2020 has become a year like no other and COVID – 19 hit 2020 like a massive wrecking ball. Very few were prepared for the damage that COVID has caused as most had very little time to prepare. However, one of her most damaging and lingering effects is the unknown return to some level of normality.
I may be biased however it seems that the tourism industry was the hardest hit. When the COVID restrictions arrived, Phuket tourism was happily working its way through her high season. This is a very popular period with Europeans as it coincides with the cold northern hemisphere winter. Numbers increase significantly and it is a time where a lot of businesses set themselves up for the remainder of the year. Most dive operators in Phuket are 99% reliant on international tourism and that period is very important to us.
In the scuba diving industry, the months between December and April are also our prime diving months. The calm and cooler weather provides little rain and wind and in turn, the best conditions for boat travel. The world-famous Similan Islands are open for the liveaboard season and adds an alternate and profitable source of income for dive centres.
COVID with her kindness did allow Phuket to get through her ultra-busy fortnight of Christmas – New Year however only a few short weeks the concerns of COVID started, not long after that cancellations were in abundance, most on very short notice. Virtually all required refunds. Before we knew it, all international tourism was cancelled.
Soon after, the Tamboon lockdown then place the final nail into the high season coffin.
Prior to COVID, Aussie Divers employed 24, a mixture of Thai and fulltime freelance expat dive instructors. Despite the uncertainty of the future, all bar two expat instructors decided to wait it out. Those that did return home were planning to do so in the slow season anyway.
Business wise, Initially, the lockdown provided some good catch up time. It was a time to do all the website and social media chores that had been left unattended during the busy period.
However, as time wore on and we started to understand the seriousness of the pandemic, there was growing concern. The underlying uncertainty of when the borders would be opening had everyone seriously worried. Some were saying a few months, others thought October however the longer it went it appeared we may have nothing until 2021. The fact was no one knew, even as I write now, we still don’t know.
Realization and cutbacks
What did become obvious during this period was that COVID was not going to be a short-term problem. The recovery would be slow and would most likely take years to return to normal. Phuket is built on the expectation of around 30,000 tourists a day. We have enough hotels for 30,000 a day, enough restaurants, scuba diving centres and other tourism facilities. Anything less than 30,000 a day will have a lot of tourist operators struggling.
It was enviable that we would lose money and that would be a significant amount. Things had to change and there would need to be serious cut backs. We started to strip overheads which included closing our second Phuket shop. These decisions are the single toughest and saddest business period of my life. Never before have I had to ask for reduction in rents, extended repayments and the like. In fact, my reluctancy to do it earlier was a costly mistake. I had the feeling of begging along with a feeling of failure. Pride made all tasks difficult.
However, most those decisions were easy compared to the retrenching of staff. As mentioned, Aussie Divers at a staff level of 24 coming into COVID. A 50 – 50 mix of Thai and Expats. The realization that one could no longer provided for those that have been loyal, who had become friends and relied on your monthly wage is the most gut-wrenching period of my life. As the months passed, we had to continually cut staff. Each month hoping you will be able to save someone from unemployment. Today, late-October we are down to a staff of four, one Thai manager and three instructional staff. We have lost some 20 employees all respected employees.
However, the biggest realization was that, business will not be the same for long time. Aussie Divers were 99% reliant on international tourism. Without any international tourists meant that our business model HAD to change. If we continued the way we were we would die a slow death. We to revamp and reinvent our business and become more domestic friendly.
Shortly after the reopening of Tamboon, I along with three staff decided on a road trip to Koh Tao. This was in part a bit of a bonding exercise, but also a bit of a recon mission to see is there was anything we could do to improve our business.
Koh Tao dive centres, have a different business structure to those in Phuket. Given that their dive sites are in closer proximity to the main island that Phuket, they have lower overheads and short dive days. Primarily they are more appealing to cost sensitive divers. They do a lot higher numbers than Phuket and at a lower price.
Koh Tao and Phuket for as long as I remember have been arch enemies. Both regions were fighting for their share of the international market and as a result there is a fair amount of sledging between the two. Having never been to Koh Tao, all of what I knew was what I heard in the gossip circles of Phuket.
