Nate Silver’s book, “On the Edge: The Art of Risking Everything,” has sparked a shift in perspective when it comes to evaluating risk and reward in the travel industry. Silver’s background as both a political seer and a professional poker player has equipped him with unique insights into the world of probabilities and outcomes.
Silver’s book delves into the world of gambling strategies and their parallels with Silicon Valley ventures. He explores the common traits shared by poker players and venture capitalists, highlighting the concept of being a “contrarian” as a significant overlap. Both groups are depicted as denizens of “the River,” symbolizing risk-takers in contrast to the risk-averse individuals residing in “the Village.”
Within the travel industry, individuals ranging from independent contractors to cruise line CEOs embrace risks as a means to expand their businesses. As the level of investment grows, so does the associated risk based on expected value. Travel advisors encounter clients with varying risk appetites, leading to a spectrum of preferences when it comes to booking vacations.
Distinctions are drawn between Riverian travelers, who are accustomed to taking substantial risks in their business endeavors, and Villagers who prefer predictability and familiarity in their leisure pursuits. While some venture capitalists opt for luxury and comfort during vacations to mitigate risks, Silver argues that being risk-averse could diminish the expected value of a vacation experience for both brands and travelers.
Silver’s argument challenges the notion that consistency and predictability are paramount in the travel industry. He highlights the success of brands like NoMad, Graduate, and Bunkhouse, which started as single properties and evolved into sought-after destinations. Investing in unique and distinctive properties can yield greater expected value compared to loyalty-driven bookings.
Basak Tan, CEO of Kremm hospitality consultancy, underscores the changing landscape of the hotel industry characterized by increased competition, innovation, and consumer expectations. Tan advocates for a shift in mindset among developers towards creating authentic, meaningful experiences that cater to both guests and the community at large. Emphasizing the potential of assets beyond traditional financial metrics is crucial in redefining the value proposition in hospitality.
In light of these insights, travel advisors are encouraged to identify clients with a propensity for risk-taking, referred to as Travel Riverians. By understanding their preferences and willingness to explore unique and unconventional travel experiences, advisors can tailor recommendations that align with their appetite for adventure and novelty.