Extraordinary journeys wild time in the safari industry

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Introduction ● Elizabeth Gordon (CEO) was there to gather up to minute intelligence on the safari
industry
● Tests safari camps for future clients
● Visited africa twice a year
● extraordinary journeys (EJ), revenues increased at a 60 percent compound annual
growth rate through 2016
● Mid 2017, gordon believed it was difficult to maintain the rapid growth due to
competitive pressures
● Competitors were advertising to her potential clients and were also backed by
private equity funds and million dollar branding campaigns
● Increase in competition would threaten incumbents and potentially the growth and
market position
● Competitors can drive down prices and profit margins

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Safaris: A
Broader View
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Intro to Safaris ● Estimate suggests that at least 4.5 million international tourists visited Africa in
2015 to go on safari

ㅡ ● Visitors went on safari from 4-14 nights

● Most safari visitors stayed at camp or lodge
Safari Activities
● At lodge, travelers found permanent building that had amenities like electricity, hot
water, ac or swimming pool
● At camp, travelers found fabric walled tents but ultra luxury camps had indoor
bathtubs, private plunge pools and hand carved sinks
● Popular activity was game drives to see wild animals
● Another activity was a walking safari, where guests hiked in search of game
with well-qualified scouts and guides
● Alternative activities were typically offered based on the price range of the lodge or
the type of travel the lodge was oriented towards.

● In 2017, the upscale safari market was composed of both luxury and adventure
travellers who stayed in higher-end camps and lodges
ㅡ ● Average spend for EJ clients was around US$ 8,000 per person, excluding
American Safari international airfare
Travellers ● Most EJ clients were american
● Estimated 110,000 americans travelled on a luxury safari each year
● When the economy is doing well, safari bookings and prices go up significantly.
● In the luxury segment, from 2010 to 2017, there was an average annual growth of
about 10%.
● if the stock market doesn't perform well, this rapid growth could slow down or even
lead to a decline in the safari industry.
 ● Operates in 3 main layers: tour operators, destination management companies and
safari camp managers
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Safari Industry
Structure
● Potential US travellers looking to plan a personalized safari have many options for
ㅡ tour operators but many don't explore extensively due to the time commitment of
working with a safari specialist for a custom itinerary.
Tour Operators ● Custom safari tour operators are like highly specialized travel agents and earn their
profits through sales commissions from safari camps and lodges, typically ranging
from 12% to 25% of the total trip price (excluding airfare).
● Wholesale rates were not available directly to consumers, so individual travellers
paid approximately the same amount whether they booked with a tour operator or
directly with the safari lodge.
● To be successful, tour operators need 3 key resources
○ Industry knowledge
■ understanding the best safari options, working with suppliers, and
knowing customer preferences
○ Appropriate amount of capital
■ new firm needed around $1 million to $2 million.
■ used to set up an office, hire an experienced team, and run effective
marketing and branding campaigns.
○ skill to manage the marketing and branding campaign - build awareness

● Tour operators and DMCs work closely to organize the complex logistics of custom
safaris in specific regions
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● act as on-the-ground support for safari clients.
Destination ○ assist tour operators in booking challenging aspects of the trip, such as local
Management transportation and chartering planes for remote destinations.
Companies ● have limited pricing power in their operating regions and compete by offering good
service at a reasonable price.
(DMC)

● In 2017, there were more than 300 luxury camps and lodges across Africa offering a
wide range of safari experiences.
ㅡ ● Prices varied from moderate to very high, with all-inclusive daily fees covering
room, meals, and safari activities.
Safari Camps &
● Mid-range safaris started around $350 per person per night, while ultra-luxury
Lodges experiences could exceed $3,000 per person per night.
● Managing safari properties was a specialized and capital-intensive business.
Traditionally, the industry was fragmented, consisting of small firms that owned
lodges and camps. Between 2000 and 2017, these small companies slowly started
working together or forming partnerships.
● Some firms, particularly those serving high-end luxury clients, built international
brand reputations, allowing them to expand in new directions.

● Gordon grew up in safari industry and visited major safari countries and stayed in
ㅡ over 100 safari camps/lodges
Extraordinary ● In 2009, Elizabeth Gordon founded EJ to modernize safaris, focusing on American
travelers who wanted customized trips blending luxury and adventure.
Journeys
 ● sent clients only to destinations where she or one of the 20 EJ employees had
stayed.
● As the demand for custom safaris grew, EJ's revenues dramatically increased, with a
Compound Annual Growth Rate (CAGR) of over 60%.
● Starting in 2009 with $200,000 in revenues and no full-time employees, EJ had
grown to a projected $12 million in revenues by 2017, employing 21 people.

ㅡ ● Process used to create safaris for clients is focused on 360 degrees of trip planning
and execution.
Extraordinary ● Sales team matches clients interests, budgets and tastes
Journeys ● Do a lot of training to ensure sales team is up to date
Strategy ● Gordon had guided EJÕs rapid growth based on three primary strategies: (1) a
public relations (PR) campaign targeting high-end travel publications, (2) referrals
from past clients to their friends, and (3) repeat bookings from past clients.
● EJ had become known for its high-quality customer service and creative safari
planning.

● Gordon recognized that to maintain her market position, she needed to invest
ㅡ capital and even more effort into her company
Looking ● Considered 3 options to leverage EJs existing resources: a direct marketing
approach, a PR approach, and an optimization and efficiency approach.
Forward
● She has limited availability and is able to engage in at most one new project for the
foreseeable future.

