African price wars!

[thi9elsp]

Wow, I am on this site to learn from others, share my experiences and when possible provide some help. Sure seems like a few of you have beefs with each other that in my opinion are better left to private conversations. A bit of decorum across the board would be nice.

 

[KWALATA SAFARIS]

[Edited by AfricaHunting.com]

I honestly don't get it, I also don't mind, I was not only voicing my opinion it was what I got from US citizens... And my math still stays there.

I guess cheap internet hunts might be the way of the future, I'm not in that game I have never been.

Simon for the sake of this pointless argument, what don't you agree with.

-Running costs?
-That the weakened rand is going to nail unrealistic hunt pricing to the wall?
-That the weakened Rand is actually horrible for our industry.
- that outfitters have been charging to much money for 15 years when our pricing has stayed relatively stable?

 

[rookhawk]

How did we go from the just plain in-accuarate math and flat out wrong quotes on fuel price,,,,, And the huge advantage and ABILITY of South African outfitter to BOTH reduce prices AND INCREASE profit to... The South African hunting industry is going broke? I call BS.

I'd say it was somewhere between the facts that SA is a raw materials economy and that they are a huge net importer of the basic necessities.

SA outfitters market to Americans and they have to buy such things as PR, marketing, trade shows, adverts, admissions, booking commissions and flights to America in DOLLARS.

And considering that the Rand is worth significantly less today than in the past, most of these American dollar costs have doubled in relation to their net income in Rands.

Then we look at the demand for African hunts by Americans in Dollars being LOWER due to our terrible economy and that is less imported US income for the Africans. And then with less demand for hunting from Americans creates a glut of supply (animals in pens/fences that need to be killed on a prescribed timetable) which drives down prices. It's no different than when HomeDepot was selling $1200 Japanese Maple trees two years ago in their nursery centers for $70. The maples had to be harvested before they were too big/old to move. No demand for them as the new construction economy was/is dead so landscaping is a commodity with an expiration date that must be sold or destroyed.

A 58" Kudu is also a time-sensitive, perishable commodity. If you paid to make that animal and you paid to protect that animal and you paid to manage the fences around that animal, your intent is to sell that animal to a harvester. That animal cannot sit out there indefinitely as the horns are wearing down and he is aging. Value is going down even if demand is consistent, but in this case demand is going down as less people want to hunt them and then supply is going up because people are getting better at growing Kudus.

I'm not aware of a harder job for lower pay that requires more work and more equipment and more risk than being a PH in Southern Africa. Evidence that the industry is going into tailspin is obvious if you look at what DG daily rates were say 5 years ago compared to today. ($1400 vs. $700 often times)

Just my opinion. Data is open to interpretation.

 

[siml]

Jaco, I have no beef, but everyone has there right to market at what prices they want, it's a free market. It's not a price war, it's business. I will tell where I do have beef, is posts like this, all they actually achieve is hunters/ph's/outfitters/ clients going at each other for no dam reason. We have bigger enemy to fight, the anti's!!

 

[AfricaHunting.com]

Wow, I am on this site to learn from others, share my experiences and when possible provide some help. Sure seems like a few of you have beefs with each other that in my opinion are better left to private conversations. A bit of decorum across the board would be nice.

Thank you thi9elsp.

It's OK to have a discussion but I will not allow profanity or the suggestion of profanity and name calling. Gentlemen can have a discussion about controversial subjects or have disagreements but remain cordial and stick to facts, figures and allow individual's opinions to be heard and respectfully discussed.

 

[KWALATA SAFARIS]

Jaco, I have no beef, but everyone has there right to market at what prices they want, it's a free market. It's not a price war, it's business. I will tell where I do have beef, is posts like this, all they actually achieve is hunters/ph's/outfitters/ clients going at each other for no dam reason. We have bigger enemy to fight, the anti's!!

I did not attack anyone else I said it made no sense to me... Read my original post.
Each to his own, I have said that many times here.....

Your direct approach and actions is your baby I maintain the $ is not in our favour economically we will suffer big time heed my words do with it as you may.

 

[KWALATA SAFARIS]

I have often been called or criticized on this site for my strong believes in terms of pricing.

Well once again we are at this very point.
After 6 weeks in the U.S. I am astonished at the pricing that some outfitters have come up with....

Now don't get me wrong, each outfitter is entitled to his own pricing but some of it simply makes no mathematical sense....

I have heard many times while I have been traveling this year, You must remember that the Rand to USD exchange rate works in our favor, well how exactly does that work???

Our currency has depreciated by 45% to the USD in 5 months, the effect of this is not rocket science...

