The Panic Buying Penalty: How Survival Mode Destroys High-Season Profits

Many tourism operators only manage their stock and purchasing strategy during the quiet months, completely slipping into survival mode the moment high season hits. In this episode, Samantha Smits explains why improvising and panic-buying supplies during the rush is a major risk that quietly destroys your margins. Learn how to keep up structured purchasing habits and implement a clear procurement strategy that prevents food waste, eliminates emergency surcharges, and protects your cash flow before the heavy post-season bills arrive

Connect with Samantha Smits on LinkedIn or her website.

Are you a tourism CEO looking to protect your international contracts and cut daily operational costs? Download your free copy of the B2B Tourism Blueprint here to stop cash leaks, satisfy international agents, and stay ahead of strict compliance rules.

Ready for direct advice? You can plan a Match Call with me here.

Love the show? Please follow, rate, and review The Sustainability Edge: Your Tourism Podcast on your favourite podcast app. Your support helps us reach more visionary leaders in the industry.

The Sustainability Edge is hosted by Samantha Smits, your guide to turning sustainability into a competitive edge.

Transcript

SPEAKER_00 0:00

Buying on survival mode, survival instinct, autopilot, however you want to call it is a very expensive way to run your tourism business. Here sustainability also means predictability. Hi, I'm Samantha Smith and welcome back to the Sustainability Edge, the tourism podcast. No Yargon, no fluff. We're breaking down sustainability and especially how to turn sustainability in a practical tool that gives you more profit, more time, stuff that's staying in a business you can be proud of. Let's get started. Hello, hello, and welcome back. Today we're going to discuss again something that tends to happen in your highest seasons, your busiest seasons, whereas last time we were talking more about equipment breaking down, nor it's more about you purchasing your supplies, your stock. And here it's it's another one of a cash leak. When you are buying purely your supplies on adrenaline, on the moment, what you see, fully booked in the middle of the typical European summer, and they travel everywhere. It's of course very easy to slip in survival mode, as already discussed in previous episodes with a range of different topics. But in this case, it also really influences your buying decisions, how to, yeah, from all the tools and supplies that you need to just get through this busy week and through these busy months. Because you you're afraid of running out while the guests are on site at your accommodation, or with the lunchbox you provide as an operator, or even what you need to have in the office. So even here, you already, like said before, you're too busy, you're looking for corners to cut, and here's another corner that a lot of people tend to cut. They tend to not check anymore what's already in stock, or to make these predictions so well. So here it happens: you or run out of things all the time, or you overorder them, you over-order kitchen stock produce, you don't really check what you use, and this actually comes to food waste, spoilage, and extra costs, or in the case that you don't check properly, that you just run out right when you need something the most, and then your kitchen gets in trouble, or you cannot provide that proper lunch package that you were planning on, or even only a small link to vehicles, not so much because we've discussed last week. Like for the operators, they will grab random spare parts, and while something they still had laying around in their own local garage or shop, just to keep the to have the vehicle moving as quick as possible. The point is a lot of these things are done in a rush based on adrenaline, based on stress, based on panic. But running on the survival mode is one of your fastest ways to basically have yeah, up your high season costs because most of the revenue has already come in before, because clients tend to pay in before, but of course, um you can have some on-site purchases as well. But your bills because of your use are the highest during this time, and they only get higher when you panic by your purchasing, your stock, and all of it, when you're not actually on track with the proper system you have in the more quieter seasons. And of course, you do at such a moment know how much money you approximately will get from certain bookings or have already gotten the averages of what will come on top from on-site purchases. So it's it feels easy to make an estimate. Oh, this will be fine. We can just make these extra orders for the kitchen, and we have big freezers, and true freezing is amazing, but all of it adds on top of each other, and it's quite deceptive as well. And here I mean misleading, because you want to keep something left right. So if you use that number for yourself to justify all we can make extra purchases, then you actually spend the money that you want to keep. Even for the finance department or whatever, it becomes a nightmare when there's so many quick purchases, quick invoices or receipts, some are overlooked. It'll also be a nightmare for tax per tax purposes afterwards, because all of it has to remain structured. No matter on what side of the business you're working on, in the end, it