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.
www.africahunting.com
