The Bakpaker Blog

We now have over 50 discount and bonus offers in our database from hostels and travel companies around the world.  Smaller, more off-the-beaten track destinations such as Accra in Ghana, Riga in Latvia, Tallinn in Estonia and Reykjavik in Iceland seem to be making an appearance along with more classic destinations such as Sydney, Rome and San Francisco.

Here is a summary of some of the latest deals to make backpacking cheaper for everyone.

Free nights accommodation from Scotty’s Beach House.

10% off at Tallinn Backpackers or 20% off if you’ve been to the Sisters of Mercy concert

Stay 4 nights, Pay for 3 from Westend Backpackers

15 Free Beers with Every Booking from Jolly Swagman Backpackers

10% off daily rental rates from Lost Campers

Have you seen any discounts or bonus offers in your travels?  If so , let us know!

Why is it that some businesses are more successful that others?  Why do some start and fold like a firework rocket exploding in the night sky while others seem to last the test of time?  The answer is simple - successful businesses have some sort of competitive advantage they can defend against the onslaught of competitors.

What is Competitive Advantage

Put simply, competitive advantage is anything your firm has or does that makes it better than your competitors in the eyes of your customers.  Perhaps you’ve got a great location, lower costs, better service levels or more money in the bank that the other guy.  Every business needs some sort of competitive advantage in order to survive but unfortunately that’s not enough.  To survive and prosper in the long run, you need some kind of advantage that is difficult for your competitor to buy, copy or learn; and one that is easy for you to defend.  You need a Sustainable Competitive Advantage.

Competitive advantage can take many forms.  According to the resource based theory, firms are collections of resources - physical, reputational, organisational, financial, intellectual & technological - the combinations of which offer some level of advantage against competitors.  Occasionally, these resources may offer a sustainable competitive advantage because they are valuable, rare, hard to copy and non-substitutable.

Sustainable Competitive Advantage in Hostel Distribution

There are hundreds of hostel booking engines on available on line and like most industries, the distribution of revenue amongst them is anything but even.  In this case, the online booking channel is dominated by HostelWorld and HostelBookers and between them, they account for the vast majority of online hostel intermediary sales.

How did it get this way?  Well,it wasn’t because they were the best.  Just like the superior Betamax technology loosing out to VHS, there are much better booking systems available that don’t generate nearly as much revenue.  Their navigation is poor and both sites look very out dated.  Neither fulfil the customers needs completely - there isn’t enough information to make a properly informed buying decision for example.

Interestingly, their success has more to do with the limitations of hostels than anything they do themselves.  These sites rely on heavily on network effects - the more users they have, the more inventory hostels will give them and the more inventory they have, the more users they can attract.  Inventory, and the time it takes hostels to load it into the various systems, turns out to be a valuable resources.  Hostel owners are busy people who will only spend the time loading rates if they can expect bookings in return, making it rare, hard to copy and non-substitutable (a new booking engine can’t just invent more availability!) - all the attributes needed for sustainable competitive advantage.  Even more interesting, the source of their sustainable competitive advantage is something that they don’t even own, yet can still defend.

Businesses that rely on network effects for competitive advantage need first mover advantage.  HostelWorld started in 1999 and HostelBookers in 2002.  Because they were first, they have always been the ‘biggest’, even when they were quite small.  This created a virtuous cirlce of more traffic = more inventory = more traffic until the point today where access to inventory is the single biggest barrier to entry for competitors. HostelWorld and HostelBookers will remain the dominant players until a competitor or new technology changes the rules of the game.

Even sustainable advantage isn’t permanent

While it might be called sustainable, the sources of advantage can quickly change.  The great thing about market competition is that it drive innovation and new technologies and processes can quickly change the rules of the game - just ask Kodak or Ford.  In the case of HostelWorld, their advantage would be quickly diminished if the time and availability constraint of loading inventory was reduced.  Perhaps a group of smaller competitors could band together and develop a standard interface where hostel inventory could be updated once and exported to all booking engines?  This would be a serious blow for HostelWorld and would force them to compete on different terms.

So what’s your business’ competitive advantage?  Is it sustainable?  Remember, the only truly sustainable advantage (short of government fiat) is the ability to innovate faster than competitors.

Brisbane, Australia.    If the credit crunch or looming recession have you putting your holiday plans on hold, think again.  Aussie travel start-up bakpaker.com, has recently launched a novel way for budget travellers to save money with a range of tour and hostel discounts for backpackers.  Bakpaker.com aims to make travel cheaper by eliminating all forms of commission and booking fees and making it easier to deal with the supplier directly.

