Tour Operators: How to Prepare for an Uncertain Future

Chip Broyles:

Thanks for joining us on today's webinar. We appreciate you spending part of your day with us. Let me introduce a little bit of who's on the panel today. Before I do though, I just want everybody listening to know that there's a couple of housekeeping options here. There's a chat box that you can use to chat amongst yourselves but there's also a Q and A area, somewhere on your little task bar there with Zoom meeting that you should be able to ask a question to the panel and we will do our best to answer. But on the call today with us is Brian Merrill. He's joining us from normally sunny Utah but from what I can tell, it looks like there's a little bit of cloud and even some snow out there in the sky.

Brian is the CEO for Western River Expeditions, a multi-day tour company operating trips in the Grand Canyon. He also helps run the Moab Adventure Center, which is a tour company with operations based out of Moab, Utah, where they facilitate taking guests on all kinds of tours and activities, included guided hiking, mountain biking, zip lining, rafting, horseback riding, hot air balloon rides, you name it. A host of all kinds of things. Mike Smith joins us from Northern Vermont. Actually he runs an operation in Northern Vermont but he's joining us from his home in Michigan.

Mike is the managing partner of ArborTrek Canopy Tours, which is nestled in the hills just North of Smuggs Notch Resort and Ski area. Mike is an expert in the world of canopy tours and aerial adventure park building, maintenance, risk management and operations. He's helped build or start dozens of companies throughout the western hemisphere, is a board member of ACC, former board member of ACT, which is the association of challenge course technologies. Mike is also well versed in website design management, digital marketing.

We've also got Eric Wise joining us from his home in Western Idaho where he helps run and manage a handful of companies, in both Idaho and Oregon. That includes Orange Torpedo Trips, Whitewater Cowboys, and Eric is an advocate for at risk and disenfranchised groups and currently acts as the board chair for LEAP, which is an organization that creates opportunities for healing and growth through immersive wilderness programs that support people affected by significant health issues and psychological distress. ACT, With everything that's going on right now, I think we're probably all kind of qualifying right now for ... we're all going through a little bit of psychological distress. But I just wanted to start with each of you. Just find out how you are personally and where you are mentally right now. How's everybody holding up? Brian, how are things in your neck of the woods?

Brian Merrill:

We're doing all right. We're in a pretty good place to self isolate and my kids are all doing well and sheltered up where they are. This is the first Easter we've ever had without all three of our children home. Everybody stayed where they were and trying to do our part. But I think we're all holding up pretty well psychologically so far.

Chip Broyles:

Good everybody's... I know Mike, you mentioned earlier you decided the kids complained they were bored and so you of course took out the hair clippers and went after them. Is that what you were saying?

Mike Smith:

Yeah. Cleaned up the hair and the tears. Wasn't okay at first try but I haven't had a lot of practice in cutting hair in a number of years [crosstalk 00:04:02].

Chip Broyles:

That took care of itself. What about you Eric? How are you in your neck of the woods?

Eric Weiseth:

I mean, good. Living where I do in Idaho, if you're going to be holed up somewhere, it's a pretty good place to be. it's pretty easy for us to get out and roam around. We have a bit of space to roam and get outside. It's nice. Granted it's also snowing here today, so-

Chip Broyles:

Oh, it is.

Eric Weiseth:

That's kind of a downer I suppose.

Chip Broyles:



Yeah, it dropped. I'm in Sandy Utah, just on the South side of the Salt Lake Valley. Got awakened last night. Well I wasn't quite asleep yet but I was laying in bed reading to the kid and the house started shaking because we had a 4.1 something earthquake again, another earthquake that we ... On top of everything else we've got a few things that are happening outside of our control that don't make it any easier for us to ... But as far as I can tell, we're holding up okay. Governor Herbert did announce yesterday here in the state of Utah that soft closure for schools for the rest of the school year, which I anticipate just means that's it. My wife and I are the new school teachers for the rest of the year. We'll see.

What is the current state of your tour operation?

Chip Broyles:

Well, let's go ahead and get started and talk about a few things. We've talked about ourselves personally. What about your businesses? Where are things? What have you told your guides as of right now? Brian, you're in the Grand Canyon so you're regulated, I mean, outside of Moab, in the Grand Canyon with Western River Expeditions, I mean park service calls the shots on that. What do you know about your operation down there right now?

Brian Merrill:

As of now we know that the park is closed or the river operations in the park are closed through May 21st. They've told us that's a hard and fast date. They are going to reevaluate regularly as they go along. But they said they have no intention of shortening that. And then in Moab, which is where the Moab Adventure Center and all those tours are based out of there leave from, [inaudible 00:06:19] close through May 4th. They are reevaluating as things change. But we've sort of just conceded that we've lost May. We're planning as if we're not going to be operating in June, with the exception of our Grand Canyon multi-day trips we have not canceled trips beyond May 21st but we're trying to remain optimistic but that's our status currently.

