What's Going On With Cheap Hunts?

[Hank2211]

If I wasn't friendly with Hank I'd have left him alone.

Friendly? That was, like, yesterday.

 

[Royal27]

I am not going to write about business models, as each outfitter in RSA knows his own finances, which are different from the next guy.

I would say shop around and research, there are so called "cheap hunts" which offer a good experience, as there are so called "high end hunts" which offer a disappointing one, at a higher price.

I will give just one example, it took me nearly four days to hunt my eland, exactly the animal I wanted. A friend of mine shot his as he stepped from the bakkie, a much younger animal, for which he paid twice what I did. Why ? He hunted with a very well known outfitter offering the "original African experience".

@Nyati ,

The interesting thing is you did write about business model. Part of that outfitters model is the "original African experience." The outfitter used that as a differentiator to charge a higher price. No different than another outfitter using lower price to differentiate their product.

I also believe that at least within a country or area that cost of doing business is roughly the same. Now how well a particular outfitter manages those costs or who ultimately pays them is different but not too much difference in cost. If you are talking SA to remote Zambia then it is obviously different.

 

[Hank2211]

2. Commodification of the African Hunting Safari
This has been my most concerning issue over the last few years with the price drops. Is the industry turning into a shopping "experience" at Wal Mart? Is the African hunting safari becoming just another vacation to the Bahamas or a trip with the kids to Disneyland?

In other words are we diluting the value of the product in the process of getting that absolute rock bottom priced hunt?

When I say "we" in the above question, I define we as both oufitters/PH's and prospective clients. If the answer to my question above is yes, then "we" as a whole have only ourselves to blame for devaluing the experience. Possibly to the point it's no different in value than the pretend experience which is Disneyland.

Is that what we really want?

Phil, the question is real, and important. When I read some of the complaints and hear about others, it seems that more often than not, there's a disconnect between what was for sale and what was bought.

Yes, it's true that, as @Nyati said, you can get bad experiences at expensive places and good ones at cheaper places, but in a market as wide open as South Africa's, you won't stay in business long offering low end hunts at high end prices nor, frankly, by offering high end hunts at low prices.

I don't think I've ever criticized another hunter for their choice of how to hunt (if I have, forgive me). But for me, if going to Africa was only about shooting as many animals in as short a time as possible (although I'm happy to cull animals from time to time), then I'd find something else to do with my time. Africa has so much more to sell, and that's what I want to buy.

4. Why do you want to hunt Africa?
It's not for me to tell anyone why they want to hunt there, nor what they should want. But sometimes it seems like some go there as collectors and not hunters. I say that because it seems like the quicker that big really cool beast can be had with the least amount of trouble, the better. That way they can get back home and get that taxidermy underway ASAP so that we can now show off to all our hunter friends who maybe can't afford Africa or you can say "me too" to those that can, or some other motivation. If this is what it's about, I guess it makes sense that you do it as inexpensively as possible. I really don't get this, it makes no sense to me in my mind, but then I probably don't make much sense to others either.

I understand that, and I understand that there will always be a segment of the market which will cater to those, and there's nothing wrong with that. It's not for me.

Maybe I should have made this clear when I first posted. I don't mind paying up for a safari. But when I do, I have very high expectations for the experience. And so far, I haven't been disappointed by those I've chosen to hunt with.

 

[PHOENIX PHIL]

@Hank2211, your last post.....can't find anything to disagree with. My first post as mentioned was of various thoughts in my head, it wasn't directed at anyone in particular, certainly not you.

 

[Wheels]

There are a number of educated, knowledgeable and wise comments in this thread. If I wade in, it will probably just lower the mean numbers of all three.

Enjoying everyone's thoughts.

 

[sierraone]

There are a number of educated, knowledgeable and wise comments in this thread. If I wade in, it will probably just lower the mean numbers of all three.

Enjoying everyone's thoughts.

Even though I post my thoughts, I have to be careful for the same reason!!! This has been a great thread so far with much for some of us to soak in!

 

[rinehart0050]

I have seen people in other industries (building, for example) take on jobs that are losing money just to turn dollars, keep their people working, contribute to the overhead, etc even though they know it will not make money on that particular job. Doesn't make them dishonest, or even that the customer gets a poor job. Just a business decision that short-term looks bad but long-term works.

