We Are Amsterdam, a tourism operator offering guided tours of Amsterdam, added virtual tours on Zoom to its business model to continue customer engagement throughout the Covid-19 pandemic, while financial support from national and local authorities was essential to stay afloat.
Staying afloat and digitalising travel: the case of a Dutch tourism SME
Abstract
Background
Founded in 2018, We Are Amsterdam is an “in-destination” tourism operator providing a number of attractions and touristic activities in and around the city of Amsterdam e.g. boat tours down the canals of Amsterdam, guided bicycle tours, historical walking tours. The firm has five full-time employees, with 30-35 contract staff being employed over the summer period and other high seasons such as Christmas. The touristic services are targeted towards the Israeli market as Guy Kuttner, the co-founder of We Are Amsterdam, is an Israeli national, with the firms’ services being offered in Hebrew as well as English.
Challenge
We are Amsterdam faced financial challenges as a result of the COVID-19 restrictions. As a tourism SME heavily reliant on the international market, the Covid-19 pandemic resulted in revenue loss due to the suspension of all touristic activities for several months.
As travel restrictions eased, We are Amsterdam faced a surge in requests and demand for bookings to their activities. Updating their live availability, managing overbookings and redirecting guests to partner companies when needed represented the biggest struggle for them in the season that followed. The concurrent use of the booking software was likely to create bottlenecks in their reservations pipeline resulting in unanswered clients.
Digitalisation Path
We Are Amsterdam has incorporated digital tools into its business model since its inception. Many of the firm’s business operations have always been run online, with the We Are Amsterdam website acting as a landing page for consumers purchasing the firms’ services e.g. group tours, boat trips. The website has a list of the touristic attractions or offers, with the bookings and payments made online.
Marketing and communication for the firm have been managed online, often outsourced through third-party platforms. We Are Amsterdam advertises digitally through social media, or digital advertising tools and platforms through research engines, Search Engine Optimization (SEO) and content creation on online travel blogs. In addition to these digital marketing and communication tools, they also use a messaging program with Internet Relay Chat (IRC) features for internal communications and an online booking software. Further, they make use of software products to manage customer relationships and sales.
Approach
Inbound tourism in the Netherlands dropped by more than half between 2019 and 2020, the number of overnight visitors going from about 20 million in 2019 to over 7 million in 2020 (OECD, 2021[1]). Mr Kuttner explained how important it was for We Are Amsterdam to keep up to date with emerging digital tools as the business world is increasingly reliant on them and in. In response to the social distancing measures, they incorporated digital technologies and virtual experiences into their business offering. These initiatives were part of a marketing strategy to increase website traffic and advertise their products and services when travel restrictions eased. Such digital experiences include:
Virtual tools of the Amsterdam canals via a 360-degree camera attached to the boat;
Live online tours of the city for private or corporate groups;
Music performances on their boats, live streamed on YouTube.
Mr Kuttner explained how the use of these digital tools enabled them to better measure work productivity data, as the software they use to manage their sales allows them to monitor the conversion rate (number of leads that actually become customers over the total number of leads) of each sales agent and the revenue they make to the company. He also explained how some of the features of the digital tools they used had well-being benefits and helped them strike a better work-life balance (managing after hours notifications for instance). Finally, Mr Kuttner highlighted the advantages of their digital booking system, where they can connect to hundreds of other Online Tourism Agencies (OTAs) who can in turn promote and resell their activities by using the information about their live availability.
Government Support
The Netherland’s government initiatives to financially support the tourism firm was instrumental to We Are Amsterdam staying afloat. As part of the Dutch government’s direct response to aid SMEs, We Are Amsterdam was given 4 000 euros as financial relief to their drop in revenue. Mr Kuttner explained they used these funds for office rent and small charges that need to be paid regularly. The Dutch government covered 90% of the full-time employees’ salary, which Mr Kuttner shared was essential for keeping his staff employed. Mr Kuttner himself received an ‘Entrepreneur Unemployment payment’ of 1 050 euros a month, an initiative by the Amsterdam City Hall. As self-employed faced sizeable drops in income, direct income support measures such as this one or deferral of taxes were common measures used by OECD countries. For example, eligible self-employed with significant financial losses due to the pandemic received the equivalent of up to EUR 3 000 Euros in Denmark, EUR 1 300 - 1 600 in Belgium and CAD 2 000 in Canada (OECD, 2020[2]).
Moreover, We are Amsterdam was selected to be a part of a start-up accelerator program aiming to help local initiatives solve some of the city’s problems, the SIR program (Startup in Residence) by the Amsterdam City Hall. The programme includes growth hacking and fund-raising courses in addition to an interactive workshop all while using graphic design platforms and other digital tools.
To learn more about SMEs digital transformation
OECD (2021), The Digital Transformation of SMEs, OECD Studies on SMEs and Entrepreneurship, https://dx.doi.org/10.1787/bdb9256a-en.
OECD (2021), SME Digitalisation to Build Back Better, https://doi.org/10.1787/f493861e-en
References
[1] OECD (2021), Enterprises and employment in tourism, https://stats.oecd.org/Index.aspx?ThemeTreeId=10&DatasetCode=tourism_entr_empl# (accessed on 15 November 2022).
[2] OECD (2020), Coronavirus (COVID-19): SME policy responses, https://www.oecd.org/coronavirus/policy-responses/coronavirus-covid-19-sme-policy-responses-04440101/#snotes-d4e3559 (accessed on 16 November 2022).
