Adventure & Backpacker Industry Conference - Sydney 5/11/09

Adventure & Backpacker Industry Conference - Sydney 5/11/09

Adventure & Backpacker Industry Conference - Sydney 5/11/09

Hostels & Bars

• 13 Hostels• 12 Bars

Adventure & Backpacker Industry Conference - Sydney 5/11/09

Hostel Strategy

• Beds & Bars• Modern, clean, safe, friendly, social,

innovative, “experiential”. • Accommodation options from dorms to

privates with en-suites.• Beds in all major destination.• Customer reuse – keep them in the network

& leverage spending.– NZ is complete– Australia expect to add 4-5 properties in next 2 years

• Work with other like-minded hostels to “fill in the blanks”.

• Develop e-commerce solutions and sales tools to increase distribution.

Adventure & Backpacker Industry Conference - Sydney 5/11/09

Hostels

Adventure & Backpacker Industry Conference - Sydney 5/11/09

Hostel Challenges

• Profitability• Demand

– Arrival numbers– Govt. policy– Cost of generation– Stagnating core markets– Economic environment– Currency– Market attraction

• Quality vs. Cost• Oversupply• Price discounting• Low end hotels moving into backpacker space

– More choice – private rooms– Concentrate on the social environment

• Driving economies of scale & operational consistency• Not “over corporatising” – retain authenticity• Fixed vs. variable cost structure• Future development• Strategic supplier relationships• Customer communication

Adventure & Backpacker Industry Conference - Sydney 5/11/09

Hostels – The Future

• Fragmented market – further consolidation• Chains & good owner/operators in specific

destinations• Increasing customer quality demands• Increasing focus on the hostel/travel experience• Increasing need to cater to “non-traditional” markets• Property valuations vs. returns?• Increased cooperation between all parties

Adventure & Backpacker Industry Conference - Sydney 5/11/09

Travel Shops

• 30 shops in Australia & NZ (11 within hostels)

Adventure & Backpacker Industry Conference - Sydney 5/11/09

Travel Shops - Strategy

• New relevant brand• One brand• Clear customer proposition• Leverage hostel customers• Rationalise product• Increase staff productivity• Automation & efficiency

Adventure & Backpacker Industry Conference - Sydney 5/11/09

Travel Shops - Challenges

• Sales volume + low transaction value• On-street cost• Complexity + inefficiency• Staff turnover• Supplier direct sales• Competition – low barriers to entry

Adventure & Backpacker Industry Conference - Sydney 5/11/09

Travel Shops – The Future

• Fewer retailers!

Adventure & Backpacker Industry Conference - Sydney 5/11/09

• Questions