2020-06-03 how may tourism businesses adapt to the ...€¦ · 3/6/2020 · 3 ivan chang adjunct...

Using Business Innovation to Survive and Thrive Amidst the Global Pandemic

How may Tourism Businesses Adapt to the Challenges of Today?

LIVE WEBINAR by IVAN CHANG 3 JUNE 2020 | WEDNESDAY | 12.30PM - 2.00PM

In Partnership with:

https://ivanchangwl.com/ 2

• The information provided in this webinar is meant only for the intention of education and learning. You should seek independent legal and accounting advice before conducting any business or investment decision.

• All efforts have been taken to ensure the information provided in this webinar is accurate as of publication date.

• The author(s) reserve all rights in the material provided.

Safe Harbour Statements

3

Ivan Chang

Adjunct Teaching MentorSingapore Management University

School of Accountancy

Board Member, Make-A-Wish Foundation

Board Member, Youth Corps Singapore

Board Member, SGTech

linkedin.com/in/ivanchangwl

[email protected]


Executive Certificate in Leading Tourism Transformation

1

2

3

Business Innovation - Transforming Your Tourism Business for the Digital Economy

Future of Work - Exploring Cutting-Edge Technologies for Tourism

Data Literacy - Understand the value and importance of Customer Data through Data Analytics


Webinar Recording, Slides and Q&A

Slides Recording Q&A

Webinar slides will be available for download and

circulation on https://ivanchangwl.com/

A recording of this webinar will be available 2 hours after the live session for

playback and viewing

Live Q&A will be conducted via Zoom’s Q&A

functionality

Kindly add your questions and a selection of them will

be answered

https://ivanchangwl.com/

https://ivanchangwl.com/


• A Post Webinar Survey will open once this session ends

• Kindly help us complete it so we can continue to improve our webinars

Post Webinar Survey


Agenda for Webinar

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COVID-19: Where we are today

Sustaining: Survival for the next 6-18 months

Adapting: Never waste a crisis

Opening: Welcome to the New Normal4


1

COVID-19: Where we are today


Source: McKinsey Insights

Global: Online Usage has increased tremendously



Global: Consumer Confidence all over the place



Europe: Household & Entertainment Spending Up



China: Domestic Tourism is slowly recovering


Source: BCG

SEA: Searches still down, Departure trending up


• The economy will shrink for the year 2020

• Q1 contraction is the worst drop since the 2008 Global Financial Crisis

• 2020 will be the worst contraction since independence

• Last recession: 2001

Singapore: GDP Forecast

Source: MTI, Straits Times

2020 Q1: -2.2% YoY 2020 Est: -4% to -7%


Unity Budget

February 2020

$4bn for Businesses $1.6bn for Household

$5.6bn $48bn

$28bn for Businesses/Household

$20bn loan backing

Source: Singapore Government: MTI, MOF

$5.1bn

$4.2bn for Businesses $0.9bn Household

Resilience Budget

March 2020

Solidarity Budget

April 2020

Fortitude Budget

May 2020

$33bn

$20bn for Direct Support $13bn Contingency

Singapore: Unprecedented Budget Measures


Source: Singapore Government: MTI, MOF

Singapore: Unprecedented Budget Measures

S$17bn2020 (Mar) COVID-19 (Resilience)

S$4bn2020 (Apr) COVID-19 (Solidarity)

S$31bn2020 (May) COVID-19 (Fortitude)

S$13bn S$18bn Contingency + Committed Contingency: ~ 4 months of JSS

S$52bn


Reducing interest rate for banks to borrow

Objectives: • Cheaper capital, increase investment • Investment leads to a rebound in spending

Government Policies: Monetary Policy


Government Policies: Fiscal Policy

Direct cash injection into the market

Objectives: • Provide cash for spending • Create multiplier effect in the market

What the Singapore Government is doing


Government Policies: Testing to limits of Government Globally

Monetary Policy

Fiscal Policy

• Negative Interest Rate Issue • Not all countries can practice this • Not borrowers

• Limitation of debt funded fiscal policy • Free market is not at work (Cash hoarding)


Travel Sector: What can you do?