You're right, we're at the mercy of what the national park service does. The BLM has also closed the river stretches and the off road stretches where we operate with their permits. They even took another step and sent us a notice saying that our permits were suspended during this time. I don't know why the extra step other than that, I guess if we decide that we were going to run a tour, we would now be in violation of our permit, which I thought we would have been anyway, but it seemed like a little overkill. But that's where we are.

Chip Broyles:

What about, is it the same where you're at Mike? Have you got a hard and fast date that nothing's moving till then or is it just a little bit more fluid and you're making those decisions? I think he might be muted. Let me unmute. There we go.

Mike Smith:

In Vermont, we're not a very big state, so we're not only dealing with regulations from our state but different orders from Massachusetts, New York, New Hampshire and then of course the border to Canada is closed, where we draw a lot of customers from. Although our hard and fast date right now is May 15th. However, lodging is not allowed in the state of Vermont to book reservations online until after June 15th. We're conceding that we won't really open until June 15th. Now for us right now, this is stick season, the snow is melting out. There's not a lot of tourism. It's really a maintenance period for us. We're hoping that we're allowed to start going back into the woods and do maintenance soon. For right now that's prohibited as well.

Chip Broyles:

Okay. Eric, the same thing?

Eric Weiseth:

Yeah. I think we, in the same way that Brian has Moab Adventure Center and Western River Expeditions, you have some diversity in what you offer. We have a pretty solid spectrum of things and they all kind of have different ... We're looking at different timelines on the different things. Our guided trip stuff, we've basically canceled everything through May 15th. Some of that was forced on us by the BLM being closed and with statewide stay at home orders even if the BLM hadn't closed like the Owyhee, we were canceling stuff anyway because we're not going to try and operate when the governor is saying you should stay home.

So that basically shut down our April and early May season. And so we've canceled basically everything out through May 15th public guided trips side and we're suggesting so far to everybody between May 15th and the end of may that they should look for a date later in the summer, try and push them back, multi-day, single day, everything. So our anticipation, we're anticipating guided trips at the earliest is going to be June and it's probably going to be a slow start. Granted all of that depends on the governor in Oregon opening things back up, which they haven't suggested really a timeline on that front.

They are saying they're working on it, which is great. Here in Idaho, just today, the governor here extended the stay at home order until the end of this month. It was going to end today and they extended it two weeks. So reevaluate then. But from a guide trip side, I don't think anything is very realistic until June. On our rentals, we have a big rental business and a big shovel business where people running trips on the road river in Southern Oregon, and we're right now getting phone calls about people wanting shuttles and we're not doing them.



We've turned them down because of the stay at home order. We don't want to encourage people traveling to our area, that kind of thing. So we're not doing it, but our hope is that the governor opens things up a little bit and then we can have some comfort to start doing those [inaudible 00:10:54] and RAF rentals as well for locals. We have big local contingent who will come out do day trips, the river's open. So I could see that market being there starting in May sometime.

How are tour operators dealing with cancelations?

Chip Broyles:

You mentioned people moving trips and encouraging people to move trips. How did you deal with that at the beginning? Were people just calling up and immediately canceling, or were you all encouraging people to move to later on? And how successful was that? I'm just curious, was there any incentives that you were able to kind of leverage? Instead of us giving your money back, maybe we can do this? Did you try that at all Eric?

Eric Weiseth:

Not so much. I mean, I think there's some people out there that have done move your money and you'll get 10%, the same trip you were booked on is going to be 10% cheaper next year or that kind of thing. We have dealt with a lot of forest fire issues and stuff over the years, and so a couple of years ago we got hammered pretty hard on refunds because the river was closed for fires. So we changed to a pretty hard, no refund type policy on multi-day stuff and really encourage buying travel insurance and all of that kind of thing. So I think we start our conversations with our people with a here's our normal policy, which is pretty hard.

And then because of this, we're doing things a little differently and it's a personal conversation we have as folks. Every person I think. We also got out front early, the day after the NDA shut down, we had stuff on our website about here's where we are, we want everybody just to calm down. Let's let this play out a little while. Let's not start making decisions on things in July. Let's see where this goes. And just we're very sort of forward about that and people reacted to that really well. They were encouraged, especially people early on that we were calling them to talk about it.