● Considered conducting direct-to-consumer marketing campaign

ㅡ ● She knew that she would need to operate in many marketing channels to be
successful such as facebook and google, direct mail campaigns, search engine
Marketing
optimization, and advertising in high-quality magazines that catered to a wealthy
Strategy audience.
● Was uncertain about these as advertising for safaris is competitive and expensive
● benefit of an advertising-based approach was that the average cost to acquire a
new customer could be determined over time.
● advertising campaigns could be increased or decreased over time to fit the available
resources in her sales team.
● estimated that to test the profitability of an advertising strategy, she would need
to spend at least $100,000, and likely closer to $150,000.
● This investment is necessary due to fixed costs associated with graphic design,
coding, and agency fees.
● acquiring each new customer through this strategy would cost around $800.
● expects this marketing-based strategy to provide a quicker payback period

● Option to increase her focus on Public Relations (PR) and brand building.
ㅡ ● Initially, her contract with a New York City-based PR firm had been successful, but
Public Relations she noticed diminishing returns, suspecting increased competition for media
attention in the safari industry
Strategy
● To stay competitive, Gordon considered raising her annual PR contract to at least
$100,000, covering expenses for exclusive events, journalist trips to Africa, and
sponsoring luxury events.
 ● PR involves more risk but can have higher and long lasting benefits
● could enhance EJ's visibility within the tour operator industry.

● engage in an optimization program

ㅡ ● Program would contribute to increasing profits through cost reductions and
increased employee efficiency
Optimization ● As the company grew rapidly, systems for sales and support became temporary
Strategy solutions.
● Aims to formalize proprietary knowledge through an internal database and improve
communication between sales agents and ops managers.
● To enhance efficiency, she envisions custom-built CRM software that automates
document creation and client communications.
● estimated a cost of $100,000 to build the content management system (CMS)
● comes with risks, such as software performance issues but Gordon believes it could
boost employee productivity by at least 5%, leading to benefits like improved client
experience, increased employee retention, and reduced stress for her as the

**Strengths:**

1. **Industry Expertise and Reputation:**

- *Strength:* Elizabeth Gordon's extensive background in the safari industry and her personal
experiences in major safari countries contribute to EJ's strong industry knowledge. The
company has built a reputation for high-quality customer service and creative safari planning.

2. **Customization and Personalization:**

- *Strength:* EJ's focus on providing customized trips blending luxury and adventure caters to
the specific preferences and interests of its clients. The ability to tailor safari experiences
enhances customer satisfaction and loyalty.

3. **Client Relationships and Referrals:**

- *Strength:* EJ benefits from strong client relationships and referrals. The strategy of relying
on word-of-mouth referrals from satisfied clients indicates a high level of customer satisfaction
and trust in the company's services.

4. **Growth and Revenue Performance:**

- *Strength:* EJ has demonstrated impressive growth, with a Compound Annual Growth Rate
(CAGR) of over 60%. The company, starting with $200,000 in revenues in 2009, projected a
significant revenue of $12 million by 2017, showcasing its ability to attract and serve a growing
client base.

5. **Unique Selling Proposition (USP):**

- *Strength:* EJ's USP lies in modernizing safaris for American travelers, offering a blend of
luxury and adventure. The company's focus on destinations where the team has personal
experience adds authenticity to its recommendations.

6. **360-Degree Trip Planning Approach:**

 - *Strength:* EJ's process of 360 degrees of trip planning and execution ensures a
comprehensive approach to meeting client interests, budgets, and tastes. The emphasis on
training the sales team contributes to effective trip customization.

**Weaknesses:**

1. **Dependency on Referrals and Repeat Business:**

- *Weakness:* While the reliance on referrals and repeat bookings has been a strength, it can
also be a weakness if the company becomes overly dependent on these sources. Over time,
this may limit the expansion of the customer base.

2. **Limited Diversification in Marketing Strategy:**

- *Weakness:* EJ's historical reliance on a PR campaign targeting high-end travel publications
might limit its exposure to a broader audience. The lack of a diversified marketing strategy could
hinder reaching potential clients through alternative channels.

3. **Competitive Pressures and Industry Changes:**

- *Weakness:* The acknowledgment of competitive pressures and the difficulty in maintaining
rapid growth indicates vulnerability to changes in the industry. Increased competition, especially
from well-funded rivals, could impact EJ's market position and growth trajectory.

4. **Limited Financial Flexibility:**

- *Weakness:* The consideration of financial constraints in exploring new strategies, such as
direct marketing, reflects potential limitations in financial flexibility. This could restrict the
company's ability to invest in new initiatives to stay competitive.

5. **Operational Systems and Efficiency:**

- *Weakness:* The mention of temporary solutions for sales and support systems indicates a
potential weakness in operational efficiency. The need to formalize proprietary knowledge
through a content management system (CMS) suggests that existing systems may not fully
support operational needs.

6. **Economic Sensitivity of Luxury Safari Market:**

- *Weakness:* The luxury safari market is sensitive to economic fluctuations. A decline in the
economy or stock market performance could impact safari bookings and prices, affecting EJ's
revenue growth, as seen in the average annual growth rate from 2010 to 2017.

**Conclusion:**
- While EJ has notable strengths in industry expertise, customization, and growth
performance, it faces weaknesses related to dependency on referrals, competitive pressures,
financial constraints, operational efficiency, and economic sensitivity. Addressing these
weaknesses while leveraging strengths will be crucial for EJ's sustained success and
competitiveness in the safari industry.
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