Distribution in the travel industry has traditionally been dominated by intermediaries like travel agents and booking engines.  “Every year, travel industry suppliers loose hundreds of millions of dollars in distribution costs to intermediaries” say founder Dave Kinkead.  “We think travel would be more enjoyable and cheaper if this money was spent on creating a better experience and offering a better deal for the customer.”

Bakpaker.com aggregates backpacker discounts and bonus offers from around the world and publishes them online and in social media.  “We want to make it easy for the customer to find the best possible deal” says Mr Kinkead.  “Previously, if a traveller wanted to find the best deal, they would have to visit every hostel or tour company website.  Now, they just need to visit our site, subscribe to our discount RSS feed, follow us on Twitter or become a fan on Facebook and they get all the deals in the format of their choice.  And because we don’t charge customers or suppliers any commission or booking fees, they know that they are getting the best value by booking direct.”

Launched only a few weeks ago, Bakpaker.com is already offering bonus offers and discounts from hostels and tour companies in a range of destinations from Accra and Adelaide to Sydney and San Francisco.

About Bakpaker.com
Bakpaker.com publishes a range of tour and hostel discounts for backpackers.  By aggregating discounts and bonus offers from travel suppliers from around the world and eliminating all forms of commission and transaction fees, Bakpaker.com makes it easy for backpackers to get the best deal by booking direct while  reducing distribution costs for suppliers.  Based in Brisbane, Australia, Bakpaker.com can be found at http://www.bakpaker.com

Contact:
Dave Kinkead
Managing Director,
Bakpaker.com
+61 431 946 160 (Australia)
http://www.bakpaker.com
dave@bakpaker.com

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I’ve being trying to avoid twitter for a while now.  Personally, I find the idea of spending even more time on the net and away from the real world abhorrent.

But I gave it a go recently and I do see the appeal.  So we’ve made version 1 of our new twitter app that publishes the latest bonus offers and backpacker discounts to our twitter account.  This extends the reach of our bonus offers even further.  Keeping things to 140 characters is a bit of a challenge but we’re pretty happy with the result so far.

Version 2 will be quite interesting but I can’t share more owing to dramatic suspence.  Follow us to keep track of discounts and tell us what you think.

It is easy to view your staff as an expense. Along with facilities and maintenance, they form a large part of your monthly outgoings. But that mindset can be dangerous and debilitating for a business in an industry that increasingly relies on customer feedback and user reviews to generate new business.

One of the earliest theories in management science was that of Theory X / Theory Y. Essentially, this management concept boiled down to two points

• If you expect your staff to be lazy and self-centred, and treat them accordingly, you’ll be proven correct.
• If you expect your staff to be proactive and organisationally focused, and treat them accordingly, you’ll also be proven correct.

At its crux, Theory X / Theory Y held that organisational behaviour is driven by management attitude and behaviour. And while ideas from management ‘science’ can never be conclusively proven like in physics or chemistry, day-to-day evidence of this theory abounds.

A business owner or manager who leans toward Theory X will need to spend considerable time and effort to supervise, monitor and devise ways to ‘control’ his staff. One who leans towards Theory Y however wont have these problems, but will have to deal with the idea of staff making decisions that she would have made differently herself.

The management style of a business is immediately noticeable in any hostel reception or where front line staff interact with customers. Its evident in how quickly they answer the phone, how responsive to customer requests they are and the general ‘vibe’ of the place. I’ve even heard of it being described as ‘Nietzsche Time’ at Wombat’s Hostel in Munich – interacting with customers to talk about anything including philosophy. Businesses like these have fewer staffing problems, happier customers, better word of mouth and ultimately, better profits. Yes, it requires a different outlook, yes it requires you to give up some ‘control’, yes, you will need to incentivise your staff differently but the rewards are great indeed.

What is the management style of your business like? Do you lean toward X or Y? Most importantly, are you happy with your choice?

We’ve just launched our new facebook page.  We want to use this and other social network applictions as a distribution platform for backpacker discounts and bonus offers.

One of the great things about our zero transactional cost model is that we can try new ways to help businesses reach their customers.  While a pay per click or pay per booking model results in the intermediary trying to ‘lasso’ the customer before sending them to the supplier (less commission and booking fees), we can do the opposite.

So we are now syndicating bonus offers and discounts on our facebook page where fans can then share them with friends.  This really extends the possible reach of our partner’s offers and can generate them traffic and it doesn’t worry us if they skip our site all together.