And in the stuff we've posted, we've put things in there like we are a small family business. We really would appreciate everybody, like you're buying gift certificates for your favorite restaurant in town to help them out, delay your trip, don't cancel it, support these rural communities that need you to come to them eventually by just delaying your trip. And people have been really responsive to that.

Chip Broyles:

All right. Brian, people book the Grand Canyon trip sometimes year, year and a half in advance, if not even longer, and your trips started there would have started this month, is that right?

Brian Merrill:

Our first launch was supposed to be April 1st. Yeah, we've already lost yeah. We're already into the season there and once May hits, we're into our busy season where we're going as heavily per week as we do throughout the rest of the season. And we've taken a similar approach to Eric other than we don't have a lot of experience with fires and things, so this is kind of our first mass cancellation event. But the personal contact that Eric mentioned has been key for us, calling every one of those people that have reservations and discussing with them what their options are.

And we have given them the option to move to ... We were able to add in some boats later in the season. The park service has made a concession to allow us a slightly larger group size to the rest of the season. And so we're able to move some people here and there. But mostly it's about moving them into 2021 or even 2022. And it's a challenge, when you have a group of 10 traveling together or a full charter, or they've chartered the whole trip, it's tough to find space for them. But we've had great success, and I wish I had the percentages in front of me, but the majority of our people have chosen to stay with us and move. And to leave their money with us. And then on the trips that were actually canceled where we've made the choice to cancel a trip, in this case it's because we don't really have a choice but we've offered them a refund.

But we are keeping the initial deposit, sort of like Eric said. We have our cancellation policy and normally, we're pretty strict with it. Otherwise you just get pushed around a lot and people who want to cancel for any reason. And that's a tough line to walk here. We find ourselves ... I mean it's always tough enforcing those cancellation policies because you hear a lot of compelling stories and we've given our people a little more flexibility in this case. Truly somebody lost their job and on and on and on, we've given them some flexibility but for the most part we're at least keeping the deposit. But having those personal conversations and we're finding great success with that and people are glad that we're reaching out to them and they still want to go on a trip.

That's the thing we realized early on, most of them still want to go. Now we're starting to get into more of those people who are just completely freaked out and regardless of what's coming or not, the unknown is too much and even if we're a hundred percent confident we're going to run that trip at the end of August, they still don't want to go. And so we're having to deal with that and taking a little harder line with them and saying, "Hey, the trip's going, you're probably going to be able to fly. Social distancing things will probably be more relaxed by then. We're not ready to cancel yet." But it gets harder and harder.

Chip Broyles:

One of your business associates is listening in and said that 22% have chosen the expedition credit. Mike in your case, have you guys just ... I mean, as soon as shutdown started happening was it just refund everybody? Or what about the folks that still kind of have ... Are they still on the books or is everything canceled and off the books now for the summer? Where are you percentage was with that?

Mike Smith:

Sure. Once this started happening, most of the groups that we had on the books for late spring, early summer were our camps and our schools. And they were returning guests year after year, they typically pay a deposit and then the full amount prior to coming out. But in this case we've refunded them. They've good loyal customers. We know they'll come back out, but we also know they're under strain from budgets and trying to figure out how to run their businesses as well.

This time of year is when we really start booking up the summer. We just haven't seen a huge influx where you have a number of calls coming in now for large celebration events for corporations, 40 or a hundred people wanting to come out, celebrate that they're back together. We've had some conversations with them, but we don't really know if we'll be able to honor those agreements or not. So at this point we've really scheduled them in and we'll see how it goes as we get nearer to that date.

How are tour operators dealing with new bookings?

Chip Broyles:

Right. That was one of the questions one of our listeners had was they've started to see the phone ring a little bit with people inquiring about things. Kind of like Brian where you said, people want to go. But yeah, are you turning them away or do you just say, "Hey look, you're welcome to book, but we don't know what's going to happen."

Brian Merrill:

Yeah, and Chip backing up a little bit. We sort of have three options. One is, if we've canceled the trip, they can just cancel and get their money back minus their deposit. This is on our multi-day trips. We've been just giving money back on day trips, but most of that business happens once. People show up in Moab, we don't get that many advanced bookings on our day trips. But so it hasn't been as many, but on the multi-day trips, they have the option of moving with no penalty, we'll honor this year's price if they move out into the future and commit to a date.

If they can't commit to a date, we've offered an adventure credit. So basically we're just keeping the credit on our books and they can use it on a future date. Now we've limited that to through the 2022 season. But with the idea that they can get their act together and then get back to us with a date positive, a date certain in the future. And then we have an incentive that we offer of giving them an additional 10% credit if they'll take that option. But that's sort of something we haven't publicized, but our people on the phone have the ability to offer that.

