Your tourism business has two main types of assets. There are tangible assets, these are the things you can touch like vehicles, trailers, bikes, kayaks, computers, desks and other equipment and physical items.
The other type of assets in your business are Intangible Assets.
Paul Adams, CEO of intangible asset advisory EverEdge put this webinar together to share his insights and practical advice on how to drive revenue opportunities and mitigate risk of Intangible Assets. We've summed up some of Paul's key points in this blog, alongside our knowledge relating to multi-day tourism, and connecting the value of a ‘fit for purpose’ operating system as a key Intangible Asset in your tourism business.
So what’s an Intangible Asset?
Paul describes these as ‘the most valuable assets on the balance sheet’.
Wow, I can hear you say...”so more valuable than my new bus, my office, and fleet of e-bikes”... Yes. Back in the 70’s and 80’s there was a lot more value given to ‘on the ground’ assets - only around 20-30% on intangibles. But today the reverse is true, the majority of value is derived from Intangible Assets.
"Today Intangible Assets can be as much as 90% of a companies value and are the primary driver of company performance"
There's no correlation between the cost and the value for an intangible asset ...meaning if you buy it for X, it’s worth as much or as little as someones prepared to pay for it... if the intangible asset helps your business run seamlessly (like an efficient operating system) it could be a significant financial asset on your books.
There is a direct connection between
your Intangible Assets and your ROI
Examples of Intangible Assets in your tourism business...
Software
Operating system – like Odyssey
Data base – spreadsheets (yes even them)
Data
Customer lists, history, email contacts, demographics,
Reviews, Referrals, Repeat
Customer status – do you capture enquiries
Connectivity between services like Reservations, Operations and Finance
Confidential information
Trip or Tour pricing strategies
‘Secret sauce’ on tour
Itinerary design
Knowledge
Peoples Mana (Founders, Guides, Staff)
Systems and Processes
Tour Operations ‘know how’
Brand
Logo, Name, messaging
Product design & specifications
Customer Service and Operational standards
Concessions or regulatory approvals
Functions – Email, Forms, Labels, Itineraries
Your NPS
Content
Marketing campaigns and ads
Messaging
Internet
Your website, images, testimonials
Domain name
Let's look at two important Intangible Assets
Data - How do you collect, store and use data.
Paul says ‘the most valuable part of the business is data...the strategic value is converting data into growth’.
From a multi day tourism perspective this data might include confidential information, knowledge, branding, as well as customer and provider data. If you consider each one of these you need to ask yourself how important are these to my tourism business, how do I collect this data, where do I store it and how does my business access it? Does the data seamlessly move from one service to another eg Reservations – Finance - Operations etc?
Software – Your Operating System
Many businesses have this data or information spread far and wide, often this can be stored in someones head (the owner/founder) or it’s in a system that’s hard to access and interpret. If you think your spreadsheets are a valuable asset to your business... you might be surprised that others might consider these as a liability. The risks associated with poor data management are numerous, include leaking of data, coding issues, duplication, human input errors and lost data.
A ‘fit for purpose’ operating system could
be your most valuable Asset.
This diagram is the best way to describe the various touch points a ‘fit for purpose’ operating system can have across the Intangible Assets of your business using Odyssey - Active Tourism Management Software, as an example.
Intangible assets impact your performance, and profits
I like the way Paul describes (in the graph below) the relationship between a strong product and a strong intangible position. This suggests that a strong product can be replicated by a competitor eg anyone can buy vehicles, bikes, kayaks, and set up a depot and office and be in business...right next to you... they can copy what you do in your products.
So how can you be competitive or maintain your market share?
If you have a strong product + a strong Intangible Position eg powerful operating software, system & processes, a reputable brand, consistently high customer service (NPS) and your own secret sauce, then you can still maintain a strong market share in the face of competition. Having a strong Intangible Position will also be useful if you introduce a new product or service, as you have a strong Intangible Position already in place.
How strong is your intangible assets if a competitor walked into town?
What Intangible Assets make your business different or unique?
'... Intangible Assets can amplifier
the value beyond a normal
multiplier formula'
Adding value to exit.
At some point in time, and you never know when that time might arise, you will decide to exit the business. You’ve put all this hard work into the business over years and years so you want to get the most value back. If your business is running on poor data management and operating systems it's likely this will detract from the value of your business, and ultimately what someone would be prepared to pay for it.
Building a business with strong Intangible Assets will increase the value of your business.
The webinar goes into more detail around identifying and managing the risk associated with Intangible Assets.