1. Sustaining

2. Adapting

Survival for the next 6-18 months

Never waste a crisis

Welcome to the New Normal

3. Opening

Think about the business in 3 phasesEach phase leads to the other

In complex times, it’s good to step back and see it holistically


2

Sustaining: Survival for the next 6-18 months


A. TRENDS B. PEOPLE C. CASHFLOW

Factors to think about


A. Trends: What will the recovery curve be like?

Source: Economist



Source: IATA



Source: US Department of Homeland Security



Travel Bubble within Region

Greenlane for Business / Government


STB: STAN

You can indicate your interest in the Post Webinar Survey

Examples of Insights from Stan

Identify peak periods for Asian markets across the year

Understand length-of-stay patterns between peak and non-peak periods

Obtain numbers on latest month VA, ALOS and VD for specific markets



Recommendations

1. Make your own demand forecast with relevant data- Optimistic (Best Case)- Pessimistic (Worst Case)

2. Evaluate if you are planning to last through the Worst Case

3. If yes, move on to B & CIf no, other options


B. People: Composition of Workforce

• Helps enterprises retain their local employees25% cash grant on gross monthly wages of each local employee (Singapore Citizens / PRs)- Wage cap of $4,600.00 (i.e. $1,150.00 per employee per month)- Based on 3 qualifying period (T1 Oct-Dec 2019 / T2 Feb-Apr 2020 / T3 May-Jul 2020)- i.e. maximum payout per employee is $10,350.00

• Solidarity Budget75% cash grant on gross monthly wages of each local employee (Singapore Citizens / PRs)- Wage cap of $4,600.00 (i.e. $3,450.00 per employee for April 2020)- i.e. maximum payout per employee is $12,650.00

• Fortitude BudgetExtension of JSS by 1 month to August 2020 (total 10 months)Employers allowed to re-open on 2 June 2020: 25% JSS support for June - August 2020 (3 months)Employers not allowed to re-open on June 2020: 75% JSS support until reopening / August 2020 (whichever is earlier)



• How to qualify? Administer by IRAS - No need to apply- Auto calculation based on CPF records

• Payout Date Trench 1: April 2020 (For Oct to Dec 2019 + April 2020)Trench 2: May 2020 (For May 2020)Trench 3: July 2020 (For Feb to Apr 2020)Trench 4: Oct 2020 (For May to Aug 202)



Tier 1(75%)

Aviation & Aerospace

Tourism, Hospitality, Conventions & Exhibitons

Tier 1(75% for Jun - Aug 2020) Built Environment

Tier 2(50%)

Food Services

Retail

Arts & Entertainment

Land Transport

Marine and Offshore

Tier 3(25%) All Others



Oct 19 Nov 19 Dec 19 Feb 20 Mar 20 Apr 20 May 20 Jun 20 Jul 20 Aug 20

IT / Office 25% 25% 25% 25% 25% 75% 75% 25% 25% 25%

F&B 50% 50% 50% 50% 50% 75% 75% 50% 50% 50%



Recommendations

1. A job saved is a family saved

2. Operating with Less

3. Workforce mentality and resilience


C. Cashflow: The Essentials of Every Business

• Qualifying Commercial PropertiesHotels, Tourist Attractions, Shops and Restaurants 15% to now 100% Property Tax Rebate

• Other Non Residential PropertiesOffices and Commercial Sites0% to now 30% Property Tax Rebate



• For SME Tenant (i.e. revenue not more than $100m)Government to provide a new grant to landlord and mandated to pass to tenant

• Qualifying Commercial Properties (including retail shops)Government Grant worth about 0.8 months of the rent calculated based on Annual Value of Property

• Other Non Residential PropertiesGovernment Grant worth about 0.64 months of the rent calculated based on Annual Value of Property



• For SME Tenant (i.e. revenue not more than $100m)

• Qualifying Commercial Properties (including retail shops)~ 2 months of rental rebate

• Other Non Residential Properties~ 1 month of rental rebate



• To be paid out by IRAS to Landlord Details will be announced end-June 2020

• Action> Speak with your landlord about the additional period of rental relief> When it will be passed over



• For SME Tenants of Commercial and Industrial/Office Properties If your revenue experienced a significant drop

• Additional 2 months or 3 months of rental relief (up to 4 months)Bill to be tabled in June 2020Additional cost will be equally borne by the Government and Landlord



• Ministry of Law: New COVID-19 Bill

• For SME Tenants of Commercial and Industrial/Office Properties If your revenue experienced a significant drop

• Additional 2 months or 3 months of rental relief (up to 4 months)Bill to be tabled in June 2020Additional cost will be equally borne by the Government and Landlord



• Working Capital LoanFirst line of loan qualificationEstimated: Firm with revenue up to $5m

• Temporary Bridging Loan ProgrammeSecond line of loan qualificationEstimated: Firm with revenue above $5m