Chip Broyles:

Well too late, it just got published. We won't send this out to everybody that's booked with Moab Adventure Center. No, I appreciate you sharing that because I mean that is a real thing. Mike, I know you have some concerns about the idea of do you sell vouchers now? Is there any positive income you can create? But there's a downside to that. I mean, yeah, there's an upside, but there's a downside to that, isn't there? That people need to think about if they're thinking about trying to create some positive income.

Mike Smith:



Well, I think you need to know what your potential liabilities are and what the state laws are that you're in. For us being on vouchers now means we may have to give a refund on that voucher at any time. And so it's giving us money right now, but it's not really money that we've earned. And so we're going to pay taxes on it now despite the fact that it's not earned. And we may have to return it so it becomes a bookkeeping issue. And if we have enough cashflow to carry through without doing that, I would prefer to use the cash in hand, and avoid getting ourselves into a potential liability for later.

How to operator your tours with restrictions on group sizes

Chip Broyles:

Makes sense. Well, let's just move for curiosity sake, let's say that we can come back in the next few months and you are starting to get these tours out there again. But what if it comes down to a scenario where you're allowed to operate but you have to operate within the original idea was that groups of 10 people or less. Have you thought about that in your business right now? Could you come back and operate trips that way? Is that even possible Eric in your operation are there ... Obviously a rental going out okay, here you go take your equipment and you can have it, bring it back and you sanitize everything. But when it comes to trips and tours, and guided activities, is that even a possibility if it was smaller group concentrations?

Eric Weiseth:

So I think we've been talking about this a lot in sort of different groups of Outfitters that I participate with of what are the best practices that we can do? And we're looking at it all the Outfitters in Idaho they're Outfitters and certain sections we're in, we're all getting together and we're working on lists of what are the ways that we can change our operations or what are the ways we may need to change our operations to meet what are sort of the guidelines of today acknowledging that we don't know what the guidelines of the future are going to be? And what would be deal killers and what are things we can figure out how to work around.

So I think there's kind of the plan based on what you know today, but leave it open to adjust, go to the future. And part of the advantage of doing that, and this is the one that actually has me the most concerned, is we're seeing some of the federal agencies saying that they are going to instill certain requirements into your permit operations. And anybody who has had some of these agencies decide what is important and what is not, has probably experienced where maybe some things have been done with good intentions but without a real understanding of in field implications.

And so we are being proactive in contacting our permit administrators and saying, "Hey, when it comes time to open up when we operate, we acknowledge that we're probably going to have to change the way we do some things. And here's the things that we're thinking about." And so far those have been really constructive conversations that we're having with them where they're really receptive to our ideas versus them taking their ideas and just trying to put them on us.

One was, if you run a trip that's bigger than 10 people, you're going to have to sell three different kitchens and spread everybody out. We went to them we're like that is dumb and it's actually going to make things harder. We're going to be able to be less spread out, less safe, all those things for these reasons. And so they were totally receptive. So I don't know exactly what it is. I would say we're talking about do we run just one family group per raft? So ... Sorry, instead of six or eight people into a raft, are we just doing one family group of four and that's the cap or two groups of two spread out on each end. We're talking about that conversation.

We're talking about are we serving meals separately instead of here's dinner and you walk through the line and get your food. Is it plated and is it brought to your family group, wherever? But to be honest, the one that all of us have gotten the most hung up on, the one we can get our head around the least is getting people to and from the river, transportation. The days of putting 14 people in a 15 passenger van feel like they might be gone for a while, and that has it's concerns. Our friends who use buses I think have some other options. We are not a big bus user just because the roads we drive on are not terribly bus friendly. So I don't have that one answered yet, but I think that's the one we're all getting hung up on is how the hell do we get people to and from the river.

Chip Broyles:

Mike you've got a scenario where people are showing up on property, right? You're not having to transport them to the canopy tour or anything like that. Is that right?

Mike Smith:

Now, for the zip line tour we are having to transport people in both directions. For our tree top obstacle course and our climbing adventure and team building, that's all done on site. So now we're looking at scenarios where for the zip line tour rather than selling it per seat, what we will likely be doing is selling it per departure. So whether you have one person or eight people, there'll be a set fee for that departure and the clients will have to, if we're required by the health department, certify that they're all from the same household.

Chip Broyles:

Right. Brian, Eric mentioned already starting to talk to government agencies that regulate in his neck of the woods. I know you're a part of the GCRG or the Grand Canyon River Guide association. You guys been having meetings and discussing things like that or not even approaching that yet?