Very true. Great example is Caterpillar, a Fortune 50 company. For a time, they sold their tractors for less than cost. Thierry business model was to make up for it later with maintenance and repair parts.

As somebody who also is in business, but not retail, let me offer my perspective. I am in farming, which unlike manufacturing, has a "crop" each year that costs money to raise and you don't easily control the production.

Sometimes, there is a surplus supply of a commodity. While hunting buffalo isn't a true commodity, when people are shopping and there are 20 outfitters offering buffalo hunts, it can start to take on a commodity aspect. Some companies will try to decommoditize their product, much like Starbucks did with their coffee, and sell an experience. If you are a luxury outfitter, you are not selling buffalo, you are selling a traditional old school African safari, not a buffalo shoot. The more you differentiate yourself from that group, the less of an impact their pricing affects you (but it will always have some effect).

On the other end of the spectrum are those who ARE in the commodity business. They are moving with the model of pushing down costs and making it up on volume. They might even be willing to take a $1k loss on a buffalo hunt if their data shows that the average buffalo hunter spends $15k on plains game with a 30% profit margin. (numbers are made up - I don't know and could never know profit margins for outfitters as they likely are all different).

Also, there is a cost to holding inventory - especially when there is/was a drought. It is better to take a small loss initially than pay a recurring cost to keep the excess inventory around if you have a feed bill. And if the prices coming down are going to continue, then the first person to lower their prices actually can often gain the most as he sells the most all along the slide, forcing his competitors who finally capitulate to then move their large inventory they have held onto at the bottom of the market. The "race to the bottom" is fast because the last person there often captures the largest loss on his inventory.

That said, there is another saying in the commodity business. Nothing fixes high prices like high prices. And nothing fixes low prices like low prices. When we see high prices in my business, supply is expanded while demand subsides (or supply growth rate explodes while demand growth rate slows or stops). And when we see low prices, we are able to open new markets that get us through the glut and eventually prices recover unless we have become so much more efficient that the cheaper price is the new norm.

What I see in RSA with game ranching is a more efficient way to produce hunting animals. I do not see sable hunts in RSA going back to USD $10k. But that does not mean it will become cheaper to hunt in Tanzania. For all we know, the cheap game hunting in RSA might be the best thing for Tanzania in the long run by getting more people hunting in RSA and the more well heeled of them longing for the old African safari experience of yesteryear. Or, it could make the Tanzanian model unsustainable and force it to fold up shop or the Tanzanian government to ease their pricing models. We just don't know.

As a consumer of these hunts, I want it all. I want the old African experience, but I also want to hunt in Africa a lot of times, so I might choose to go on concession safari for a lot of the animals and make the "Luxury African Safari Experience" hunt the once in a lifetime hunt with the concession hunting to yearly trip, much like I try to have steak all the time, but only go to Ruth's Chris once in a while. There is room for both in this market, but I think that outfitters need to decide on which of the two they are and then compete in that space. I think there are a lot of them that are somewhere in the middle and that is a DANGEROUS place to be. If they don't have a marketing plan that truly does differentiate themselves from the rest of the pack with a brand identity that is more than just the name of their safari company and a logo, then regardless of their intention, they are competing in the commodity space against the low cost, high volume outfitters and that can be a tough place to live.

Great point. I think you're spot on.

I think it's important to remember that the sort of hunt we may be interested in or offering is not what everyone else is interested in.

Some people shop at Kmart, others at Walmart, target, or whole foods. Each of those vendors appeals to a certain market segment. There's nothing evil or less honorable about selling toilet paper for 50 cents or 4 dollars per roll. Different customers are willing to pay different amounts.

I think it's also important to differentiate between RSA and all the other hunting countries.

For my first safari, there was no chance I was going anywhere other than RSA. Bringing the family along meant that there was only so much adventure we were willing to tolerate. Outfitters from other countries didn't need to compete with RSA prices because they are selling a different experience that I wasn't interested in at the time.

As my wife and I consider our next safari, we're looking further afield, to countries that offer a different experience, wilder, etc. Now RSA prices don't really get considered.

We'll probably do lots more safaris in RSA, but we're considering adding Zambia or Moz to our list.

As life goes on, we see ourselves changing what we're in the market for. Promotions and more money mean that while our first safari may have cost around 10k, future ones may have a 30k budget... or even more. Who knows.

