Tour East battles back

Written by Kara Kuryllowicz

No one ever said running a business was easy. Just ask Rita Tsang. Since founding Tour East Holidays (Canada) Inc. in 1986, the Toronto-based tour operator, which specializes in trips to South East Asia and China, has felt the impact of such international shocks as Tiananamen Square, 9/11, war on Iraq and most recently, the granddaddy of them all, SARS. “In my opinion,” says Tsang, “SARS’ impact on the travel industry was much worse than 9/11.”

Indeed, from March to July 2003, Tour East’s sales plummeted more than 50% as spooked travelers opted to stay close to home.

To stem the losses and boost revenues, Tsang set out a clearly defined strategy, including protecting the business and cash flow by cutting costs; communicating with key stakeholders; and adapting and reinventing the business to take advantage of new opportunities.

“Quitting is never an option,” says Tsang. “No matter how bad it is, if you look hard enough you’ll find the positive. Tough times make you think harder and look for new opportunities.” Tsang trimmed costs by reducing marketing and operating expenses. But the firm was able to retain all of its 150 employees by tapping into a federal program that paid employees lost income when the company moved from a five-day work week to three.

Tsang also kept staff and other stakeholders in the loop with regular updates on the firm’s progress and her strategy. The briefings also allowed Tsang to solicit feedback and get others involved in finding creative solutions.

Then Tsang began looking for new destinations to promote. With an eye toward consumers’ interest in health and wellness, Tour East created packages to Whistler, B.C., the Alberta Rockies and the Atlantic provinces, highlighting spa and golfing experiences. Aware of their customers’ sophistication and comfort with long-haul flights, Tour East also began promoting packages to Brazil and Argentina. “These South American countries have the infrastructure and they’re accessible by air from Canada,” says Tsang. “They offer everything from luxury hotels to eco-tourism with a Latin atmosphere.” Many tourists are familiar with the beaches of Copacabana and Ipanema, but are surprised to learn that Iguassu Falls, which borders Argentina, Brazil and Paraguay, is bigger than Niagara Falls.

While these new destinations account for 5% of sales, the new packages and other measures means revenues, which totaled $256 million in 2002, will be down just 15% in 2003. “We needed to have a good balance of destinations,” admits Tsang. “We couldn’t continue to have all our eggs in one basket and we will continue to offer and promote these regions.” In fact, she says, next year the firm will also introduce its customers to Chile and Peru.

© 2003 Kara Kuryllowicz

Originally appeared on PROFITguide.com