After a career in the publishing world, Richard Somogyvari ventured into the travel industry in the late 1990s just in time to face one of the sector’s toughest crises: the Dot-com bubble of 2000. A trying time for all entrepreneurs, this crisis left Richard with nothing but his passion for travel and business. From this challenge there was a push to innovate and Richard Somogyvari came up with a new business idea – one that, 15 years later, grew into an international company with more than 300 employees and branches across six countries. This week, we talked to Richard to learn more about his journey in the travel industry and what advice he has for entrepreneurs to overcome the challenges of the current crisis.
1. You’ve been involved in the travel industry for so many years now. What drew you to this industry in the first place?
I always loved travel. It started after high school when I went to the US on a “fly-as-much-as-you-want” pass they had in the early 80s. I was amazed at the big world out there, so different from the Swedish small countryside village I grew up in. I was hooked. Now everything was about working, saving up, and going away on adventures. I went as far away as I could and hopped islands in the South Pacific and then on to Asia, Australia, Africa. I made many friends and kept going on like this for a few years until life stabilized a bit. But even then, I still travelled when possible. I was a hopeless travel addict! In the end, after I married a likeminded travel addict, we decided to “travel permanently” so we left Sweden for South Africa for good.
2. Tell us a bit more about your own journey in the tourism world. How did you get started, and how did you get to where you are now?
After an initial time in my old industry, which was publishing, I was lured into the travel industry by my brother who was already in that industry in Sweden and we set up a branch of his company down in South Africa. It was the Dot-com go-go years in the late 1990s and everything was possible. We sold airline tickets online and had a viable business already after half a year. However, by mid-2001, investors pulled out as the Dot-com meltdown was under way all over the world. This brought our lives to a halt as we no longer had any income, and we were stuck on the other side of the world. However, my wife and I were not interested in going back to chilly Sweden, so I made an agreement with a Norwegian travel company for a South African license. Their business was selling excess hotel inventory at steep discounts through membership clubs. I liked the idea since it would be a perfect marriage between my interests in travel and business. So now I could do both: travel around as much as I wanted and try to build a business at the same time. On top of this, I always liked bargaining – I never liked paying retail prices and bargaining was like a sport to me. Well, this business was all about bargains so you can say it was a third interest that got into the marriage. The business grew slowly and after 15 years I had 350 employees in six countries doing the same thing. It was now too big to be fun though as 90% of the work was about managing my employees. That is an important aspect of successful businesses, but it is like another business in itself and I was always too impatient to excel at it. I preferred making deals and creating concepts then making them happen and moving on to the next. So, I felt that I had taken the business as far I could and decided to sell while I still had some momentum on my side. I never regretted this decision, but I certainly miss some of the action and the company of some great colleagues at times.
3. The travel industry is facing one of its biggest challenges to date. What are some of the most innovative ways you’ve seen the sector responding to the COVID-19 pandemic?
What I have seen from the industry in response to the pandemic is mixed although I am no longer tuned in as much as I used to be when working full time in the industry. Thus far I have not seen anything that stands out in terms of innovation but, if anything, I would say that this crisis has brought out the best in many of the still-standing entrepreneurs since they have had to come up with survival plans. When the only concern is survival, you get quite creative and ditch all deadwood, vanity projects, etc. The migration to online (and here I include everything IT-related) will be supercharged and will kill off remnants of old ways of doing things in the years ahead. Why spend tens of thousands on business travel when we now know a lot can get done at a fraction of the time and cost with Zoom? Why go back to having five staff doing back-office stuff when we can have all that automated with one person overseeing the whole thing for much cheaper? So, the crisis will fast-track surviving companies to embrace the already existing technological advances much more than in the past – it just plainly makes sense. And this will cover every aspect from how you meet with your clients to back-office tasks, upskilling staff, marketing, and so on.
4. And speaking of COVID-19, when do you think travel will be picking back up in more significant numbers and how different do you think it will look?
The events over the last year are unprecedented so it’s hard to say with certainty when we will be back to normality (however you define that). Many believe that we are back to normal as soon as the vaccines are injected but I am not too sure. A year ago, we were told by the elected and self-elected officials of this world that we would need to flatten the curve with lockdowns for a few weeks and after that everything would be back to normal – it does not look normal to me one year later.
This situation is constantly changing: one day masks are good and the next not so much and then all of a sudden we need at least three masks; one country won’t accept that particular vaccine for their population, only the other one; then vaccines are hailed as the silver bullet and then we must still social distance and wear masks; lockdown, unlock and lockdown again while the next country does the exact opposite; mandatory vaccine passports or just sanitary certificates or nothing at all… the list of current issues goes on. How do we make any forecasts in this kind of fluid environment? And while we are all focused on the virus there is a possible looming financial crisis due to the absolutely incredible amounts of money printed to shore up the struggling global economies. There are now so many variables to consider that any forecast about the future is quite speculative. It could easily take five years before we are anywhere near early 2020 levels in travel, but my hope is that I am totally wrong, and everything will be back to normal in October.
Regardless, the only correct thing to do right now is to focus on what we have right in front of us. If you run a business that has been decimated by the crisis, start thinking like a startup 2.0 with the benefit of already knowing what mistakes not to make. If you are lucky enough to have been spared the effects of the crisis, take two or three aggressive steps forward. Look at all the positives around you; opportunities are always littered all around us, but our minds tend to be a bit closed. When everyone is quite depressed it is always a good time to bargain so use this time to get things cheap. If you don’t have cash be open to barter your assets for things you need and remember that you have more assets than you think – old inventory, spare office, spare time, talents, contacts, reputation, ideas or whatever can be traded for what you need. This is the time to be creative. Going forward things will just be a bit different from the dreams we had in early-2020 but that may not be such a bad thing.
5. Finally, given your vast experience in the sector, what advice would you give to early-stage travel startups right now?
Anyone thinking about a travel (or any) startup should start by asking themselves why they are going to do this. What do you offer that others already don’t? What sets you apart, makes you different and special? And that should be something other than ‘yourself ’as that special ‘something’ because otherwise the venture may never graduate from self-employment to a real business, an asset, that is scalable and that makes you money while you sleep or go on a holiday. So, some critical introspection is a good start. If you still believe you have something you can do better than anyone else and offer real value so people easily part with cash for your services, then make a simple plan with time frames and put it all down on paper so that a 12-year-old can understand it. Make sure you have proper funding, but not too much as excesses are never helpful and limitations help force you to come up with the smartest solutions and ideas. Then, expect everything to cost double and take at least twice the time.
If you can still stomach that reality and accept the potential loss in cash, time, and reputation if things don’t work out, then just take the first steps, and do not overthink things. You will never be able to know how things will go until you try and as things tend to change once you commit, what looked like an impossibility at one stage will look like a walk in the park at a different time or vice versa. You really need to commit and go all in and then stay the course and make the necessary adjustments as you go along (and be prepared for many adjustments). Due to the multiple issues associated with starting and running a business it helps when you really like (or even better, are obsessed with) what you do because as things are guaranteed to get very bad at times, just being in it for the ride of easy money and no inconveniencing won’t cut it. Sorry – running a business is akin to self-torture at times because the sacrifices you must make are going to be real. However, the rewards can be fantastic and go beyond what you expected. Things happen to you, you change, you grow up. Good luck in your endeavors!