The reality of forecasting the sales of a new tourism business

The reality of forecasting the sales of a new tourism business is difficult.

I’ve seen people get it wrong multiple times and in different ways mostly because of lack of context.

As an example, people at Skyline would often see the queue for mountain biking and think it was a very busy (and therefore successful) part of the wider business.

The reality was that the queue was integrating with the sightseers and the mountain bikers would often have to be put on hold to allow the sightseeing queue to move.

This made it look much busier than it actually was and would miss the context of how much that part of the business actually made (or didn't make).

Another piece of missing context is directly comparing a new business to an existing one.

Even if they offer exactly the same experience.

Tourism businesses that have been around for a long time are often built on travel distribution relationships.

This brings them a significant and often reliable amount of visitors based on those B2B accounts.

When you start a new business (especially when you come from outside of tourism) you have to start those relationships from scratch.

You can't expect to get them from day one without building relationships and trust with these partners.

The other key context is number - more specifically, guessing numbers without real data.

You can look at the queue for a business and the pricing model to estimate how much a business makes.

But it's really difficult to know what the bank account truely looks like.

It's easy to overlook the significance of:

- concession/s (often multiple for tour businesses)

- tech pricing models eg property management software, booking platforms who charge based on % of revenue

- 3rd party commissions (up to 25%) and how much of the business they account for

- The significance of swings in visitor numbers due to seasonality, macro-economic cycles and weather patterns

- the increasingly high cost of labour for frontline positions

So, when it comes to starting a new tourism business and getting the numbers as accurate as possible there are 3 key things I look at:

1 - Use local and national tourism data to get an informed view of visitor nubmers to an area and the seasonality fluctuations.

2 - Track booking platforms of similar businesses for 6+ months by viewing their booking availability on their website (it often shows how many spots available - while not a true account it does show availability).

3. Make very conservative estimates based on a combination of your own forecast, your capacity and accounting for all those pesky overheads that you might not see coming.