After the initial relief of not being shot on arrival, I was pleasantly surprised with Koh Tao. It was not the mental picture of as scene from “Woodstock” I was led to believe. It is a stunning beautiful island with some gorgeous beaches, nice food outlets and appeared to have some great resorts and hotels.
The impression I had whilst there was that Koh Tao was more appealing to the domestic divers i.e Thais and expats from Bangkok. This played on my mind for most of the trip along with the ride home. I was asking myself, could we do what we are doing in Phuket, in Koh Tao? We have everything in place, office staff, equipment, management, instructors and a great reputation for professionalism and customer service.
Business models are different between the two dive locations, however at the end of the day we are doing the same thing, teaching scuba diving and keeping divers happy. The thought of expansion was ticking always in my brain.
Return to Koh Tao
Two weeks later I found myself back in Koh Tao for another weekend trip. This time I asked a few more questions of local staff, business owners and divers. Of the divers, all were from Bangkok. There was a clear preference for them to travel to Koh Tao. At the time, the uncertainty of flights was a big issue.
By the end of the weekend trip I had made a decision that I wanted to peruse the option of having an outlet in Koh Tao.
On my return to Phuket I booked a one-way ticket to Koh Tao. I was adamant that I would stay until I had found somewhere to bring our brand into the island.
A New Venture
As you would imaging there was a lot of businesses that were quite prepared to sell and to be fair there were some good offers and prices. There was also plenty of empty buildings for rent. Some well-priced some not so.
The realization that buying a business was going to be cost prohibitive, especially given the economical climate. Setting up a new shop/business was looking to be more expensive than anticipated, mostly to do with advance rent payments.
With the help of a friend, I stumbled upon an opportunity that I had previously not thought of. We were faced with a completely different proposal. This was to set up inside a resort, with and established dive center, but no managers or of course, customers. The resort was eager to have a professional company run their dive operation.
After another trip to Koh Tao and some healthy negotiations we were able to negotiate a deal with a resort in Maehaad Beach, Koh Tao. We were able to negotiate a profit-sharing arrangement which was a great lost cost arrangement for us.
Our expansion to Koh Tao had begun and with a bit of audacity, a bit of hard work we commenced a new venture with very little overheads. It appears to be a good win in tough times.
There is an old say that goes that goes “Can’t see the forest for the trees”. The six-hour drive from Chumphon back to Phuket gives you some think time. The long drive brought on realization that virtually that all of our divers were from Bangkok. We were so busy with COVID that we missed the forest.
An obvious destination for a further increase in business was Bangkok. We needed some representation in the heart of where our current and most likely future customers were coming from. I arrived in Phuket that evening deciding to move to Bangkok.
The transition to Bangkok was a simple one. Virtually all of my Phuket work could be done remotely. I had a friendly landlord in Phuket who released me early from a lease and I was able to find accommodation in Bangkok at a compatible price.
Within two weeks, I moved to Bangkok, we had much better exposure to Bangkok clients, we also developed a much-improved method of networking and selling of our product. In addition, we are able to provide pool session in Bangkok which has been an appealing factor to new customers.
We were off and running in Bangkok at very little cost and little overheads. It appears to be another low cost COVID win.
Our Current Status
We believe we have improved out protentional to earn, however we are under no illusions that we are still a long way from safe territory.
However rather than trying to ride out COVID and hoping that things will just return to normal we jumped on the front foot. With some hard work and minimal outlay we have improved our numbers and this is growing ever so slightly against the odds.
Aussie Divers, and other tourism business will always be reliant on international clients. And by all accounts, tourism will struggle in Thailand for quite a while and that is something that we will have very little control over.
However, what we really feel that we have done and achieved during this period is strengthened the business. We have moved from being a single source outlet into a position where we have expanded our reach and ability to provide to a greater number of divers and customers.
We have maximized out income potential and we will be stronger and grow as things start to improve. All achieved with a positive attitude and some hard work.
Personally, as bad as COVID is, this is not a time to sit around and do nothing. It is a time to take a good look at your business, it is a time to try new things and explore new avenues. Remaining idle will produce the same results.