has to go somewhere, it has to be accounted for, and it just becomes one big administrative nightmare, even if there's a full department working on it. So by keeping this practice going, this is the whole argument that we're also used for the equipment and in early episodes, by continuing your good habits in the high season, especially, it's only when it's needed more, it's especially needed more during these moments when you are at your highest performing time to keep up such habits. In this case, if you structure your purchasing and keep calm in keeping the stock and knowing what to order when, you will not run out and you will also not overpurchase because even extremely full freezers will only also need more energy. So, yes, freezing is amazing to make something dusting longer, but there's a balance, there's a thing everywhere. So to stop running out of things or overordering and get more control of your cost, you need to get clear rules around what it gets purchased and when, and keep going with your stock system that you already had before the high season. And I know I'm trying to avoid jargon on this podcast. I have to put one over here. This is what often gets called sustainable procurement, and here it's more about your the whole thing of procuring something, is the strategy behind your purchasing choices, uh, what you buy, who your suppliers are, and there's also here the management of it. So agreements you would have with vendors, the agreements you have, and how much you buy something with stock, and what you have used so far, what you're not using anymore, or even a list of what you will absolutely not use. The whole point is a strategy, there's a system behind it, and not improvisation and panic in the high season and survival mode. And as discussed in the previous episode, how to vet your suppliers, how to select the right ones, and that you're always in the power position yourself, even if you think you're not, to and set standard cycles when you make orders. You can do this on a weekly basis, is usually best, and just keep on top of these things. You will cut if we talk about sustainability arguments as always, you will cut unnecessary packaging, you will cut the spoilage, you will also prevent emergency surcharges, you keep things much more predictable, including your costs, which is a win-win for everyone, and makes things much more manageable during the busiest weeks of the year in your tourism business. So here, when your purchasing or your procurement, as you just have heard about, runs on predictability, data instead of panic purchasing, like the last minute purchases or what people almost say about ladies that randomly buy clothes all the time. Don't use that same behavior. Protect the revenue you already have made before the high season from making the sale, but actually ensure you also get some profit out of it by controlling all the bills and the expenses that you have during the high season, also on this topic on your purchasing site. So, in short, buying on survival mode, survival instincts, autopilot, however you want to call it, is a very expensive way to run your tourism business. Here, sustainability also means predictability, operational predictability to make it sound even more fancy, because that goes back to the sustainability argument of being efficient. Efficiency is using only as much as you need and not more, because that makes anything last longer, which is the core argument of sustainability. And that for this episode and this topic starts with clear rules about your purchasing, for which you could even also come up with a purchasing policy. Most certification standards would even ask you for one. And if I look at one of the sustainability schemes I work most with, Travel Life Operators, their biggest chapter is about procurement, so it's also one of the biggest impacts areas for you. Alright. If this episode has triggered any thought, any concern, an agreement, a disagreement, truly anything, please, please, please do go down into the show notes, find me on LinkedIn or find the link to hop on the call with me, and do let me know, do challenge me, do share your thoughts, do share your situation, no matter how unique you think you are. I would be so excited to learn more about it, to see what I could do for you, and to understand your situation a bit better. Just let me know what's going on. What you also will find when you hop down in the show notes is one of my latest new blueprints where it's controversial, but on purpose titled The First Three Steps to Tripling Your Bookings through Sustainability, because it's based on a case study that actually did so. When you take those three steps first, it brings you a step closer to achieving sustainability certification, which in this case was the tool for this two operator to triple themselves. So, in short, show notes, contact me, share your thoughts, get a free resource, and stay tuned for the next episode. Alright, see you or hear from you. Thank you for listening, and congratulations on investing your time today to think strategically about your future, to make sure you never miss a step to understand sustainability better, how to grow your competitive edge. Follow the podcast right now, and if this was helpful, please leave a five star rating. It will help other people like you to find these tools. I'm Samantha Smith, and I'll see you in the next episode.