-inflation has been raised by a percent this year already.
-fuel is exactly double and in some cases more than double a gallon.
-marketing cost has gone up by 40% in the last twelve months, 40 PERCENT!
-With SA being a major importer, cost of living will go up by 20% this calendar year.

I have really tried and struggled with the idea as many of us are marketing safaris at rates that were acceptable in 2002.

I just don't get it, I believe it confuses consumers and it will hurt outfitters, especially if it goes the route (posted comparison Zim vs SA) as an outfitter what will you do raise your prices by 40% next season????
An interesting time in our industry indeed, for one I am looking forward to a great season ahead, at realistic industry pricing.

Thoughts??
View attachment 55558

Please indicate who was attacked by who? Moving along swiftly.

Thought as much.....

 

[siml]

Jaco, I don't doubt you one bit that we going into a very difficult time. I use 10 000 tons of maize(corn) a year on the farming operation, plus a lot of other imports, soya, fish meal, lysine just to mention a few, we are already paying 30% more for the imports. We have had to adapt our farming operation, just as others have had to do with the hunting. At least with hunting we are earning dollars!

 

[KWALATA SAFARIS]

Exactly Simon which means we are outperforming imports by 10% by earning $? Is this the correct summation?
Would a continued weakened Rand to the $ not push this even further into the abyss?

My best.

 

[siml]

Hunting is an export product, you can't be losing as much as the average person who doesn't have an export product.

 

[KWALATA SAFARIS]

Cost of living?
Running an operation?

No 30% increase here?
Marketing not a 40% increase there?

I just know what's going out of the account compared to last year, i.e.
Marketing
Definite food increase
Definite fuel
And and...
Earn less land make more money seems to be the way to go.

 

[Ridge Top Ranch]

All I can say is people should be free to charge what they want and the customers will decide if they want to pay. I ran my own business for 20 years and sometimes my margins were good and sometimes not. I cut expenses as much as I could and tried to increase volume with more low margin sales during tough times. When I had less competition in my market I could charge more and when I had more competition I made less.

Much like farmers in the US there is a weeding out of unlucky or inefficient operators. When a number of farmers went broke others stepped in and bought the land. No land was left idle.

My point is in tough times some will go broke and others will prosper. While I like a deal as much as anyone I try not to take advantage of someone in a temporary tight spot.

 

[lcq]

Thank you thi9elsp.

It's OK to have a discussion but I will not allow profanity or the suggestion of profanity and name calling. Gentlemen can have a discussion about controversial subjects or have disagreements but remain cordial and stick to facts, figures and allow individual's opinions to be heard and respectfully discussed.

Can you make an exception for 2 of the worst. Zuma & Mugabe?

 

[lcq]

Cost of living?
Running an operation?

No 30% increase here?
Marketing not a 40% increase there?

I just know what's going out of the account compared to last year, i.e.
Marketing
Definite food increase
Definite fuel
And and...
Earn less land make more money seems to be the way to go.

Jaco your problem has a name, Zuma and his ANC. They are running a once thriving economy into the crapper. Like my first PH said he doesn't vote because it doesn't count, the second is waiting for the revolution.

 

[gizmo]

I wasn't going to post in this because I didn't want to get in the middle of a pissin match. I will say this, outfitters have the right to sell their products for what ever they choose to. That's their prerogative, even if they wish to give something away. If it works for them so be it. It's not our place to judge or even make an assumption on whether a hunt is good or bad just off of price alone.
I've seen a few things here that bothered me, the first is that it was implied buff hunts that are SA and cheaper than those others offer are sum how sub par. In a few circumstances that may be true but absolutely is not the case in I feel the majority of hunts. I went on a SA buff hunt and it was the greatest hunt of my life and yes it was a hellava lot less than a Moz, Zimbabwe, Tanz, or Zambia hunt is. It actually made it affordable for me to do it. These reduced price hunts are going to bring more people to Africa which will be better for the industry.
As far as the Rand is concerned I have a hard time believing that the drop in the rand is going to destroy the hunting industry, sorry. If anything it slows for a lower priced hunt to be offered while maintaining the same profit margins and everyone wins then. It's no different than when a European client comes to hunt with me. The euro is more valuable than the dollar and my hunts are prices in dollars. You have the luxury of pricing things by US dollars which is worth more than the rand which gives you the oppurtunity to offer a better deal than if the tables were switched.
These low ball hunts aren't going to destroy the business and that's obserd. They will come to an end when those offering them can't sustain the cost anymore and they either get with the program or go out of business.
It's a client's market right now, that's business. I'd be for taking advantage of that instead of being upset and ranting that could potentially run prospective clients off. An outfitter can't have their cake and eat it too. That's life.
Jaco, I'm not meaning this as an insult but come on, posts such as this are certainly not helping you. Besides you offer a completely different product in Moz than what the SA hunts are and should be marketing them as such. It really makes it come across that one is simply trying to justify over charging for their services and pull the wool over people's eyes. I would certainly think and hope this isn't the case but that's how it comes across.
Best wishes

 

[Brent in Az]

Every business has different fixed, and variable, operating costs. At the end of the day, all that matters is a satisfied customer, and a reasonable net profit.

