travel agents (in-person and remote) who can advise prospective purchasers, in-person, probably in the lunch-hour, take their money (or a deposit) and be there to handle the flak should any customer service issues arise later.

What goes into a tour operator package? The not-so-secret-ingredient.

It will be no surprise to anyone reading this that none of the packaging outlined above works without trust. The prospective purchaser is counting on the operator to deliver almost the entire experience (the event plus accommodation and possibly transport and dining as well) bringing a bewildering (and potentially terrifying) number of variables into play. More importantly, that purchaser is probably risking their good standing with their partners, friends, family, colleagues if any of the elements falls below their expectations. Which is not too daunting if the short break package is one of many sandwiched between their main ski-ing and beach holidays. But if that short break is the only trip the family can afford that year. And they didn’t have a break the year before because the factory closed down. And it’s a combined celebration for mum and dad’s Silver Wedding Anniversary and Debbie’s eighteenth Birthday. And there’s only five minutes to change platforms for the train-connection at Preston. And Dad has an anaphylactic-shock reaction to avocado bathroom suites…

How Packaging Can Help The Return?

Once the initial rebound from lockdown has died down, new patterns of demand will emerge, both within the UK Domestic Market and key Inbound markets. Quite recently I had to price a show and I had to completely rethink the revenue potential because I could not rely on any pre-Covid weighting for a Friday evening, as opposed to a Tuesday, six months into the future. However the demand eventually settles, it is almost certainly (barring a miracle or a cataclysmic event) going to result into peaks and troughs spread across weeks, months and years. And on those weaker days, weeks and months there will be predictable excess capacity. When this excess capacity for one participant in The Business of Pleasure coincides with that of another providing complimentary products, the opportunity to package will inevitably arise.

Now, it is my firm belief that tour-operating, and more widely packaging as a whole, will be absolutely axiomatic to the return to long-term profitability and sustainability of many UK providers of entertainment, leisure and cultural products alongside those providing accommodation, travel and tourism.

Some of my reasons for thinking this are as follows:

The likely impact of the economic tail of the pandemic (unemployment and employment uncertainty, depressed wages, tax and interest rate rises) will squeeze a large percentage available leisure budgets

The reduction in potential patrons from among centrally-located office workers due to increased homeworking

The substitution effects of increased streaming (as opposed to attending physical events) as a result of greater exposure during lockdown

A persisting lack of confidence among some key segments in both attending an event or traveling to attend an event

Now if you think your business may be negatively affected by any of these impacts, I strongly recommend entering into dialogue with counterparts in complimentary sectors, or those ‘multilingual’ companies fluent in all the elements you might want to package your product up with. And if you don’t have any current contacts, feel free to use The Business of Pleasure website to kick off these conversations …that’s what we’re here for

Copyright David Thomas 2021

All Rights Reserved

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