“Need is the driver of all innovation, isn’t it?” says Jason Richards, CEO of Vietnam Backpacker Hostels, one of the biggest players in Vietnam’s backpacker tourism sector, and getting bigger yet after their foray into guided-tours.

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Backpacker on Buffalo Run Tour (Photo credit: Vietnam Backpacker Hostels)

In 2013, founders Michael Francis and Max Lambert launched the Buffalo Run, multi-day tours marketed to backpackers to help them actually get off the beaten path in Vietnam. Backpackers! Paying hundreds of dollars? For a week-long guided tour!? Seems more than atypical.

 

Backpackers are known for being adventurous, unplanned, novelty-seekers who abhor all things pre-packaged and expensive. But, in reality, backpackers usually end up on the most typical of routes, eating and drinking at the nearest cheap-looking place and often paying hiked prices.

“People were just getting on a bus from Hanoi to Hoi An and there’s all this cool shit to do in between,” Richards explains.

Authenticity is a deceptive standard, especially for tourists who, by nature, don’t really know the new country they find themselves in. But in the end, authenticity is a big selling point, and that’s what Vietnam Backpacker Hostels has tapped into.

“People were just getting on a bus from Hanoi to Hoi An and there’s all this cool shit to do in between,” Richards explains.

So the co-founders – both originally backpackers themselves – developed a seven-day tour from Hanoi to Hoi An that would fit the ethos and adventurous itinerary of backpacker generations. “To go to Phong Nha, I mean, who goes there? And now there’s sleeper buses running through there. In the last two years we’ve really seen those routes develop,” says Richards.

(Video credit: Vietnam Backpacker Hostels)

Despite the tough crowd of customers, they have made inroads into this largely unchartered backpacker territory in Vietnam. Their tour sales have grown 100% year-on-year, added several destination specific tours up north, and will launch a new 16-day Hanoi to Ho Chi Minh tour this January.

At first, Richards says, “It was really hard to get them to pay into the trip.” Most of their customers’ instinct is to either convince themselves they could do it easily on their own, or to go for the cheapest tour, not realizing the huge difference another 50 dollars could make.

“The hard part is communicating the value for that money,” Richards explains, but after eight years in the industry, “We built the product with the confidence we have from our own experience, and we think we know our market really well.”

So when it came to marketing, the team decided to use what they knew about their tourist segment.

(Photo credit: Vietnam Backpacker Hostels)

First, Richards says there’s a major disconnect between what backpackers say their daily budget is, and what they actually spend. Part of their in-person sales out of their hostels is basically calling them out on this, saying, “Hey, be realistic…”

Second is what Richards calls the ‘Backpacker Post.’ Backpackers are very word-of-mouth oriented, they value their fellow backpackers’ opinions despite, says Richards, how very wrong they can be. When deciding where to sleep, eat, drink, and especially where to pay for tours, backpackers will listen to each other and then do extensive online research.

“Backpackers are extremely wary consumers. If they feel like they are being sold to they will be defensive straight away. We just try to make our trips really awesome, so that social media takes its natural course,” says Richards.

“Backpackers are extremely wary consumers. If they feel like they are being sold to they will be defensive straight away.We just try to make our trips really awesome, so that social media takes its natural course,” says Richards.

So, besides the novelty of selling US$345 tours to some of the most penny-pinching tourists to some of the least touristy spots, the Buffalo Run was marketed in ways many domestic tourism companies might think lazy or not-aggressive enough.

Take a trip around the Hanoi Old Quarter and it’s quickly apparent that most local shops and travel agents think they must promote, promote, promote their SALE! SALE! SALE! That kind of marketing strategy might work in the short-run, but it isn’t sustainable. Running a sale everyday of the year both defeats the concept of a sale and drags down quality in the rest of the market.

“A huge issue in Vietnam, and huge issue for us, is that most local operators seem to be involved in one big great race to the bottom. The price-orientated traveler, they see the cheap trip versus the expensive one, they only look at the itinerary, and then it’s difficult to justify that extra value,” says Richards.

(Photo credit: Vietnam Backpacker Hostels)

The Buffalo Run therefore stays above the fray, not selling on price point and just working very hard to refine a quality product that gets social-media savvy backpackers to spread the word. It seems to be working.

“In-country competitors are really just emerging. They have started up with their own multi-day tours headed south. They are joining that race to the bottom,” he says, “but they are really only competing with each other.”

The best innovations are indeed driven by need, but the best innovators know how to make that need last and grow.

This content is also available in: Vietnamese