I consider safaris to be expirential, not commodity based. I'm going to buy the experience that I can afford. Not everyone thinks this way and if a client has a shopping list, then it's the outfitters job to cater to that if they want that client. If you don't want that client, then don't pursue them- but don't be sad about the profit you didn't get either.

 

[siml]

@PHOENIX PHIL, I sure hope the sun starts shining soon in Phoenix.

Just kidding, some great points Phil and from the other posts.

It's got me reassessing my marketing strategy.

 

[VonJager]

My first hunt in 2011 was an auction hunt in Namibia. It was for 4 days and 2 animals. I went for 9 total days, added another hunter and we took 8 total animals.

The person I was bidding against had won multiple other auctions so no clue if they would have done the same. I am sure my outfitter at least broke even, and most likely made money since he owned the land and Was the PH.

My second hunt was in RSA. My original deposit was for Mozambique but I had to change plans once my father decided to join me. He was only willing to go to RSA. Price didn't really come into it.

I hunted similar species, kudu, Impala, warthog, that I was planing to hunt in Moz but didn't hunt the Sable as I am preparing to hunt that as An experience hunt in Moz or Zambia in the future. Can't go back until 2018 as I am moving cross country this year.

 

[ActionBob]

@HeinrichH , I agree with you.

@Hank2211 , I am having to compete with the low SA prices on sable. it's sad that such a majestic animal has truly become a laughing stock in SA.

We have much higher running costs in Mozambique, battling to keep our heads above water, not going to be able to hold on much longer.

Simon do you really have to compete with RSA sable? I just don't personally see it, but of course your living in the trenches and I'm not. I suspect you are competing more with the logistics and costs of getting there. And perceived risk. When I got up that morning in your camp after a very short night, it was 60 hours until I laid back down in a bed. And with that mixup and ensuing tight schedule to fly out of Mozambique, I was covered in sweat, not from the heat but from the stress of not being able to communicate clearly and dealing with Marxist air Not everyone is willing to endure that kind of travel stress.

To me, your kind of Sable hunt is nothing to compare to a South African penned sable. To each his own, and nothing against the guys taking good a sable in South Africa, and I know they can be made a good hunt. I just don't see it as competing, I think those are different clients. Definitely different hunts. Not everyone fully understands that. And it is much more difficult and expensive to book a sable hunt with you, all in. However it sure makes an attractive add on when selling a hunt such as Leopard when the cost of getting there and back is allready covered.

Don't you think not having elephant, and essentially out of the big dangerous game, only having Leopard available is hurting you more than competition from SA? And the economics of the World and especially of the traditional big game hunters, like oil guys.

In my mind you are competing with other wilder places, like Zimbabwe and Tanzania, possibly Zambia, parts of Central and West Africa.

In fact SA being closed for Leopard is probably helping you....

 

[siml]

Bob, the closing of our elephant has definitely had a major impact.

 

[redassnavajo]

I agree drought has made an impact on many farms but mainly my opinion is RSA has over populated their farms with certain species which as said earlier supply and demand. But there are some outfitter I have seen advertise 7-10 hunt for $500 - 700 all inclusive EXCEPT trophy fees that's where they get you $3200 for a Cape Kudu is ridiculous
and 700 for an Impala , just plain robbery in my book . 7 animal hunt at one place cost $4200 and at other same 7 animals over 10K , are the animals any bigger ? I doubt it but different strokes for different folks, when I go hunting I don't care if they have 5 star resort setup I can do that at home I want to HUNT!

 

[Mekaniks]

My perspective on these less expensive hunts is like this...

When I was in my early twenties I became friends with a lodge owner that catered to scuba divers on a small island off the coast of Belize. He and I had many conversations about marketing strategies and his experiences trying to establish his business as a "remote destination" for scuba divers. When he started out as a relatively unknown in the industry and was trying to get established, in the days before the internet, he essentially had to sell his sole to the travel agency industry. And he did whatever he could to attract new clients and make sure that they had enjoyable experience. Because at the end of the day new clients turn into repeat customers. After a few good years, he had a client base built up and was getting more repeat customers and referrals, then he was able wien his business off of some of the "reduced margin" type of packages and start moving towards more specialized and "larger margin" type of packages that his repeat clients wanted. That didn't mean that he cut out the "reduced margain" packages all together, he just reduced the numbers he offered. He still offered a few discount packages every year to try and ensure that he was attracting new customers as well as marketing to some of the more experienced folks that understood the real value of his offer.

