Sébastien Michel and his business partner Carole Zink are ramping up their tourism business. They also find that things are now very different from the pre-Covid era.
By Editor Glenn Baker
Imagine you own an inbound travel business making over $4.5 million in sales a year, when suddenly New Zealand’s borders close overnight, indefinitely.
Such was the nightmare experienced by Sébastien Michel, based in Auckland, and his business partner Carole Zink on March 19, 2020.
Covid had put an end to Frogs-in-NZ, the business they had developed from a travel blog that Sébastien had created in 2001.
To appreciate the gravity of the situation they found themselves in, you must first examine why the now-renowned Frogs were traveling so successfully before the Covid disaster.
The journey to becoming a profitable business was rapid, Sébastien recalls, with growth initially fueled by the production of travel literature in French for visiting tourists. This led to the publication of guides with the help of French-speaking residents living in New Zealand, and then advice on routes.
“While we have sold around 25,000 copies of our guides over time, the travel agency has become by far our biggest source of income,” explains Sébastien. “The business matured in 2008 when we employed ten people.”
The 2011 Rugby World Cup saw a spike in travel bookings, after which sales fell for a time. But that didn’t concern Sébastien and Carole. They aspired to remain a small business, but with high profit margins.
“We could have gone to Australia or elsewhere, but we didn’t want to go back and forth and neglect our families,” recalls Sébastien. “That’s why, like the Kiwis, we developed Frogs under the mantra ‘small is beautiful’.
“Before Covid, by travel industry standards, we were very profitable.”
Before Covid, some 75,000 French-speaking visitors came to New Zealand each year.
This tap well closed in March 2020, Sébastien and Carole thought that they would only have to go through a few months of disruption. Government wage subsidies would preserve their cash reserves.
Unfortunately, this plan was not viable.
“Carole was adamant: we had to lay off staff, reimburse clients as quickly as possible and leave our rented office in Ponsonby,” explains Sébastien. “She was right. So we did all of that in 2020 and by September we had even laid off.
Their cash reserves and some government grants allowed them to maintain their assets, such as the website, blogs, CRM, booking software, phones, and computers.
“We were lucky not to have major capital investments such as large buildings or fleets,” explains Sébastien. “Despite the government’s call to ‘pivot’ the business, we have decided not to. All of our content is in French and we saw no opportunity for us in the local market.
Everyone moved on to other jobs. Managing events and handyman roles for Sebastien, managing communications and sales for Carole, as their staff dispersed everywhere – in real estate, website sales, photography and baking businesses .
All travel customers on their books in March 2020 have been refunded or kept in credit for future trips to New Zealand – whenever that might happen.
“It worked well. We had very few problems and managed to keep our reputation intact,” says Sébastien. “While it has been devastating to see all of our hard work disappear, we have by no means been the hardest hit in the travel industry.”
He says they’ve been amazed to continue to receive travel requests from across the French-speaking world despite the pandemic, and by early 2022 they had already logged some 400 requests.
Back to the future
Today, Frogs has resumed operations. It is now a home-based business with no plans to return to commercial premises.
“We are trying to enter into a more collaborative working style,” explains Sébastien. “This is where key personnel will be able to take shares in the business and be free to organize their schedules as they see fit around our common goals. We have not developed a comprehensive business plan, but we plan to stay very nimble.
“This pandemic has taught us that we need to be flexible and always ready for change.”
In 2022, New Zealand has become an even more attractive destination for foreign tourists, he believes. However, with higher prices, he predicts fewer tourists, although they will spend more. And while he has yet to see the backpackers return, they should slowly increase their numbers.
“It’s still early days, but we’re getting more inquiries from people in French territories closer to New Zealand, rather than France and Europe.”
Sébastien is torn about the future of the travel industry in New Zealand. Rental car fleets and bed and breakfasts have been depleted. People are more aware of the carbon footprint of long-distance travel. All of this will have an impact and ambitions may need to be curbed.
“Only time will tell,” he says.
Looking back, Sébastien and Carole have learned a lot about business. The most important thing is to always follow your passions – the things that keep you up at night.
“Even if those interests or passions don’t seem like they could be a business, keep pushing,” he says, “until you succeed.
“During my Frogs adventure, it seemed like the stars were aligning. Because at all those pivotal moments, those existential moments, a solution would always appear. I really felt like I was on the right path,” says Sébastien.
It also helps that New Zealand is the best country in the world to try things out without the hassle of lots of paperwork and taxes, he adds. “And the Kiwis are amazing when it comes to trusting newcomers with good ideas.”