Travel Weekly has gone one-on-one with Experience Co. CEO and former Tourism Australia boss John O’Sullivan. As in interview him – not verse him in an online game of chess or Battleship.
How are you and the rest of the team going at Experience Co.? Have you been forced to lay off or furlough any staff?
We stood down approximately 90 per cent of our operating staff across our business, which includes full-time, part-time, casual, and contractual labour. We’ve also got roughly 380 people on JobKeeper, and about 50-odd staff active in the business, but most of them are on reduced hours. The executive team have taken a 30 per cent wage reduction, and the board’s done the same.
We’ve been managing the impacts of COVID-19 from about January. Our business had a high percentage of Chinese customers in North Queensland from a group perspective, but in skydiving from an FIT perspective. We didn’t see the impacts in material terms until February, but we’ve had time to get our heads around it and prepare for it.
What has Experience Co. been focusing on during this time?
We’ve been doing some system upgrades, particularly around reservations and payroll, which we’ve needed to do. One of the positive unintended consequences of having no customers is being able to focus on getting your house in order.
We’ve also been looking at our cost structures around each of our different products and drop zones with a view that when we come out of this, we’ll emerge far leaner and be able to generate upside far quicker than we have been.
What new safety measures has Experience Co. implemented or is planning to implement in light of the COVID-19 pandemic?
Safety’s really important for us anyway as a business that’s built around skydiving, and when I started [as CEO], we’d just completed quite an extensive safety audit. We’ve now got dedicated quality and safety managers across our business who we didn’t have before I joined. Also, we are currently in the implementation stages of a new safety management system which will allow us to track incidents a lot quicker.
If you look at our COVID-19 response, we’re getting our drop zones ready with things such as sneeze shields for staff behind counters, distance stickers, hand sanitisers, PPE for staff and contractors. Plus, we’ve developed with the Australian Parachute Federation a whole series of protocols around skydiving.
Does Experience Co. remain committed to the reset of the business heading into FY21?
Absolutely. It’s probably never been more important to simplify our business. We’re about 80 per cent of the way there.
Prior to COVID-19, we had sold off our helicopter business, we’d sold our canyoning business, and really all we had to go were our ballooning business. We’re pretty close on some good discussions on those ballooning assets.
Obviously, COVID-19 hasn’t made the process speedy, but materially we’re already through it anyway, because the sale of the helicopter business was the most important deal to get done.
It’s probably accelerated our costs-out project, too. We’d identified to the market that we wanted to pull out $6 million worth of costs on an annualised basis. We were ahead of that, probably heading towards $7 million, and COVID-19 has allowed us to find a little bit more.
In some parts of our skydiving operation, for example, we’ve identified that we can probably use 40 per cent less staff than we have been in the past.
Again, one of the positive unintended consequences of COVID-19 is that businesses have been forced to operate in ways they never thought that they would.
What shape will Australia’s travel economy recovery take?
When I was at Tourism Australia, the key things we looked at in a market around travel propensity were consumer confidence and the state of the economy that the source market was coming to.
So, I think it will be closely aligned to the general economy, which will be different for our sector because it has traditionally outgrown the Australian economy. I think those days in the short-term will be a bit of a memory, but the medium-term outlook for the sector is still very strong.
People will look to those markets that have managed this crisis well, and I think we’ve been pretty fortunate that our governments here have done a really good job.
What does the future of adventure travel look like post-coronavirus?
I’m still incredibly optimistic about it. People want to have experiences that are challenging, give them a sense of achievement, and do something with a particular purpose, which is where the whole adventure tourism market’s really warmed to in recent years.
What are your thoughts on the recent comments made by Jayson Westbury that led him to resign as AFTA’s chief executive?
They were completely inappropriate comments, pure and simple. For an industry that has so many great female leaders, for Jayson to come out and say that Tracy Grimshaw deserved physical violence perpetrated to her, even if it was virtually, was appalling.
If that was me in my role, I would have been dismissed on the spot. That kind of talk has no place in society, irrespective of the sector. I think the right outcome has been served.
What are your hopes for the future of Virgin Australia?
I just hope that what you see come out of the administration process is what Virgin was beforehand, which was a great competitor to Qantas. Competition is important, because we want people to be able to get around the country, and we all know that if you have a monopoly in an industry, the consumer doesn’t always come out with the winning prize.