Brian Merrill:

Yeah, we've had conversations about that. Mostly our efforts have been along some different lines, trying to get some accommodations from the park about being able to recover lost use. But yeah, we're having those discussions and they've asked us to come to them with what does reopening look like with our ideas? The same way that Eric was talking to his regulators and the Moab agencies, BLM and park service there as well as have asked the Outfitters for their thoughts on what operations should look like going forward. And it really varies depending on the activity.

We have some activities where our margins are better and so you can run a smaller group and still be okay. Not as good as you were, but it's worthwhile doing it. But others where it's a challenge and we'll have to decide can we operate that tour? If the best we can do is our tiny little groups that are just not going to be profitable. But the same kind of thing as Eric is talking about, we're confident that in camp we can keep things sanitary and that we can socially distance properly if that's still the thing.



On the boats is the challenge. And that's another one where you start running into inefficiency issues. How far do you go? And you have a smaller number, lesser number of people. It takes more guides, it takes more vehicles if you're having to spread them out in the vehicle, it's a challenge.

Is it a good idea to talk with other tour operators?

Chip Broyles:

In both cases, I mean, obviously everybody is doing a lot of internal discussions with their own teams and their own managers and owners and whatnot. How much are you talking with Eric, you mentioned something about round table discussions you've been a part of. How much are you talking with other tour operators that normally you might consider your competitors? Is it important to be talking with them right now and setting a framework for maybe when we all come back, this is how we all want to kind of operate these trips so that we're all speaking the same language. Are those kinds of discussions happening even now?

Eric Weiseth:

Oh yeah. No, I mean, I think that's honestly I feel like this has been the age of the webinar, and here as we do one. And there's lots of great information to be gleaned from webinars and especially this one. But the most important thing I've done probably in the last three weeks is meet with fellow Outfitters. So again, because we've dealt with forest fires and all sorts of other stuff in the past on the Rogue, a number of years ago we started an organization of Outfitters where we have one annual meeting and we have like a Google group where you can send things out and it goes to everybody.

We're able to speak as one voice to ... The idea was to speak as one voice to our administrative agency, instead of a bunch of different Outfitters. And over the years we all became really good friends through that. And we're meeting once a week, every week now. We've got kind of an agenda of things we go through on access and on marketing and on whatever, all these Outfitters, and it's been amazing. A lot of the best ideas I've had the most encouragement we've had, the best conversations around how do we open up? What's it going to take to open up? What can we do to help pressure the federal government and the state government or lobby those for whatever our needs are? Those all come from those conversations.

So and as I'm thinking about from an operational standpoint, one of the groups in there sat down, they got five Outfitters together and they spent like three hours saying, "Here are what we think the best operational things would be." As we open up or start to open up the conversations I'm having with people is they're nervous. I'm getting calls asking how are you going to change your operation? And if we're all aligned, then those conversations are going to be better with people.

If we as a community can come out and have new press releases, all this stuff about we as the Rogue river Outfitters are doing this so that this place to help bring it here and socially distance, all that kind of stuff, that's going to help ease people's minds. Because I think there's a couple of pieces to this opening back up. There's solving the health problem and having actual solutions in place to allow people to travel and all that. But there's also going to be the mental problem of people being scared and wanting to stay home. And we have to do things to proactively demonstrate that we have their health in mind, to give them comfort to get out of their house and come to us.



And so working as a community, we're doing that, we're doing that in Southern Oregon with the Rogue and that's been great and really encouraging. It's like a mental health thing for me to have those meetings every week. And then the state of Idaho has Idaho Outfitter and Guides Association and they're doing the same thing at the state level there for all Outfitters. And creating sort of here's best practices and starting those conversations. I'm a huge believer in this industry, we are not competitors. We are competitors against cruise ships and Disneyland, all of us. We should all be working together to make the pie for all of us bigger. I'm not interested in taking a client from other rafter. I'm interested in making more rafters so we can all grow. And I think this is just another great example of the time where we should all come together and build everybody's businesses.

Will people just stay home or want to travel?

Chip Broyles:

Right. Well, Mike, Eric mentioned something about being able to talk to people and instill confidence in them when the time is right. I think in a previous conversation you and I had, you mentioned something about after 9/11 that there was a lot of folks that just stayed home. I think we were talking about summer camps and whatnot and that they weren't sending their kids to summer camps the same way they wanted their kids to stay home so they could spend some time with them. Obviously just a best guess, but do you envision the same sort of thing happening like it happened after 9/11 or will people have been cooped up with their family option B? I pick B, that they'll want to get out? What are your feelings on that? Anything at this point?

