Dealing with a nosedive in client spending

The global financial crisis saw the collapse of many established businesses, not to mention the start-ups that were so unfortunate enough to launch in the midst of it.

Randall Deer knows all too well what it’s like to launch a business during a severe downturn. His second business, My Holiday Centre, was launched at the height of the GFC in 2009.

But unlike many others, Deer purposely created his company to take advantage of the dismal economic conditions, engineering a new concept for both holidaymakers and hotel operators.

Prior to his foray into business, Deer worked his way up in finance and tourism. By 23, he was managing more than 2,000 strata-titled dwellings for Ernst Body Corporate Management.

By the age of 25, he was the general manager of Strand Resorts, which was, at the time, Australia’s largest privately-owned management rights entity.

At age 30, Deer decided to go into business for himself, launching tourism marketing company RewardsCorp in 2005. His decision to start the business was born primarily out of frustration.

“I was aware of a shared problem affecting all [tourism] brands of how to create strong revenue returns that could not be eroded by seasonal, low occupancy troughs,” he says.

“Similarly, as a consumer, I wanted value but was not prepared to accept a sub-standard, restricted holiday to secure a heavily discounted rate.”

While RewardsCorp suffered no major hiccups initially, it went on to serve as the catalyst for Deer’s second business, which required a lot more ingenuity.

“It was a mistake of ours thinking corporates would continue to hand over hundreds of thousands of dollars a year,” Deer says.

“The global financial crisis had a massive impact on travel, and many of RewardCorp’s promotional partners had their marketing budgets slashed.”

But instead of waiting for companies to perk up again, Deer took a risk by acknowledging the change and creating his new service around it.

“We created a new model to promote key international and domestic travel destinations… that would still allow them to attract new consumers, move their un-sold, excess stock and provide an exceptional experience-based package,” he says.

My Holiday Centre partners with select resorts, physically inspecting each and every one to ensure they’re up to scratch.

“Traditionally, if a resort wants more business and support from its channel partners, it has to both discount its rate to market and pay for the advertising,” Deer explains.

“Through RewardsCorp and My Holiday Centre, the participating resort is not required to input any cash up front, nor do they need to discount or devalue to achieve returns.”

In addition, My Holiday Centre offers consumers a concierge service, which includes complimentary VIP activity vouchers and experienced local staff at arrival destinations.

The business is now on track to send more than 40,000 Australians on holiday this year.

Meanwhile, overall revenue for Deer’s three companies – he also operates a group-buying site for travel and tourism – has soared from $18 million to $28 million in the past 12 months.

“Not everyone likes to be upsold and not everyone knows where they want to holiday, but everyone wants a great deal and a great experience,” he says.

“A holiday is the one thing that most people look forward to each year and we take the responsibility to provide them with this exceptional experience at a brand new level.”