March 14, 2007

Unprincipled Profit

Benevolence is big business in travel these days. Every company wants to be seen handing out money to children, helping to build hospitals and launching themselves a new foundation.

But marketing their generous credentials seems to warrant bigger spending than the charitable donations.

In the days after the 2004 Tsunami the reaction from Maureen and Tony Wheeler was decisive and committed. Money was needed urgently and they shelled out US$400,000 on the spot. Half went into bank accounts of relief agencies that same day, the other helf held back to be spread across another six months as a clearer picture of need emerged.

Staff at Lonely Planet were given leave to assist with their chosen relief agency, and since then the company has continued to give 5% of their profits directly to charity.

I've just written a story about Responsible Travel with an angle of normalising the idea of being nice to people and the planet. Holidays can be pampering and still be RT friendly.

But I didn't get to say everything I wanted to.

I didn't get to point out that Peregrine Adventures have donated over US$100,000 to help save the Albatross. There wasn't room to include the Tanzanian guides who help Exodus travellers climb Mt Kilimanjaro for 10 months a year - and then receive development english classes during the rainy season in the hope of educating them into a better life.

And I had a snow-flake's hope in hell of getting printed the fact that one of the most RT awarded companies on the market is nothing more than a sham. We'll call them Company X.

This is the problem with awards, they follow the addage that, "the squeaky wheel gets the oil". Company X is covered in oil at the moment and still keeps pumping their marketing resources into maintaining the facade of being responsible tour operator.

This is a serious flaw in the system of selecting award recipients, which is based on review of submitted documents instead of hands-on knowledge. The latest trend is for passenger feedback to be used as a qualitative data source for how well RT principles are implemented.

Passengers are good at spotting things like a visit to an elephant hospital, but are usually unaware of the fact that Company X switched hotels a few months ago to save $10 a night per group.

X learned early in their company growth that cheap travel has a lot in common with RT. Of course, that all changes once you start sending 10,000 people a year to Thailand, but they've managed to side-step that issue pretty effectively to date and keep the fantasy alive.

In the month of April Company X will run 17 departures for their hill-tribe trek, north of Chiang Mai. At what point is "small group travel" no longer classed as low impact? It's difficult to tell but I'm betting it's well before you hit 17 trips a month.

But that's not the worst of it for me, the real kicker is the abuse of fair wages. Now that Company X is a volume business the pressure to be price competitive is immense. In fact it's a significant part of their market strategy; to be so cheap that new companies find it difficult to start up competing products.

So how do you keep your prices cheap when you have so much market clout?

Yep, you put the local operators under the thumb-screws. You can name your price when you provide so many customers each month, and if the price is too low for one person then maybe someone hungrier and leaner will take your business. And thus the cycle begins: Eager local suppliers are drawn in like a month to flame, only to get burned and fail, making room for someone else to give it a go.

Company X need not worry, they're business is sustainable. It's just that the local operators they are hammering on price each year are not.

Eventually the queue of eager hotels and guides starts to thin out in places - you can only tap the market so low before you reach the point of diminishing returns.

The next step is to drop some of the quality aspects that have made Company X great. Training tour guides is expensive, so changing to local guides not only reduces costs but it helps with the "RT friendly image" to be employing needy local people - just don't mention the fact that their wages are significantly less than those of the western guides who once took the job. And we'll have to ingore the tendency for local guides to be ill-educated and mis-informed about issues within their own country such as democratic rights and freedom of the press.

Don't be fooled, a passionate foreigner with a graduate school degree is always going to make a better tour-guide for a group of english speaking travellers.

Other money saving ideas come into play, such as local payments that arent advertised in the price and removing benefits like travel insurance from guide remuneration packages. But at every step of the way these changes are sold to the travellers, the employees and the media as if Company X is doing the entire planet a big juicy favour. The marketing machine kicks in, reality is phased out.

RT is a marketing tool instead of a philosophical ideal. Profit without principles. "It's just good business", as if that was a legitemate excuse for behaving without ethics.

There's a fine line out there somewhere, and without a doubt you cross that line well before 200 people a month visiting the same 'unique and remote' village in Thailand.

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