Again, one of the key elements of success with this page will be positive network effects.  Essentially, the more fans we have, them more businesses will offer discounts, the more fans we will get, etc.  So take a look, become a fan and tell us what you think.

Sorry U2 fans but its true.  There has been a lot of talk amongst the chardonnay sets in Europe and the US about how long haul air travel is bad for the planet.  While at first glance there seems to be some logic to this argument, it is one rolled in a thick layer of hypocrisy with a healthy sprinkling of fallacy and contradiction on top.

Firstly, lets look at the facts about backpacking.  While they may travel far and wide, backpackers travel for longer, often over 12 months at a time.  This means that while they might be getting drunk on yaks milk in Ulaar Butaar one month and before popping mushrooms on Koh Phi Phi Ley the next, their carbon footprint is much less than those that choose to spend monday to friday sitting in traffic before flying overseas for a weekend or short break.

Interestingly, the group with the largest carbon footprint, those doing the most to contribute to global warming, tend to be those that espouse the argument of less travel for the masses.

Lets take our mate Bono.  When he isn’t wowwing us with his insightful lyrics and pushing the boundaries of sunglass physics, you can find him criss crossing the world, saving us from aids, Afirca, poverty and the most horid scurge of all - uncoolness.  So how does he get there?  Private jet mainly although he has been know to rought it at the pointy end in First Class.

So how does the carbon footprint of First or Business compare to what backpackers experience back in cattle class?  Size is important (isn’t it girls).  A typical flat bed in business class will use the same amount of space as about 4-5 economy class seats.  A first class cabin on BA is even worse with 16 seats taking the same space of 140 in economy.  So flying first class is almost 9 times worse for the environment that flying economy in terms of carbon emissions per traveller.

So to all those people that prefer a fine Reisling to a cold beer and who think we should limit air travel to save the planet, why don’t you do something more effective to combat global warming like trade your Range Rover for a VW Polo.  You could even give the money left over to charity.

Sometimes one could be forgiven for thinking that some businesses don’t need any more customers.  This could be true for some operators in the backpacker industry (think Sydney hostels over NYE, Munich hostels during Oktoberfest) but for 99% of everyone else, too many customers is a problem they would LOVE to have.

Despite this, the vast majority of hostels and tour companies continue to put up barriers between customers and themselves.  A case in point is how easy (or difficult more often than not) it is to book a bed or tour from their websites.  Google ‘hostels in Xyz‘ and see just how bad it is (of the first 10 results for Brisbane, only 2 could take live bookings!)  Here is an example from a typical site on many hostel’s web booking page

PLEASE NOTE:
You must allow at least 48 hours for your booking to be confirmed - for faster confirmation, contact us directly by phone. Until confirmation, we cannot guarantee the room and dates you request will be available.

To translate this into what the customer actually reads

PLEASE NOTE:
Any communication with us with be punctuated with delays of at least 48 hours.  For faster confirmation, stay awake until 3AM due to different time zones and blowing you monthly cap on international calls, contact us directly by phone. Until confirmation, we cannot guarantee the room and dates you request will be available so you are better off booking on hostelworld.com who will take 10% of what should have been spend on a better customer experience.

Why oh why does this still happen?  The internet as a commercial medium has been around for over 10 years and yet most hostels are failing to give the customer what they want - INSTANT GRATIFICATION.  If you are a hostel/tour owner/manager who puts time and money into marketing your businesses, why do you tell the customer to effectively *$&% off when they finally come to your website?  Maybe you don’t want the extra customers instant answers and booking confirmations would bring.  Maybe you are happy to pay 10-25% of revenue to booking engines and agents and see your profits cut in half.  Maybe you just don’t know how easy this is to fix.

Even if you are not a technology person, there are lots of solutions out there.

• You could by a system from your room management software provider.  Depending on the system, this will cost anywhere from $500-$5000 per year.
• You can use one of the many booking systems out there such as gomio.  These generally charge a fee of 5%-10% of the booking value so isn’t that different to pointing your booking button link at your hostelworld or hostelbookers page.
• You can use one of the major booking engines ‘free’ booking systems like backpack online or powerbooker.  These integrate your room management system with your booking page but you need to give them access to at least 15% of your inventory (not great if you have periods of high demand).
• You could also try bakpaker.com’s new commission free booking engine.  Its a light wieght booking system that you can just cut and paste onto your own site and is free to all bakpaker.com partners.

