What's Going On With Cheap Hunts?

Discussion in 'Hunting Africa' started by Hank2211, Feb 17, 2017.

  1. HeinrichH

    HeinrichH AH Enthusiast

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    True there might be a cheap hunt somewhere worth doing.... but a client cant take that chance with the odds being against him. Most cheap hunts are exactly that.
    The peanuts and monkeys statement, comes from many years in this industry, experiencing it often.
     

  2. Royal27

    Royal27 AH ENABLER AH Ambassador

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    I think that both @HeinrichH and @Bos en Dal Safaris are right on this one.

    High quality hunts for a reduced price are available for a variety of reasons. The key in Gerrit's statement is that he only offers 2-3 per year. Which to me is very different than being well below market value every day, all day long. The later is a red flag. Something is not the same as the average hunt in that case.
     
    Last edited: Feb 18, 2017
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  3. Biddleman

    Biddleman AH Enthusiast

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    As it has been said a million times, DO YOUR RESEARCH and know what you're getting yourself into. I honestly do not feel bad for someone who books a hunt with a shady outfit and has a shit time. Just no excuse when research and information from around the world is literally at one's fingertips.

    Everyone has differing opinions of the experience they're looking for and how much they're willing to pay. I will never knock on someone who is looking for a "cheap" hunt. It's not my business nor my money. But just don't come back to me crying about a bad experience because you didn't read the details.

    On the other side of the coin, we have all seen hunts that are overly inflated in costs. Again one must do your research to see why a hunt in the same area as another for the same animals, can be so much more.

    Buyer beware on all accounts.
     
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  4. BRICKBURN

    BRICKBURN AH ENABLER SUPER MODERATOR CONTRIBUTOR LIFETIME TITANIUM BENEFACTOR AH Ambassador

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    An answer to this question dawned on me after hunting in Botswana; Market saturation.
    eg. Botswana has few companies and very few supporting the hunting industry, in comparison to South Africa.
    In Botswana there are two taxidermy companies in the entire country. More new taxidermy companies pop up in RSA in a year. There are more Outfits in the Western Cape than the entire country of Botswana.

    Then 7-11 comes to mind. Loss leaders...
    Which leads to the global premise that everyone understands. Which is exactly what you said right here:
    "........ I like a bargain as much as the next guy. And I worked hard for my money, and don’t want to waste it. .................."


    "Chaffed"describes it fairly well.
    I have not read all the other replies, but I'll bet money that Sable will come up almost instantly.
    How do you compare a "small breeding camp" Sable to one hunted from a self sustaining herd or even "wild" Sable?
    The hardest part of the Outfitters job is getting hunters educated.


    There are some hunters that do this. I watched a guy at the SCI show a couple of years ago haggling on one animal price for an uncomfortably (to me) long time. I thought I was watching a used car sale. Is it annoying from the Outfitter side, you bet. Ultimately, it is a business and I'll go back to your comment "...And I worked hard for my money, and don’t want to waste it."

    "........ I like a bargain as much as the next guy. .................."
    As long as this remains part of the general mind set everything will continue.

    This is what will sustain many in the industry and has for some time.
     

  5. Hank2211

    Hank2211 AH ENABLER GOLD SUPPORTER AH Legend

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    Could not agree more.

    Let me pose a question to the who have said they have a less expensive business model and so can afford to offer 'value' hunts.

    Buffalo have a market value in South Africa. Even if you have a less expensive business model, why would you offer an animal at below market rates? Why would you want to transfer that value to someone you've just met and may never see again? This strikes me as a bad business model.

    And for those who say one reason they can afford to offer cheaper hunts is that they own their own land. Your land has value. Don't you look for a return on that value? Don't you deserve a return on that value? If you would charge another outfitter to access your land, then you should in effect 'charge yourself' the same amount if there is no other outfitter. Otherwise, you're better off letting other outfitters hunt your land rather than doing it yourself.

    I understand in a time of more supply than demand people may sell things for lower than the 'market price' just to move the product, but this is not a long term business model in any industry. And believe me, as someone who owns part of a retail business, if you habituate your customers to low prices during the hard times, you won't find it easy to get them to go back up during the good times.
     
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  6. HeinrichH

    HeinrichH AH Enthusiast

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    That is so on point! And a fact!
     
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  7. K-man

    K-man AH Elite

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    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.
     

  8. Royal27

    Royal27 AH ENABLER AH Ambassador

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    "XXX Safari Corporation, a non profit organization "

    That's the only reason I can think of (assuming a long term model).
     

  9. mrpoindexter

    mrpoindexter AH Fanatic

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    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.
     

  10. PHOENIX PHIL

    PHOENIX PHIL AH ENABLER AH Ambassador

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    I was going to sit this one out. But it's raining in Phoenix this morning and promises to do so all day and into tomorrow. We're spoiled here in the desert and just stay inside and wait such weather out. So with only a few last tax things to deal with, it looks to be a slow weekend around here with plenty of time for AH.

