Pitfalls in tourism

October moves us into the last quarter of the year. We might as well get some business done. Here’s a theme to ponder: Three common reasons that tourism businesses fail.

This is more or less a random selection from my notes taken at ground level in Saipan and elsewhere.

None of this stuff actually proves anything. It’s merely anecdotal. In fact, I have a lot of caveats to put before the list.

For one thing, I don’t really like the term “failed” business. A failed business is not necessarily a failed idea. Trial and error is a perfectly valid way to go about many things. With this in mind, we need a new word for an error that isn’t necessarily an error and for a failure that isn’t necessarily a failure. Until I find such a word, though, I’m sort of stuck with my current inventory.

If words aren’t sufficient for the task, numbers don’t always help us, either. Our modern, button-pushing age has fueled the conceit that we can eliminate the uncertainty from everything if we just crunch enough numbers. The risks are still out there, though, sitting in the shadows and licking their chops.

Meanwhile, it’s always useful to remember that there’s a large random element in any business equation. A failed business that was too early for its time, or too late for its circumstances, might have succeeded if the founder happened upon the idea at some other time. We can’t catalog all the random factors, or even most of them. They’re probably infinite.

Anyway, now that we’ve got all that stuff out of the way, we can get rolling on this little list.

Here’s my first item: Trying to plant a tourism business where the local political establishment doesn’t want it.

Some of these situations are clear-cut and easy to see. Others, however, are often more subtle. I’ve seen a lot of money lost, and a number of projects sunk, in battles that could have been avoided if some meaningful on-the-ground research had been performed before the fact.

You don’t need a Ph.D. in political science to figure out the street-level business reality of any given venue. It’s far more effective to get to know some cab drivers, waiters, waitresses, shopkeepers, warehouse supervisors, bank managers, and attorneys. These people are at the transactional points of the economy.

Being able to use feedback from these people is largely a matter of understanding the difference between getting facts and getting opinions. Some people have a knack for asking the right questions. Some don’t.

Anyway, assuming that a tourism business manages to take root in a locale that’s accommodating, we can eventually encounter another risk: undercapitalization.

That’s a fancy, eight-syllable word for not having enough money. In its early stage the only thing that eats more capital than a dying business is a thriving one. This can be a frustrating fact. I have seen people get squeezed out of the very businesses they founded because they got desperate for capital. I’ve never seen any elegant solutions here. I will admit I’m something of a fatalist on this note. I think this realm is steered by its own invisible logic and there’s not too much point in worrying about it.

The third and final item on my list often afflicts maturing businesses that gets complacent. We can call this item “ineffective operations.”

I’ve seen two big pitfalls here. One is the failure to systemize the tasks necessary to run the business. Without having these tasks written down for reference and for training, things can start to unravel. Some examples of these tasks are: Ordering supplies, maintaining the grounds, backing up the computers, opening and closing the store, and dealing with certain customer service issues.

The other operational pitfall is the failure to staff a retail presence with a functional supervisory hierarchy. You’ve seen this in restaurants. An incoming group of eight hungry customers will be confronted with three sullen staffers who are chewing gum and playing Facebook. In the mainland this factor is quite evident in many fading, big-name retail companies.

Well, so much for my list. Now that I’ve heeded the business side of things I can spend the rest of the month concentrating on more important matters. Like, for example, Halloween.