So, there you have 4 options of various price and functionality.   All of which are better than wasting equiries by making your customer wait for confirmation.

Everybody knows backpackers are tight arses.  I was one myself for many years.  There is a certain kind a masochistic romance that attaches itself to the idea of rocking up late at night in some foreign land or  distant shore after a 15 hour flight or bus journey cramped between an obese man with a perchance for garlic based cooking and an amphetamine popping single mother who insists on feeding her brood of 3 sugar laden treats and red cordial, with only a few dollars, dong or tugriks in one’s pocket - or secretly stuffed down ones underwear to thwart those ever crafty pickpockets.

A quick google search shows that there are well over 10 million references to how to save money travelling but sadly the quality of those suggestions is rather disappointing.  So to help the next generation of backpacking adventurers navigate the rough, uncharted waters of travelling on a shoestring, I’ve assembled my own list of travel tips.

5. Visit poor, backward countries.  By travelling to backward, Third World countries instead of more well known and socially advanced nations like the United States of America and the Democratic People’s Republic of Korea, the clever backpacker can make their dollars or euros go much further.  A few months of minimum wage labour in a mind numbing McJob can see you living like a veritable Mahuraja, Sayyid or Khan as long as you don’t mind the occasional bout of Bombai Belly or enjoying a pint of fermented yak’s mild at the local.  Importantly, their government’s failure to adjust to globalisation means not only significantly increased purchasing power but also the means to bribe underpaid officials should you fall foul of the law.

4. Pickup instead of paying for a hostel.  Accommodation is the largest single expense item on any traveller’s account.  While the reasons for travel are many and varied - experiencing different cultures, seeing exotic new places, learning about oneself - meeting new people is always a key motivator and we all know this is nothing more than a thinly veiled euphemism for getting drunk with fellow travellers and having sex with strangers.  So back your Casanova abilities and don’t bother booking accommodation.  Any if it gets to 3am and things are looking grim - relax as there is always someone more desperate than you if you lower your standards a little.

3. Lead desperate guys on for free drinks. Nights out can become very expensive once taxis, cover charges, alcohol, and the early morning hotdog binge on the way home have been factored in.  The way to maximize the time spent partying while minimizing the impact on your hip pocket is to simply ask other people to buy you a drink.  Sure, there maybe some expectation of you putting out at the end of the night in return for a steady stream of beverages but lets face it, nobody knows you in this part of the world and you were going to end up with some random guy or girl so you might as well get something extra out of it.  This is what economists call rent seeking behaviour - extracting a payment in exchange for use of an asset - and is a bedrock principle of our capitalist society.

2. Get your flight ’sponsored’ by a drug dealer.  If you should ever find yourself stuck on the streets of Phnom Phen or back alleys of Kabul with empty pockets and maxed out credit cards, fear not as all is not as dark as it seems.  Despite the European Union’s reluctance to include agriculture in the Doha round of the WTO’s negotiations on free trade and the reduction of tariffs, the global trade in herbs and fine white powder products is a shining example of how individuals can make globalisation work while our governments fumble.  In these cities as well as any major urban centre across the world, there are large networks of merchants who will happily pay for your airfare home and even provide you with a few thousand dollars travel allowance merely for assisting them take a sample of their wares past overzealous customs staff.

1. Sell a spare body part.  South East Asia and the Sub Continent have a thriving trade in live body parts.  Rich westerners suffering from self inflicted lifestyle diseases ready to accept a transplant from dubious sources and ever increasing hospital waiting lists in the First World have seen demand for medial tourism skyrocket.  A kidney sold to some shonky trafficker of human parts in the back alleys of Mumbai or Ghungzao now has a market rate of up to USD$25000 which is more than enough to travel around the world for a year or two.  Try a bit of disintermediation by cutting out the middle man by selling direct to some desperate friend of the family or get really entrepreneurial and engage in a some organ arbitrage by buying them cheaply in the Third World and selling them in the First World and you could be set for years.
* Note that a traveller should never sell their own liver as this organ’s function is critical to backpacking and is generally too worn to be on sold to third parties.

So, 5 tips from the real world to help make your backpacking dollar go further.  You could of course try a more sensible way of finding hostel discounts but that wouldn’t be nearly as exiting.  If you happen to have any suggestions of your own, feel free to share the love with your fellow traveller.

To celabrate the new year, we’ve redesigned bakpaker.com a bit based user feedback and are very taken with our shiny new logo.  We hope you are too.