I think most of these "discout" packages that we are seeing are very much the same same thing. Only we are seeing it from an multiple array of different outfitters with very different business models, operating costs, and marketing strategies. Just because outfitter X offers a "no day fee package" with competitive trophy fees doesn't mean that it is a necessarily to good to be true.(proper research always required!) It really could be that he is really just trying to get some folks to come hunt with him, have a good time, and come back someday or send their friends.

 

[Hank2211]

I agree drought has made an impact on many farms but mainly my opinion is RSA has over populated their farms with certain species which as said earlier supply and demand. But there are some outfitter I have seen advertise 7-10 hunt for $500 - 700 all inclusive EXCEPT trophy fees that's where they get you $3200 for a Cape Kudu is ridiculous
and 700 for an Impala , just plain robbery in my book . 7 animal hunt at one place cost $4200 and at other same 7 animals over 10K , are the animals any bigger ? I doubt it but different strokes for different folks, when I go hunting I don't care if they have 5 star resort setup I can do that at home I want to HUNT!

I see a cheap holiday available for someone who has no intention of taking too many animals . . .

 

[ActionBob]

Very true. Great example is Caterpillar, a Fortune 50 company. For a time, they sold their tractors for less than cost. Thierry business model was to make up for it later with maintenance and repair parts.

Yup, some of those tractors took a lot... of maintainance and parts

 

[enysse]

Cheap hunts are a matter of perspective I guess. I use to think by hunting plains game and staying away from those high daily fee hunts I was doing myself a favor. But after 15+ years of looking at hunt specials, I would have been better hunting leopard, one of my top animals I wanted early on rather than now. Cape buffalo could have been added easily! Cape buffalo hunts are very affordable overall still and so are elephant in Zimbabwe.

Plain game hunts have really been super affordable but the glory species are getting more expensive if you want to bring the trophy home, which I do unlike other people.

The thing is you can save your money up for a great hunt in a beautiful area or you can do a number of less expensive hunts. It's a matter of which way you want to do things.

 

[ActionBob]

Bob, the closing of our elephant has definitely had a major impact.

Simon I could certainly see that and have heard you explain it many times. You certainly face an uphill battle there. With all the apparent poaching going on I fear for you that it may never open back up. You know I never saw an elephant, I know a few were around, but nothing like where I hunted them in Zimbabwe and saw tens every day. That operator was employing 9 guys full time on his anti poaching team though. It obviously takes investment of both time and money.

I go back to the point though that hunting in an area like yours, or much of Zimbabwe, and I'm sure many other places.. Is not something that can be compared to South Africa. It took me a bit of an evolution to learn.. South Africa or Namibia may be a great place place to start hunting Africa, but for some of us, it leads to a hunger for more.............

 

[ActionBob]

Many good points made on this thread. I particularly like the analogies made by @mrpoindexter . Being a farmer myself, we have little control over our prices as we are producing a commodity. Yet we can be very successful if we control what we can control. A simple explanation of a successful business model in a commodity production business is to do more volume at a controlled cost than the average producer in your region. Granted hunting should not be a commodity. However much of the South African model really kind of is. What it definitely is, is a capitalist business model. In fact I'm not sure if there is a better example of Capitalism anywhere.

I think it may be a unique combination of capitalism though. One based on a combination of service and production. It is no secret that Wildlife numbers in South Africa at at levels much higher than they ever were in history. All the way back to before White men set foot there. This is due to capitalism and the realization that more money could be made easier by converting land back to wildlife than raising sheep, goats and cattle in that environment. So yes there are lots of ways to do it, all of which have been debated thoroughly here, but it is essentially the economics that have created this abundance. The other part of the equation is service and this to me is what really sets operations apart. Liken it to the hotel business. Different levels of service, different facilities, and different locations all contribute to the costs and prices received. Many successful business models... Who doubts that Motel 6 is successful? Or pick your high end favorite.

There is common ground between them however. They all want to sell that extra room for as many nights as possible. They all succeed on "marginality". The first x number of rooms must be rented out to cover overhead, after that all they need is to cover the marginal cost of what electricity and gas is used to heat water and heat or cool the extra room, run lights and TV, etc. and clean the room. Over and above a rough cost of about $12, it is profit. At that point it goes to the point made earlier in this thread, some decide it is better to make less per item but sell more items. The Desk clerk will be on duty no matter what, the insurance and RE taxes must be paid no matter how many rooms are rented.