• Enterprise Trade LoanLarge enterprises



Recommendations

1. Do you have the liquidity to survive through the Worst Case scenario planning

2. If yes, do zero base budgeting

3. If no, what are the shortfall and steps needed to bridge that shortfall


3

Adapting: Never waste a crisis


A Relook into your Business Model

• AirBnb Online ExperienceHundreds of Thousands of BookingsTop performers making more than $50,000 / week

• Incremental Replacement Does not cover everything but at least it’s something


• Business ModelA story about how your company / idea worksA system of sorts, of how pieces your business fit together

• StrategyCompetitionHow your company will stand up against competitors

Business Model vs. Strategy


Business Model Canvas


Customer Segments

An organization servesone or several Customer Segments.

1: ValuePropositions

It seeks to solve customer problems and satisfy customer needs with value propositions.

2: Channels

Value propositionsare delivered to customers through communication,distribution, and sales Channels.

3: CustomerRelationships

Customer relationshipsare established andmaintained with eachCustomer Segment.

4:

The 9 Building Blocks


RevenueStreams

Revenue streams result from value propositionssuccessfully offered to customers.

5: KeyResources

Key resources are the assets required to offer and deliver the previouslydescribed elements…

6: KeyActivities

…by performing a numberof Key Activities.

7: KeyPartnerships

Some activities are outsourced and someresources are acquiredoutside the enterprise.

8: CostStructure

The business model elements result in thecost structure.

9:



1: Customer Segments

The Customer Segments Building Block definesthe different groups of people or organizations anenterprise aims to reach and serve.


1: Customer Segments

For whom are we creating value?Who are our most important customers?

There are different types of Customer Segments.Here are some examples:

Mass marketNiche marketSegmentedDiversifiedMulti-sided platforms (or multi-sided markets)


2: Value Propositions

The Value Propositions Building Block describesthe bundle of products and services that createvalue for a specific Customer Segment


NewnessPerformancesCustomization‘Getting the job done’DesignBrand/status

2: Value Propositions

What value do we deliver to the customer?Which one of our customer’s problems are we helpingto solve? Which customer needs are we satisfying?What bundles of products and services are we offeringto each Customer Segment?

PriceCost reductionRisk reductionAccessibilityConvenience/usability

A Value Proposition creates value for a Customer Segment through a distinct mix of elements catering to that segment’s needs.


3: Channels

The Channels Building Block describes how acompany communicates with and reaches itsCustomer Segments to deliver a Value Proposition


AwarenessEvaluationPurchaseDeliveryAfter sales

Channels have five distinct phases. Each channel can cover some or all of these phases.

Through which Channels do our Customer Segmentswant to be reached? How can we reaching them?How can our Channels integrate? Which ones will work best?Which ones are most cost-efficient? How are we integrating them with customer routines?

3: Channels


4: Customer Relationships

The Customer Relationships Building Blockdescribes the types of relationships a companyestablishes with specific Customer Segments


Personal assistanceDedicated personal assistanceSelf-serviceAutomated servicesCommunitiesCo-creation

We can distinguish between several categories of Customer Relationships, which may co-exist in a company’s relationship with a particularCustomer Segment:

What type of relationship does each of our CustomerSegments expect us to establish and maintain with them?Which ones have we established? How costly are they?How can they integrate with our business model?

4: Customer Relationships


5: Revenue Streams

The Revenue Streams Building Block representsthe cash a company generates from each CustomerSegment (costs must be subtracted from revenues to create earnings)


Asset saleUsage feeSubscription feesLending/Renting/LeasingLicensingBrokerage feesAdvertising

There are several ways to generate Revenue Streams:

For what value are our customers really willing to pay?For what do they currently pay? How are they currentlypaying? How would they prefer to pay?

5: Revenue Streams


6: Key Resources

The Key Resources Building Block describesthe most important assets required to make abusiness model work


PhysicalIntellectualHumanFinancial

Key Resources can be categorized as follows:

What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?

6: Key Resources


7: Key Activities

The Key Activities Building Block describesthe most important things a company must doto make its business model work


ProductionProblem solvingPlatform/network

Key Activities can be categorized as follows:

What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?

7: Key Activities


8: Key Partnerships

The Key Partnerships Building Block describesthe network of suppliers and partners that makethe business model work


Optimization and economy of scale

Reduction of risk and uncertainty

Acquisition of particular resources and activities

It can be useful to distinguish between threemotivations for creating partnerships:

Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?

