Without tourism: what is Lozada doing to support his franchises

Tourism was one of the first sectors that felt the impact of the worldwide Covid-19 pandemic.

Before establishing mandatory quarantine policies in their own countries, the first decision of most States was to close the borders and prevent the entry of possibly infected citizens from other parts of the Earth.

That hit fully in one of the industries that mobilizes the most money worldwide and even more in Argentina, where it was a second great blow after the one it had received at the end of last year, when the Country Tax was approved, which increased 30 percent tourist packages in dollars.

“We are with zero billing, with the company closed and the only job we do from home is to reschedule the trips of those who had contracted packages between April and June. Also conducting training and ordering processes, waiting for some good news to come, such as a vaccine, “said Juan Cruz Lozada, president of Lozada Viajes.

The company from Córdoba has a network of 80 franchises distributed in 11 provinces of the country and logically this scenario has put many of these points of sale in check.

“We have had some proposals to cancel contracts, but we are accompanying all of them so that they can stay and wait these months for activity to gradually begin to reactivate,” Lozada acknowledged.

Strategies

The most serious problems facing franchisees are paying wages and rent.

To help them face this situation, from Lozada they prepared a “check list”That they are sent to the franchises with about twenty actions, procedures and adjustments that they can develop to reduce costs.

For example, trying an agreement with employees for a temporary drop in salary, renegotiating rents, managing a reduction of rates, for example, Internet or professional fees, or processing state aid.

For these purposes, the Central House of Lozada offers advice. In addition, from the first day the market was paralyzed, they decided to eliminate the collection of the “fee” that they receive from the franchisees for the use of the brand and the logistical and marketing support that this represents.

“We have to restructure our costs practically to the minimum to exceed these four or five months in which we are not going to have invoicing,” Lozada summarized.

According to the head of the Group, “no franchisee has yet downloaded” and to those who are not managing to get an agreement for the rents, they are suggesting that they return the premises, but that they keep the registration to work for home office.

On this point, Lozada slipped the possibility that in the future they may develop some form of “virtual” franchises.

“We are contemplating that a percentage of franchisees evaluate being able to change to some mode free lance, but legal; with all the formal conditions and demands that our business has, but without physical structure, “he added.

A hope

In this context, he said that although there is still a long way to go before activity begins to normalize, it is possible that this process will accelerate due to the fact that airlines and hotel companies are preparing aggressive offers to capture sales that help offset the red that will generate the global pandemic.

“The infrastructure is there: there are hotels that are completely empty monsters and in order for the operation to be profitable, the airlines have to fill the planes. That is why offers that are very tiring of the demand are expected,” he said.

An example is that international airlines operating from Córdoba, such as Latam and Copa Airlines, are already offering one-year tickets abroad, at super promotional rates (700 dollars to Europe, for example), with the possibility of changing up to three times the date without suffering penalties.