    The original post I read yesterday, it has stirred a number of thoughts in my head, so I'll share them in no particular order and with no particular point being made as a whole. Sorry for the rambling nature.

    These are MY thoughts and do not reflect the thoughts of Jacques @AAA Africa Serapa Safaris. So don't consider this as a reply from an outfitter.

    1. Supply and Demand
    When the former outnumbers the latter, prices go down as we all know. We've all seen it one way or another. The most recent example for the world is oil. Oil peaked somewhere in the neighborhood of $140 a few years ago. But that caused demand to drop as well as supply to increase. And now we're in the $50 range for oil. Various factors have led to increase in supply as well as a reduction in demand.

    I think, which is to say I don't know for certain, that a number of new outfitters popped up on the scene in South Africa thinking there was easy money to be made. All you needed was access to some land with critters on it, a place to house all those rich clients, a truck, a PH (of which there was a huge pool) if you weren't one yourself and a friendly demeanor and all that money would just come rolling in. Clients would beat a pathway to your door, so many so that you'd have to turn some away. Supply UP.

    What would have prompted that thinking in the last 8-9 years is beyond my comprehension. In late 2008 the U.S. was facing a banking crisis that had the makings of a repeat of the Great Depression of the 30's. Fortunately a depression of that depth did not come to fruition, but the economic downturn was still nonetheless quite serious. With Obama in office, we came out of that bottom, but it has been a primarily horizontal recovery versus vertical. And the rest of the world has pretty much followed the same path with many countries not keeping up with the slow pace of the economic recovery.

    The average U.S. client pulled back from various discretionary spending avenues. This to include African safaris. Demand DOWN.

    So if this is the situation, then what will these new outfitters do? In the end they're businesses. As I mentioned in a thread lately, all businesses are in business to make a profit. If they're not realizing a profit, they shut down. This is true for any business. These new outfitters who likely have a small client base, who lack a reputation in the business are going to struggle. It's not their fault they don't have a larger client base or lack the reputation of longer established outfitters, they're new and that's the way it goes.

    So they must drop their prices to spur demand. The problem is so will the others and whether intended or not a race to the bottom ensues. And from what I've seen even established outfitters might join in the race. How and when will this end? Will we like what we're left with?


    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?


    3. A Single U.S. Dollar gets you 17 Rand
    Remember when this was the case right at a year ago? There were threads devoted to the subject of the high exchange rate. Many were anticipating lower RSA hunt prices, and I'm sure that happened with some outfitters. Some outfitters didn't play the game, with some of those receiving criticism for not doing so.

    If you were an outfitter that last year priced a hunt for 2018 based on a 16-17Rand / dollar exchange rate, took a relatively small deposit with the hunt to be paid for when it takes place sometime later this year, I wonder how that's going to work out with the exchange rate now being some 20% or so less at 13Rand/dollar?


    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.

    Again not for me to say what should motivate you, but I do think you've left something on the table that is worth much more.


    Have to go play dad......perhaps more ramblings later.
     
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  11. sierraone

    sierraone AH ENABLER SILVER SUPPORTER AH Legend

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    Can't comment on all of your points due to inexperience. But I have seen several hunts advertised during the last two weeks or so stating "No Day Fees". And I have seen male lions trophy fees as low as $5000-$6000 during the last month or two. I can only surmise that if day fees are zero then the trophy fees have to be very high and vice versa. And @gillettehunter I believe was spot on with his point of supply and demand. As a business if I have a $10,000 product which no one is buying, then I will have to reduce cost to a point I can sell it. Obviously this can only go on so long until you have to lock the door and walk away! The final point I would make would, and this would result in the worst outcome, these no day fee hunts are some type of scams and we just haven't figured them out as yet!
     

  12. BRICKBURN

    BRICKBURN AH ENABLER SUPER MODERATOR CONTRIBUTOR LIFETIME TITANIUM BENEFACTOR AH Ambassador

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    Unknown.jpeg
     
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  13. Karoo Wild Safaris

    Karoo Wild Safaris SPONSOR Since 2016 AH Enthusiast

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    Great post. Everyone selling anything should read this.
     
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  14. sierraone

    sierraone AH ENABLER SILVER SUPPORTER AH Legend

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    Agree 100%. But I would propose that we have as many collectors, as we do hunters go to Africa, and could easily be more. I am not suggesting that it is right or wrong, just true.
     
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  15. sierraone

    sierraone AH ENABLER SILVER SUPPORTER AH Legend

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    It is OK Hank, I like you anyway!
     