Mike Smith:

Well, I think you're going to see a huge spectrum of people, people that want to get out and really won't care to follow the social distancing. And then clients that are really nervous about the social distancing. In the aerial adventure park community, we're fortunate to have the Association for Challenge Course Technology and a magazine called Adventure Park Insider, which we're putting together a bunch of huddles and meetings so we can talk about this. Yeah, wonderful. But we have a lot of concerns of how do we go ahead and sanitize the harnesses and the helmets and the gloves and the trolleys and all this between uses.

So I think this is going to change not just short term, but longterm thinking about how we do all of this and how we run our business. I've never been a big person to about safety and use it as a marketing ploy and my opinion's kind of the same on this COVID, I think you have to have a very well written script as to what you're doing. But I get really turned away as a risk manager when I go to a site and I see people say stuff like, safety is our number one priority. Well, if it was, you probably wouldn't be running a zip-line business.

The reason people come out is for adventure and to accept risk. I think when you need to do is very clearly identify and communicate with them what are the risks and how are you trying to mitigate those? And it's up to the conversation between you and the customer as to whether both of you are comfortable entering into it. I'm far less worried about protecting our customers. I'm much more worried about protecting our staff.

Chip Broyles:

That's a good point. Yeah, plus you're also, your operation is right up there near the Vermont border, I mean the, the Canadian border with Vermont. I imagine that the first travelers are going to be people within their own country. So what's the border like there with Canada? I mean, is it just shut down? I mean, people are used to being able to go back and forth. Is that all different now? I'm actually not in the know about that.

Mike Smith:

Well coming into Vermont right now if you're coming in from out of state, you're supposed to quarantine for 14 days. So travel's kind of shut down altogether. But now my expectation for the Canadian border is travel probably won't open freely till both countries are fully open, staying as widespread and available and there are better protocols that we can put forward. So we're not expecting a lot of customers coming in over the Canadian border, but we're also very close to New York, Massachusetts, Connecticut, Pennsylvania, all the areas that have seen the highest case loads.



And so I think there are a lot of people in our communities that are very anxious to open up, to get the economy running again. But at the same time, I think there's a real risk that if we open up too soon and allow people in and we're not really cautious, it's our locals that are going to take the brunt of the hit.

Are you starting to focus your marketing on local markets?

Chip Broyles:

All right. What about Moab Adventure Center Brian, have you guys started to talk at all about potentially when the time comes really reaching out to locals and people in the state of Utah? I imagine you get people, there's two national parks there in the Moab area, and you probably get people from all over, especially with the Mighty 5 campaigning that Utah does. Have you begun to think about how do we focus on the local market at all? Is that anything that's starting to come up in conversation?

Brian Merrill:

Yeah, I think that's going to have to be the strategy. I know the state of Utah, they've pulled back on their marketing, and trying to be sensitive to that, but they're trying to time their reaction into the advertising and marketing, and they've done a bunch of research. And they're going to target Denver, Phoenix, Las Vegas within Utah, and salt Lake and stuff. They're going to target the region. They're going to go in heavy and focus on the drive market. The people who can drive to the state of Utah and to places like Moab, and I think that's, yeah, I think that's what we'll have to do.



Back to the 2008 discussion, the summer of 2009 and after the market crashed or the summer 2002 after 9/11, we saw a shift to where our day trips had a bit of a boost, while our multi-trips were down. Because it was more of a drive in market and people doing things that were more affordable, things they could access easily because they drove there and we could see a shift. I think we're going to have to be ready to take advantage of that shift because there will be people who will just be too afraid to fly.

How has the Paycheck Protection Program impacted tour operators?

Chip Broyles:

Right. No, for sure. The planes and I was a part of a round table discussion the other day where they were talking about even when the airlines won't be in a hurry to push too many flights because they don't like to fly planes empty. So they won't be adding as many flights necessarily. They'll want to fill up the flights they have going before they start adding more rotations of flights, and that's something to consider. We certainly have a unique opportunity I think here being Outfit ... All of us on this call today are part of Outfitters that are based out of the US and so we have a good pool of people to talk to here internally inside the country.

But yeah, I think people traveling across borders. I think I noticed that I was going to right before all this happened, I had gotten a new passport for my wife and the kids. My kids needed a couple and I started to put that in, but I didn't. And then I just noticed that the state department isn't even issuing new passports for the time being, unless you can prove that it's a family emergency of some sort. So it's interesting. We did have a couple one or two people reach out a question about the small business loan stuff. So I'm assuming that everybody here has applied for the PPP, the Paycheck Protection Program. Have you started to see that actually come in or is everyone still waiting or what has been your experience?

Brian, I know you've been with the America Outdoors Association for years and as a past president of the America outdoors association. I know you've got your hand in a lot of discussions with regard to all of this. What's your take on how things are right now?