Likewise as Safari Companies compete for clients, some have lower costs, others offer high service and/or better experiences. Not all clients are looking for the same things. And not all operators have the same operating costs. And no operation has any God given right to succeed. If their business model has higher cost and they do not offer a better experience or better quality... Why should they be entitled to stay in business?

I do not see this exact same scenario playing out in the real wild places. There are a lot more factors involved there and clients do need to recognize the differences. But that is a clients choice. I just hope he is not being lied to when making that choice.

 

[ActionBob]

If I as a client shops around and find a better deal, what the hell is wrong with that? As I reflect back, my poorest overall experience out of 6 African hunts (so far) has been the one that was with the higher end outfitter with supposedly the great reputation and was not a special. After that hunt, I lost interest in hunting big game in RSA unless it is the only realistic option.

My first hunt was a fairly expensive deal booked through an agent. But I still consider I got great value and would not hesitate to highly recommend the agent, PH, and outfitter. Then I've gone on hunts with guys who were personal contacts and friends... On one hunt, after the first week of seriousness, we joked around that it was time for the "F#%& Around Safari" to begin and just had fun chasing little cheap critters and going at whatever pace and times we wanted.

And the big memorable hunts, elephant with buffalo in Zimbabwe and the recent leopard in Mozambique.. Yea those were last minute deals. But I got the deals because they were offered and I took them. They were hard hunts with no guarantee of success other than no trophy fees paid if not taken (or wounded). I got the deals because I could go and do the hunts with little notice and was willing to go at less than desirable times and tough out the conditions. I perceive those as great value.

I remember well the discussion with the PH on the elephant hunt. It was a few months after the ban for Zimbabwe. He had 5 hunts cancelled. Those were $37,000 base cost for day fees and trophy bull elephant fee. He told me of his disscussion with his outfitter... The PH had a family to feed, his staff likewise. Nothing was coming in. They had a discussion that something was better than nothing. The outfitter agreed, he also needed to keep the villagers and government satisfied and on his side for poaching control. That meant paying government trophy fees, employing local people, and providing legally gotten meat in large volume. It meant selling elephant hunts in spite of the USFWS ban on imports. So they offered up trophy bull 12 day hunts for $20,000. In fact I was offered a second bull for another $10,000 trophy fee. Buffalo was available for $4000 trophy fee and observer for $200/day. Weather was miserable but the hunting was great. The memories are priceless.

At the time there was no way I could justify a $37,000 hunt much less the even higher cost in other places where the trophy was importable. There are still fantastic deals out there. Buffalo in wild places with no restriction on size, get what you find. Hippo and Croc deals, non importable elephant hunts have even gotten cheaper. Are these operators losing money or just making less? I think most of the good operators in these places are doing this to stay in business, feed their families and employ their people. Weather the storm, if you will. Some are even turning adversity into opportunity and starting new or expanding in to new areas abandoned by higher cost outfits.

Right now may be the hay day of hunting opportunities for clients, and with the still strong USD, especially for hunters from the USA.

And lets not forget, the change in the exchange rate on hunts offered in USD has created a huge opportunity for many operators to sell hunts for less USD but still make a good local profit. As for booking hunts ahead with unknown exchange rates, that just takes good business sense(if they want to limit risk). The money can be "hedged" and more likely if proper accrual accounting is used and costs are accounted for in the correct time frames, profits as planned can be assured...

 

[HeinrichH]

@ActionBob
You are well experienced hunting Africa. All this being said, SA always takes a bad rap. Compare those places to areas in the APNR where we hunt. There are no better big game hunting in Africa today than over there, unfenced, and highest population of animals you will find.
Fenced areas you do find some great places which can offer a lot more to a hunt and experience.

I just feel everyone is always quick to put down SA, I've hunted all over Africa, and let me tell you there a reason I am based here. I do however love Zim, Moz, bots, and absolutely love zambia, but those perfect wild African places can be found here as well. Unfortunately not for cheap, looking for the absolute best costs more. But i agree every hunter has different preferences, desires, and budgets, and need to plan accordingly, unrealistic cheap hunts are still the most risky hunt you can book in africa doesn't matter where you go. And the lesser few get lucky to get what they are promised.

My 2 cents