8: Key Partnerships


9: Cost Structure

The Cost Structure describes all costs incurred tooperate a business model


Cost-driven

Value-driven

Naturally enough, costs should be minimized in every business model. But low Cost Structures are more important to some business models than to others. Therefore it can be useful to distinguish between two broad classes of business model

What are the most important costs inherent in your businessmodel? Which Key Resources are most expensive? Which Key Activities are most expensive?

9: Cost Structure


Business Model Canvas


STB: Tools & Solution to help the Tourism Industry


STB: Tourism Transformation Index (TXI)

Know yourselfAssess areas of

strength and uncover potential

weaknesses

Get the right support

Targeted STB industry programs

and support

Know where you stand

Benchmark against your peers

and rest of industry

Develop a roadmap Receive guidance to

prioritise critical areas to transform

Elevate the potential of your business to the power of X



STB: ThreeHouse

ThreeHouse is a dedicated co-innovation space built for the tourism industry. Launching in Q4 2020, tourism businesses can seek inspiration and receive guidance on transformation and innovation, as well as co-create and test new ideas here.



STB: Accelerator

Batch 1

Batch 2 Identify and share challenges

or opportunity areas

Leverage on global sourcing

for innovative startups

Get introduced to & work with relevant

startups to pilot new solutions



4

Opening: Welcome to the New Normal


Returning to the Old Normal is NOT the Destination

Re-Imagination is now The New Normal


1. Effective Remote Working

• Remote working is The New Normal

• A: Organise your workforce in a distributed structure

• B: Adopt best practices around collaboration, flexibility and accountability

• C: Stop assuming the old ways will return



2. Just in Time to Just in Case

• Excess Capacity is The New Normal

• A: Re-design your supply sources for just in case

• B: Adopt technology for efficiency

• C: Value-Loss optimisation versus Cost optimisation



3. Online Commerce to Contactless Commerce

• Delivering Goods & Services without Contact is The New Normal

• A: Plan for future Circuit Breakers

• B: Accelerate digital transformation

• C: Find ways to deliver without contact



Adaptions: Hotel Sector

• Guest safety and hygiene will be top of mind consideration

• Manpower access will be restricted at anytime

• Automate & Reduction of Expectations


Adaptions: Attractions Sector

• The world crave for some form of arts, culture and understanding now

• How can we deliver online first experience as a new revenue stream

• Smaller crowd size leading to enhanced experience


STB: Visit Singapore Pass

A single pass to unlock various places of interests

Aggregates the visitors’ purchases

across various sales channels

Unlock deals and

promotions on the go



Adaptions: Travel Agencies (Inbound)

• FIT travellers might want enhanced experience when visiting foreign countries now

• Know that the places they go are safe and they are tracked for contact tracing purposes

• Assurance selling


STB: Tourism Information Service Hub


Visit SingaporeAccount

Enhanced Navigation

Itinerary Planner

ChatbotRecommendation Engine

11 content categories. 5 languages. Over 3,000 experiences

Over 3,000 businesses across 80 countries globally


Adaptions: Travel Agencies (Outbound)

• Domestic tourism might not be as big a market

• What unique experiences can we provide fellow Singaporeans

• Arts & Culture might take precedence

• Might have an initial surge of travelers to travel bubbles

• Population will be careful with funds as well


Adaptions: M.I.C.E Sector

• Scale and Size might have to take a backseat

• How else can the Singapore brand for organising M.I.C.E events be relevant

• Digital + Local market offline experiences


Executive Certificate in Leading Tourism Transformation

1

2

3

Business Innovation - Transforming Your Tourism Business for the Digital Economy

Future of Work - Exploring Cutting-Edge Technologies for Tourism

Data Literacy - Understand the value and importance of Customer Data through Data Analytics

87

Ivan Chang

LinkedInlinkedin.com/in/ivanchangwl

[email protected]


STB [email protected]

SMU Academy [email protected]


• A Post Webinar Survey will open once this session ends

• Kindly help us complete it so we can continue to improve our webinars

Post Webinar Survey

Using Business Innovation to Survive and Thrive Amidst the Global Pandemic

How may Tourism Businesses Adapt to the Challenges of Today?

LIVE WEBINAR by IVAN CHANG 3 JUNE 2020 | WEDNESDAY | 12.30PM - 2.00PM

In Partnership with:

2020-06-03 how may tourism businesses adapt to the ...€¦ · 3/6/2020 · 3 ivan chang adjunct...

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