Hard Times at Lonely Planet (slight return)

Another report about the recent layoffs at Lonely Planet.

Melbourne-based guidebook behemoth Lonely Planet will announce the sacking of 50 staff tonight -- around 10% of its global workforce -- as the global economic downturn continues to gut the tourism industry and guidebook sales.

Staff at Lonely Planet’s Footscray office were informed of the layoffs this morning with management calling a meeting this afternoon to discuss the changes and tap shoulders. A formal announcement is due at 9pm tonight to tie in with owner BBC Worldwide's London-centric media strategy.

A spokesman for Acting CEO Stephen Palmer confirmed the cuts to Crikey this morning and said they will impact all areas of the business. Affected staff were still in the process of being informed that they were out of a job when Crikey called.

In an emailed statement, Palmer said the situation was a "difficult" one but that the company had no choice in the context of the economic downturn.

"I recognise that this is a terribly difficult time, particularly for those whose jobs will be made redundant. I would like to reiterate that I would not have taken this action if there was any way I could have avoided it."

Palmer said the cuts were spread across the Lonely Planet's US, UK and Australian offices and did not comment on the specific divisions affected. But sources have told Crikey that the entire online content production division has been dismantled with extra cuts to be made in support roles. The book production section is said to be immune while images staff and commissioning editors appear to have also escaped the axe.

The cuts were foreshadowed on Monday when BBC Trust chairman Sir Michael Lyons gave a speech in Cardiff indicating BBC Worldwide’s operations will be scaled back to focus on its core commercial business of repackaging the Beeb's archive for DVD sales. UK MPs have savaged the company for the $250 million Lonely Planet purchase, claiming it has no links to its core business. The BBC is also under pressure from the UK government to use its licence fees to bail out Channel 4. BBC Worldwide made 112 million pounds last year.

Louise Connor of the Media Entertainment and Arts Alliance said she wasn't surprised at the decision in the context of the global tourism meltdown.

"It’s sad to see decisions made in England affecting so many jobs in Australia," she added.

Lonely Planet staff tell of a sense of foreboding that has gripped the Footscray office over the past few months. Palmer has regularly used company-wide meetings to give frank assessments about revenue problems and website cost blowouts. Sources say that once the new website was completed, the heat was on middle management to justify ongoing staffing levels.

In October 2007, original owners Tony and Maureen Wheeler sold Lonely Planet to BBC Worldwide for around $250 million. The Wheelers retained a 25% stake and are still swimming in the proceeds of the deal, reportedly mulling plans to spend $12 million on a lavish production of Wagner’s Ring Cycle.

The latest lay-offs mirror a move taken by the Wheelers in 2004 when 40 staff were sacked and those remaining told to forgo a 3% pay rise in the midst of the SARS outbreak.

It is not known whether the 120 staff at Lonely Planet’s Oakland and London offices have been informed of the sackings

Crikey

Hard Times at Lonely Planet

The worldwide economic collapse has hit almost everyone, including publishers of travel guidebooks, as shown by this recent announcement from Lonely Planet. Actually, I'm surprised that they only cut 10% of their labor force, but I do expect more retreachment as the year progresses. I've also heard that Avalon Travel Publishing and Moon Publications are in deep shit, cancelling several of their planned Europe guides, and getting lousy reviews at Amazon on some of their replacement guides to SE Asia. They saved some money with lower royalty rates, but cut off their noses.

Lonely Planet tells staff to pack their bags
Chris Zappone
February 25, 2009 - 2:53PM

Travel guide book publisher Lonely Planet has cut up to 50 positions as the demand for guidebooks shrivels in the face of global financial crisis.The cuts will affect staff in Australia, the US and Britain where most of the company's sales and offices are.

Before the cuts the company said it had 500 people on its payroll.The retrenchments are "directly related to the economic downturn because we're a global company,'' spokesman Adam Bennett said."It represents the decline of the guidebook market in tough times.'' Mr Bennett said the US and Britain, both of which are struggling with recession, represented a combined total of 60% of guide book sales.Lonely Planet, which is 75%-owned by the BBC's commercial enterprise BBC Worldwide, said it was consulting with employees, some of whom were not having their contracts renewed, while others were having their positions eliminated.

Acting chief exectuve Stephen Palmer said in a statement that the global market for travel was not expected to pick up soon."Even the most optimistic forecasts do not predict any sustained recovery until 2010 at the earliest, and even then it is likely to be slow and patchy,'' Mr Palmer said."The US, UK and Europe are all in recession, and these territories account for over 80% of our business.''Mr Palmer cited a UN World Travel Organisation forecast for total outbound travel to dip 2% this year.

But he predicted Lonely Planet's core markets would erode further with a 10% fall in the US, 5% in Britain and 2% in Australia."It has become clear that this economic situation is unprecedented, it will not just be a blip and we need to adjust our costs so we can manage through these tough times.''czappone@fairfax.com.au

On Lonely Planet and the BBC

Another interesting argument against the merger of Lonely Planet and the BBC, with some even more interesting comments on the issue.

I've blogged quite recently about the new Lonely Planet travel magazine which I think is an unfair competitor to Wanderlust (an excellent independent travel magazine which I write for quite a bit).

Why is this unfair? Because LP is now majority-owned by the BBC.

Following on from the new LP Travel magazine (which is written almost 100% by BBC writers and presenters) here's another example of how that playing field just isn't level anymore. Any brand would kill for a tie-up with the BBC on the BBC's homepage. The value in brand terms is huge. And this will translate to more hits for the LP website, more ad revenue and more book sales for LP.

You can't blame LP for wanting to make the most of the fact that its now owned by the BBC (or to be more accurate the commerical arm of the Beeb - BBC Worldwide) and with the clout of one of the world's most influential and wealthy media brands behind it the future for LP looks rosy.

I hadn't thought too much when the deal was announced about the impact on the LP brand of being owned by the BBC, but selling out to a big corporation says heaps about a brand and its future. I can see that Tony Wheeler (LP's founder) quite possibly felt that selling to a cultural corporation like the BBC rather than to a full-on multi-national commercial publisher was a good compromise... and smart too - moving the brand on from being a traditional paper and print publisher to a forward looking media organisation.

But I think it's all wrong. He'd have been better off selling to a fully commercial publisher (or media organisation) rather than one that's subsidised by the UK taxpayer. (Non UK readers - every tax payer in the UK pays an annual TV licence that costs around £130). Whilst some would argue that BBC Worldwide is a separate entity, the reality is that you can't work out where the taxpayer funded elements of the BBC start and where the commerically funded ones take over. And the benefits of association with the BBC brand are - whilst difficult to measure - most probably huge

I'm worried that LP is going to turn into some awful travel publishing megabrand that's everywhere. (take Jamie bleedin Oliver - lovely guy but do we REALLY need a Jamie magazine? For heaven's sake!) Watch this space for LP branded TV shows, LP branded clothes and gear, LP branded areas in tour operators and a plethora or LP branded websites, blog hosting services ane more... not to mention LP guide content being sold to third party tour operators, airlines and so on to use as destination content on their websites

Jeremy Head's Travel Blather