  16. BRICKBURN

    BRICKBURN AH ENABLER SUPER MODERATOR CONTRIBUTOR LIFETIME TITANIUM BENEFACTOR AH Ambassador

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    If I wasn't friendly with Hank I'd have left him alone. :)
     
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  17. 375 Ruger Fan

    375 Ruger Fan AH ENABLER GOLD SUPPORTER AH Legend

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    A lot of good, interesting comments on this topic. Years ago, I read a book by Mark McCormack called "What they don't teach you at Harvard Business School." McCormack was an attorney turn sports agent and created what is known as IMG today. His first 3 clients were Arnold Palmer, Gary Player and Jack Nicklaus. One of the stories or topics in the book was about knowing what business you are really in. Basically differentiating yourself and carving out a niche of your own. McCormack used a story about the president of Rolex watches to make his point. Read it here: https://businessconfab.wordpress.com/tag/what-they-dont-teach-you-at-harvard-business-school/


    Marketing to your real target market

    Business owners must understand what business they are really in and, consequently, who their target market is in order to optimally motivate customers to buy their products or services. Although often neglected — as if somehow inherently understood — determining which business you are in (and your target market) is probably one of the most important things a business owner should decide. Whether your business is already established or just starting up, knowing which market(s) you should really be targeting can help increase your profits.

    The importance of understanding your real business and being able to think “outside the box” in this respect, was impressed upon me many years ago when I read (and re-read) the book What They Don’t Teach You at Harvard Business School by Mark H. McCormack. McCormack relates the following story regarding what he calls “marketability” (p.113):

    …I was having dinner with Andre Heiniger, the chairman of Rolex, when a friend of his stopped by the table to say hello. “How’s the watch business?” the friend asked.
    “I have no idea,” Heiniger replied.
    His friend laughed. Here was the head of the world’s most prestigious watchmaker saying that he didn’t know what was going on in his own industry.
    But Heinigher was deadly serious. “Rolex is not in the watch business,” he continued. “We are in the luxury business.”

    Mark McCormack explained further:

    To me, Heiniger’s comment summed up the essence of “marketability.” It is knowing what business you are really in and understanding the underlying perceptions that connect your product to the people it is being marketed to.

    In other words, when you know your true business, you will better understand how potential customers relate to your product or service so that your advertising campaign will be on target.

    For instance, if Mr. Heiniger thought that he was in the watch business, then his target market would be everybody who could tell time; he might simply carry more expensive and less expensive watches. On the other hand, being in the luxury business means catering to a select, wealthy, clientele that is looking for quality, durability and exclusivity, perhaps even heirloom pieces. Someone in the luxury business will need a markedly different advertising campaign from someone in the watch business if he wants to attract serious buyers. In addition, to expand in the luxury business could mean anything from introducing high-end designer clothing to expensive cruises, while expanding the watch business might mean selling clocks, stop watches, or replicas of Big Ben. If our watchmaker decided that he was in or wanted to be in the jewelry business, then he would have to appeal to his customers in new and different ways. At the same time he would also have expanded his business opportunities.

    While the business you are in might seem obvious at first, it is often not so cut and dried. Consider the following examples – you think you’re in the computer business, or that you’re a bookseller, a doctor, or maybe even a carpenter – but you might really be in the technology business, the information marketing business, health education, or home comfort. Each of these different business descriptions can take you in different directions; by redefining your business you will be able to explore business opportunities you may never have previously considered or even just learn how to refine your advertising and product mix to properly appeal to existing and potential customers.

    Another benefit to clarifying which business you are really in: the world is changing so rapidly that, with increasing speed, what was lucrative yesterday is often obsolete today. The more clearly (and less narrowly) you define the type of business you are in and, hence, your target market, the more possibilities you will have to weather changes in the business and economic climate. If people start using their cell phones to tell time and, therefore, stop buying watches, our watchmaker-cum-jeweler will still be in business.

    So, what business are you really in?
     
    Last edited by a moderator: Feb 19, 2017

  18. PHOENIX PHIL

    PHOENIX PHIL AH ENABLER AH Ambassador

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    Loss Leader Strategy
    That's nothing new to this industry. Loss Leader events happen at least twice a year in a big way, they're called the "required donations" at DSC and SCI for those that exhibit. The hope of any outfitter that "donates" (I keep using quotes due to the contradicting nature of a required donation) is that either the winning bidder will hunt additional animals/days that at least a break even point is reached and/or it brings in more business and thus a return on the investment is realized.

    I would submit that anyone who is going to the auctions on a regular basis knows this is the game. Some appreciate the discounted hunt they received and do reciprocate that in the form of additional business. Others I've met make it a goal to win as many auctions as they can and don't give a rip whether or not the outfitters stays in business or not, just so long as they're around for their hunt and they get their animals.

    In the end I'm not sure just how many of these LL offers you can put out there before your putting your business at risk. Then again if things are so bad, you may see it as your only way to survive.
     
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  19. Nyati

    Nyati AH ENABLER AH Ambassador

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    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".
     
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  20. Hank2211

    Hank2211 AH ENABLER GOLD SUPPORTER AH Legend

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    $1.50 for the same at Costco.

    Is that the business anyone associated with hunting wants to be in?
     

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