Brian Merrill:

Yeah, I'm hearing the full range of people who got completely funded as early last week. They all seem to be with Chase bank by the way. Chase was a hero organization. It seems to come down to who you're banking with and how quickly they got their act together and there are some delays that are just because of the program and it's difficult to roll out such a massive program in a hurry. But others that are getting funded now and others who haven't really heard much since they've put in their applications, it's the full range.

We put in for two different loans and we've had one funded and one not so far. So I don't know, I think we stayed in close contact with our banker and him trying to find out information and that was super helpful to some extent. You get some hand carrying of some of our stuff across the line, and so that was really helpful if you have a good relationship with your banker.

Chip Broyles:

Well, and you mentioned that because this funding comes from your local bank, having an open and frank conversation and continuing to stay on top of them is key because that local bank is either making or breaking your situation. And it was tough for a lot of them at first, they didn't get the approval that they could go through. Chase was an early proponent of that. Mike, did you mentioned to me in one of our conversations that you ended up having to reapply or something like that? Is that what I understood?

Mike Smith:

I have applied for three different companies now, and two of those which were with local banks, the banks became overwhelmed. And they have required me to reapply for a third party lending platform. And so both of those were resubmitted. But yeah, it's delayed things quite a bit, which in the long run, provided it goes through maybe in our best interest have it delayed a little bit longer so that we can get past where the present day opening date is likely to be. Because right now, if we got it today, we probably wouldn't be open till after that eight weeks, and so I don't know that I'd be able to ramp up do the number of FTEs I need to.

Chip Broyles:

Right.

Brian Merrill:

Chip, I don't know if you saw Carl Deck just put a little-

Chip Broyles:

Oh no, I didn't.

Brian Merrill:

It popped up said that his has been funded and he also got the $10,000 advance from the SBA disaster loan, two different loan programs and they made a deal where you could get if you applied, you could get that automatic 10 grand up front. He's received that, he's first person I've heard that actually got that so.

Chip Broyles:

All right.

Eric Weiseth:



I know a couple people that have gotten that emergency one in the last couple of days and we're supposed to get ours on Friday.

Has this situation given you time to finally take care of things you never had time for?

Chip Broyles:

Okay. Yeah. Well, I'm glad you saw that because I didn't see that coming across my radar here. Well last couple of thoughts. People have been trying to clean house a little bit where they can. If you've got access to your warehouse and you can do some things. Mike you mentioned you don't even have access to your course. Well, are there some other things that you've thought of lately that you're like, "Oh, I'm so glad I took the time to do that." Or having somebody in the organization do things like that website content. Anybody have any comments about that?

Mike Smith:

This time of year is always time where we're trying to get all of our marketing pre built for email, and e-blasts and stuff so that's all behind me already. I've got that caught up. But I think it's one of those I have a checklist of things that I've always been meaning to get to and things that I'd like to update that I'm not getting through pretty quickly as far as risk management forms and compliance and stuff like that. I think a lot of operators should take this time to look at the things they do well, and maybe the things they put off and what I find a lot of programs do when I do risk assessments is they do a great job of running the program, they do a terrible job documenting what they're doing. And so this maybe a good time to catch up on documentation.

Chip Broyles:

That makes sense. Anything else to add Eric?

Eric Weiseth:

Yeah, I mean we're kind of doing the same thing. We onboard a decent number of employees every year, we have about 100 employees between two states and onboard probably 20 to 30 new people a year out of that. And that process has always been pretty good, but it's kind of very hands on like I'm teaching you this thing. And so we started with an organization called Training Wool a couple of years ago, or a couple of months ago, it's an online onboarding staff training software where you can put videos in and all that. So I'm 70 hours into that process, which at the same time is going through it made me realize, hey, I need to update this policy or I need to change this whatever.

But we're building this whole online training thing for new employees to come in where our long term goal is if I get asked a question twice by anybody, it's because we didn't train well enough across all capacities in the business. It's actually kind of nice to have this time, especially as we're getting towards onboarding season, and my head is kind of in that space to really dive into redoing all of our training and onboarding stuff.

Chip Broyles:

Makes sense. Brian, have you guys done anything like that? Every half mile or so in the Grand Canyon seems like a guide is walking up to tell some story or Interp about whatever layer of rock is about to come out or whoever got this rapid named after him. That sounds like a good opportunity as well. Have you guys talked about things like that at all?

Brian Merrill:

Yeah, so we've been talking for a while about, hey, we need to really film our interpretive talks, specifically used for training and to create some consistency. Anybody who's ever had guides knows that sometimes these interpretive stories evolve over time, just strangely, but every once in a while you have to have a reorientation where you teach people the real story again. But we're taking this time to do some of that, to prepare some of that.