It all comes down to what "net profit margin" is acceptable. It is always a fluid situation.

One Safari operator might be satisfied with 20%, while a different operator might want 50%. Hence, the ability for someone to undercut prices for lower margins.

 

[enysse]

At the end of the day, outfitters market for all levels of the economy. Some people have deeper pockets than others. I have come to accept I can not afford some hunts and still retire at a decent age. So I bargain hunt, I shop for what I can afford. It may not be the dream hunt others had in mind, but it's what I could afford. I'm happy that there is a lot of competition in RSA, because it makes it affordable for a average joe hunter. The day it stops catering to that market means I'll likely stop hunting.
I don't compare North America to Africa, anymore because they are too different products. I personally think most hunts in North America are unaffordable to the average joe hunter unless you hunt unguided on public land and that really is not all that cheap anymore either.

 

[johnnyblues]

I've said that 2018 will be my next big hunt because that is when I can afford it. With the prices having dropped and probably going to drop further I'm thinking seriously about 2017 if I find the right deal. I'm afraid I can't afford not to. Wel, that, and I'm looking for any excuse that will work with the wife.

Come join me in 17 we'll have a blast!

 

[Wheels]

Don't you just love free enterprise!

We can create the livelihood we want, that coincides with our passions. We have in our power, the opportunity to succeed beyond our wildest dreams. We also have in our power the ability to fail miserably.

On the upward curve of every market cycle, individuals jump into an industry because they see opportunity and profits being made by others. As the cycle moves past the pinnacle, the marginal companies are shaken out of the industry. If the cycle turns into a major correction, many of the older more stable companies loose their way and cease to exist as well. This allows the young guys with wild dreams, better ideas, and the willingness to work 80-100 hours a week to step in and ride the next cycle to success.

The safari industry is no different. It is a young mans game. Few older guys are willing to work those 100 hour weeks anymore. There aren't very many Danny McCallum's or Roy Vincent's out there these days.

Some of us are old enough to remember the deregulation of the airline industry and the telephone industry. I can now call friends and family around the world at a cheaper rate than I could call them 30 years ago across the state. I just returned from Africa. My airfare was cheaper than I remember it being in the 1970's. Look at the great deals we now have due to deregulation. Do I miss Braniff, TWA, Pan Am, etc.? No, I prefer a carrier that is competitive at prices I can afford. (Even if those transoceanic flights are miserable)

I am not in the oil industry but I do live in the oil patch. Unless something changes in a hurry, 2016 will be the worst year for my business since 2001. Is this my fault? Of course. Have I become a dinosaur like Braniff, TWA or Pan Am? Time will tell. Am I immune from the markets? Of course not. (Please don't feel sorry for me. That is not the reason of this post, and I don't feel sorry for myself.)

To all of you outfitters out there that are trying to break into the industry, or a market segment like AH, with cheap rates, I wish you all the best. You are keeping all the older outfitters honest. (Pigs get fat, hogs get slaughtered.) If you screw clients or offer poor value for the money, places like AH will string you up by the scrotum and help expedite your demise. If you offer good value for the money, perhaps we will share a campfire one day.


CAPITALISM ROCKS! Try it!

 

[Mike70560]

I sell 10 buff a year it is what I have to sell at my price, and they sell, and I'm happy with that.
The 8k buff guy sells 32 has 4 where will the others come from.

Hunters on this thread you make the decision, you decide, no problem with that I do not think that many outfitters for one and consumers really get where I'm at, and where my concerns are, competition is good especially good competition, let's wait for the cull and talk again.

My best.

For years I have preached to book with reputable operators that actually put money back in their operations and are not just there to sell a hunt and leave.
A good example is Sengwa Research. Excellent area, well managed, proper quotas good anti-poaching money put back in infrastructure including water holes etc. and is loaded with game. Right next door is Chirisa. It has been raped with nobody attending to it and basically shot out. Both areas are not fenced. Is it more expensive to hunt Sengwa? Yes it is. Will people book Chirisa to save a dollar. Yes they will.

Price is one of the last things I looks at when booking a hunt. I simply cannot afford a bad hunt they are far too expensive.

Jaco, I hope you hang in there. Sell the quality of the experience. Mozambique is a wonderful destination.