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This week we're diving into how Travis Pittman, CEO of TourRadar survived the existential threat that COVID-19 created for them. Overnight, people were locked into their homes, flights were grounded, and TourRadar revenues hit zero. 

Actually, their revenues went negative (more on how that’s possible below), all in just a matter of weeks. Whilst the pandemic is a hyperbolic, one-in-a-lifetime (let’s hope!) event, it taught all entrepreneurs something about crisis management. 

Quick recap on TourRadar 

TourRadar is the world's largest marketplace for multi-day adventures, connecting travelers with tour operators for experiences like safaris, treks and river cruises. 

Think Booking.com but specifically for organised adventures. (Check out our last feature on TourRadar here)

What happened? 

Unless you are two-years old, you already know about the devastating mess that the global pandemic was for every business, but no one was hit harder than travel & tourism.

With 97% of TourRadar’s business being international travel and zero domestic alternatives, they were arguably one of the hardest-hit travel business during COVID.

While companies like Airbnb could pivot to local getaways, TourRadar's core product - guided international adventures - was completely frozen.

Aaaand it showed on the TourRadar top-line. Not only did revenues hit zero, they in fact found themselves with negative revenue. 

If you're wondering how revenue goes negative (we certainly were), here's what happened:

TourRadar had to refund not only customer payments but also commissions they'd already collected from tour operators. Forget about losing your customers, you were now behind the start-line. 

Keep calm (or at least try)

Cash was flying out of the door, and the only thing coming in were more bills. They were working round the clock trying to figure out how to salvage the situation, and Travis felt an insane level of burnout. 

Decisions were being rushed, execution was being micromanaged, ideas not being conveyed clearly due to the no time / exhaustion...

Here’s how they pulled a comeback to remember, when many other talented teams drowned: 

#1 Make less decisions, not more 

When the TourRadar team initially began the firefighting, they were running around like headless chickens. Hundreds of decisions were being made every day with no particular focus, and all breadth with no depth. 

Travis saw a trend, the team was marking everything as “urgent”, which essentially means nothing gets treated as truly urgent. 

He recognized that his being in constant firefighting mode had led to poor decisions, and wasted a week of runway when they had maybe 5 in total.

That’s 20% of their mortality in a couple wasted “strategies”. The company was facing an existential threat, so they had to start prioritising their problems. 

At this point, the number one concern for the business was cash. More specifically, less cash needed to leave the business and more needed to come in, so that's what they focussed on: 

1. More cash in: 

   • Find government subsidies, new investors, grants 

   • Refocus to products that work in a COVID-19 world 

2. Less cash out: 

   • Reduce the cost base of the business through layoffs 

   • Negotiate payment terms with suppliers to hold cash in the business for longer

This simple (and seemingly obvious) insight was the one that saved TourRadar. Instead of giving 10% capacity to 10 things, Travis and team gave 100% to safeguarding their cash position. 

#2 Don’t forget to delegate 

When s**t hits the fan and you really care, you tend to want to be involved in everything.

As CEO, Travis initially thought he had to be in every meeting to do with the firefighting - this was valuable time that could’ve been spent on new revenue, and customer and vendor negotiations. 

His learning: the E in CEO doesn’t stand for Everything. 

Be present where you need to be, but delegate where you don't. 

Instead of micromanaging, Travis created clear ownership areas with specific guardrails for each team: what they owned, how success was measured, and how often to check in.

More importantly, he saw that with each goal (more cash in, less cash out), there was one goal that needed daily oversight, whilst the other needed only weekly: 

1. More cash in: 

   • Target 1: Secure funding across 3 countries, KPI: $$$ raised, frequency: daily 

   • Target 2: Launch a private tour service, KPI: sales / adoption, frequency: weekly

2. Less cash out: 

   • Target 1: Reduce staff by 70%, KPI: $$$ saved, frequency: daily 

   • Target 2: Create a system of credit for customers, KPI: adoption rate, frequency: weekly 

What this did for TourRadar 

(Clearly), TourRadar and Travis successfully survived a time that many other businesses weren’t so lucky to do. Here’s what the impact was:

1. More cash in:

   • TourRadar raised funding from public and private sources

   • Launched a new private tour product to create domestic travel experiences for customers, which is now 15% (!!!) of revenue at €8,000-10,000 per booking 

2. Less cash out: 

   • TourRadar went from 300 to 90 employees, but retained key technical and product talent. Post pandemic, the team hasn’t gone back to 300 people. Instead, they’re doing more with less 

   • Previously, TourRadar would offer immediate refunds to customers. However, during the pandemic they created a credit system with their customers, saving millions in cash outflows, a system still used to date

What this means for you

Whilst COVID-19 was a black swan event, firefighting is very much in the job description of any founder or operator.

Travis’ experience should teach you that as a leader, your role isn’t to execute everything, everywhere, all at once, but instead identify what needs solving, set a course, and let your team execute. 

Remember Travis's golden rule:

If you enjoyed this issue, please share it with fellow founders and operators. Have questions about crisis management? Reach out at [email protected].

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See you next week!

Rahul & Aryaman