Now like Mike, we don't have access to all the resources where we go, so it would be nice if I could send some senior guides down the river and just have them film Interp talks all the way down. It'd be wonderful time to be able to do that. But that [crosstalk 00:49:50] now. So we're going to have to do what we can. There are places we can access or places that sort of look like that we can do some more generic stuff. But yeah, we are taking advantage of those kind of things. There's not much we can do in terms of maintenance and getting ready for the season because we were ready.

Chip Broyles:

I know.

Brian Merrill:

We were ready when we got shut down and we were like, now there's really not much left to do. So yeah, ideally, we can create some good content.

Chip Broyles:

That'd be nice. You could take the Bill BelKnap Waterproof River Guide and just go through it mile by mile and inform your senior guides. Well, what would you say right here at mile 132?

Brian Merrill:

Yeah.

Chip Broyles:

Well, I appreciate your time guys. I'm going to give a little plug for a week from today, April 22nd. We're going to do another webinar round table. We're going to be talking about COVID-19 and liability and waivers. Do we need to rethink our waivers? How do we talk about this? We've got Leah Corrigan, who is a lawyer familiar with the outdoor travel industry especially, she talks all the time at the American Outdoors Association gatherings. We might even have June, June Wright who has joined us before on previous webinars, so we're looking forward to talking about that and discussing some of the liability issues with going back to work, and what does it mean, and how do we protect ourselves in that regard from a lawsuit point of view?

And of course, everything is a fluid situation, everything is changing. But Gentlemen, I really appreciate your time today. Thank you. Any final words anybody want to say? I would say to all of you just wash your hands, and keep social distancing. But any final parting words of good cheer for anybody out there? [crosstalk 00:51:59]. Go ahead Brian.

Brian Merrill:

I'm choosing to remain optimistic, I have to for my own well being. But I think there is a significant segment of people out there who are going to want to travel. There are all kinds there are those who are totally freaked out about it. Those who see an article like I saw this morning popped up on my feed that said, hey, experts are saying it's a great time to purchase air fares. Pick the time when you're confident that you'll be able to go and there's some deals out there right now, and I think there's people who are going to take advantage of that sort of thing, and we're counting on that.

The drive in market, I think we have to prepare ourselves for a positive turnaround and at the same time being realistic. But this could be an opportunity to make something happen on the backside of this too. We saw that, we picked up some market share after the market crash in 2008 that we've never given back. It wasn't our objective to go out there and dominate the market afterwards, but we kept their foot on the pedal on advertising and we were brave, and we were a little aggressive and it paid off. And I think there'll be an opportunity on the backside of this to do something like that too.

Chip Broyles:

You're absolutely right Brian, the companies that either already are strong or those that figure out how to stay strong and can, will be stronger in the long run. There'll be others, you'll need to know what your breaking point is. Mike, you mentioned in one of our talks that we had, you need to know how to run your own numbers, you need to be able to look at things and be honest with yourself isn't that right?

Mike Smith:

Well, I think you need to know what your risk and what your potential exit point is. I'm less concerned about when we open coming up right away, as to what do we do if our staff gets sick? Because once we turn on the spigot, we're then encouraging another level of expenses. And if we have an outbreak in our own staff, it's not just training your staff to take care of the patrons that are coming in and forming those, but to do that internally and to make sure that you're hiring staff and that they understand the risk if they go out and party at night or socialize, and they're not protecting themselves and their loved ones that can really shut down the business very quickly again.

Chip Broyles:

Right. Eric, some final parting thoughts?

Eric Weiseth:

Well, I think I'm really optimistic. I think hopefully we'll be operating by June, I feel really optimistic about July, and I think people are really going to want to get out of their houses and go do stuff. The driving thing is really spot on. We're going to really focus in on driving stuff. The parts of my business I'm most worried about is stuff where most people fly to. But I do think people are going to want to get out. And I think the idea of going to Disneyland, or going on a cruise ship is not going to be what people are wanting to do, but going to the woods with a small group of people may sound really appealing. I actually think we could have depending on how quickly people can start moving, we potentially could have a really banner summer. And the other thing I would add is come back and listen to Leah next week because she's outstanding.

Chip Broyles:



Oh, right. Yeah, in fact, somebody asked again, so next week, same bat time, same bat channel, one o'clock Mountain Time. Three o'clock eastern doing the talk with Leah Corrigan and talking about waivers and whatnot, and COVID-19 and liability. So anyway, thank you guys. I appreciate your time today and everybody on the call. We'll make this recording available to everybody that's been here. But thanks again and we'll see you next time.