It’s understandable that many companies, particularly those that depend on consumers traveling, are just trying to survive the winter. They’re working on extending their cash flow as much as possible to stay afloat – and while that is of course necessary, there’s an important moment in time coming up that just cannot be missed: the COVID rebound.
Essentially, while travel (and other) companies are working overtime to keep the lights on now, they also have to be prepared to take advantage of an influx of business when the vaccine fully rolls out, the summer arrives and people begin living life in the “next normal.” According to McKinsey, it’s likely that domestic leisure travel will return first, particularly if we look at how China has bounced back from its COVID cases.
As the summer will be the first big “boom” for these types of companies in 18-plus months, capitalizing on the influx of business in a safe way will largely be the first opportunity they have to make up as much lost revenue as possible in approximately 12 weeks’ time. For many, it will be their Hail Mary.
In order to capitalize successfully, there are a few key steps that businesses should take now:
- Cash flow calibration. As it pertains to cash flow, seek counsel on how much your business needs to survive, and then reroute all remaining funds (if any) to summer-related preparation.
If you can make the case to show that you’re weathering the storm now, and compare it to pre-pandemic levels, there’s possibility for additional loans in the interim.
- Inventory adjustment. With pent-up demand for certain services, stockpile appropriate inventory for the upcoming (warmer) season. Ensure that the services/products you’re pushing hardest for now are those that, due to weather or time, cannot be used in the summer; this ensures little carryover into the warmer months when you’ll likely have to discount them.
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- Staffing alignment. Begin searching for seasonal staff support now, and seek to sign contracts by the April timeframe. Ideally, these staffers will understand the time crunch you’re under and ensure their availability on a longer-term basis than is typical.
- Social distancing preparation. Keep in mind that social distancing will likely still be important come the summer, so prepare activities/inventory, etc., accordingly. For example, if you’re a travel gift shop, add surfboards to the inventory. Other examples include contactless check-in and a consumer-friendly online reservation system.
- Marketing production. Begin marketing activations for the summer now – if possible/relevant, work to get customers booked early on, and share any early insights with investors as soon as possible. Any supporting materials you have for why your company will make it through the summer and be back on track following will quell many investor fears.
Of course, final and ultimate success of the aforementioned steps depends largely on whether or not government entities decide to allow travel-related activities with fewer restrictions; but taking into consideration the trajectory of the vaccine (and even increased activities witnessed throughout last summer), most companies don’t have the luxury to assume societal closure and need to prepare as much as possible in the meantime.
Even the few travel sectors and brands that witnessed a boom due to social distancing requirements – for instance, RVs and campgrounds – have to prepare appropriately. How can they extend their unexpected lifeline throughout the summer, when things have the potential to return, at least in some ways, to “normal”?
These are the questions business owners must ask themselves now, should they be able to take full advantage of the warmer summer months coming up. It’s an opportunity that simply can’t be missed.