Turning Scarcity Into Opportunity: A Case Study

Cashingin on FOMO
Two men drinking wine outside

When something is scarce people tend to want it even more. They call this the “scarcity principle,” or more colloquially “FOMO” (the fear of missing out). This behavior is well documented in both economics and social psychology. And because we humans just can’t help ourselves, wherever there is scarcity, there is also opportunity.

Steve Brush, an avid backpacker and freelance software developer, saw such an opportunity and seized it. Brush is the co-founder of NZHuts, a service for New Zealand's backpackers that thrives in an environment of scarcity. I interviewed Brush to learn more about his innovative travel brand.

Steve Brush
Steve Brush, Co-Founder of NZHuts.com

Tell us a little about NZ Huts: what do you do and where did the idea come from?

I have a passion for backpacking, I love the stillness and perspective that you get when you reach pastoral and less traveled scenes. ‘Our backyard’ has always been my personal  favorite place for backpacking, and it’s becoming increasingly more popular worldwide. The Great Walks (e.g. Milford, Routeburn, Abel Tasman) are leading New Zealand’s backpacking sphere in the number of visitors with almost 120,000 Great Walks booked by kiwis and international travelers in 2019.

To protect NZ's natural wonders, the Department of Conservation limits the number of people who can book multi-day trips and spend the night in the Great Walks. And the more popular the tracks get, the harder they are to book. This leads to two problems: on the one hand, people reserve accommodation prematurely and often cancel their reservations later, leaving many spots empty. On the other hand, there are thousands of people who were not able to book a track in time.

With the help of several more travelers/developers, I decided to solve this problem by creating NZHuts. NZHuts automatically scans for open huts and campsites in NZ’s Great Walks and notifies travelers when sold-out accommodations become available. When signing up, our travelers set the track, huts, dates, # of nights and travelers, and then they just wait until they get a notification from us regarding an availability. This saves people from manually refreshing the DOC website for weeks, making other plans or even canceling their trip altogether.

 

Screenshots depicting How NZHuts Works
NZHuts.com - Helping NZ travelers book their next Great Walk

What is it about New Zealand’s Great Walks that makes them so popular?

New Zealand’s tourism industry has always been built upon breathtaking landscapes, and experiencing these up close. The density of stunning vistas in the Great Walks is unlike anywhere else in the world. There is a sense of tranquility and peacefulness that is unique to these views.

Kepler Track, Fiordland National Park, New Zealand
Kepler Track, Fiordland National Park, New Zealand Credit: Jade Stephens

In addition to the natural beauties, the DOC does amazing work to preserve the scenery. The DOC efforts to preserve and restore nature by controlling visitors behavior and responding to natural hazards. In addition, it upholds high standards of the conditions of the huts, shelters and campsites it manages.

How far in advance do the huts sell out?

The time-to-sell-out varies between Great Walks. Some tracks like Heaphy and Abel Tasman do not get sold-out at all, while others, like Milford, get 97% full within 1 hour after booking opens. When Milford booking starts, around 2000 people are online trying to book their huts.

In general, the earlier you book, the greater your chances are to secure a spot. Since huts get booked quite fast, you have to be mindful when booking opens, especially if you are trying to book a hut for peak season (Jan-Mar). That’s why many people use NZHuts as a reminder service to receive a notification when booking starts.

How much do the huts cost to book?

The price of huts varies between Great Walks. Ranging between 24$ to 70$ and averaging around 45$ per adult per night during peak season. Children are usually free for kiwis, and international travelers pay a little extra for some of the huts.

And how much do people pay for your notification service?

NZHuts is a satisfaction guarantee service which means that if no huts became available during the time you were searching then you can get a full refund. You will only pay a 14$ fee if we manage to find a hut for you.

What marketing channels do you use to promote NZHuts and which have been most successful for you?

Our best channel is our satisfied travelers that recommend the service to their friends. Another important channel is our valued affiliates.

Even during COVID-19 demand for the huts remained high?

In ‘the old normal’, domestic travel accounted for over 60% of the reservations in Great Walks, and that alone was enough to fill up most of the huts. This year, kiwis accounted for over 95% of visitors, but with all the cancellations of international travelers, 2020 ended up being a pretty busy year for us, and our service was very valuable.

Wondering how you can put scarcity to work for your brand?