May
2
Tourism authorities all over the UK are all pretty chuffed with their predictions for a bumper year in 2009.
I’m not sure that they should be all that chuffed. Some of them are pretty poor and if the hotel industry in particular has a good year it has less to do with the efforts of tourism authorities and more to do with fate – or at least the combined delinquencies of our fatally flawed financial industry tripping hand in hand with inept government.
UK tourism is likely to be good until the end of the autumn. Tourism quangos will crow about the results and then the fun will stop. Come winter 2009/10 it is going to hurt and hurt a lot.
Anyway, now I’ve got that off my chest, let’s talk about who will feel the pain and who will feel – at worst - slightly queasy.
I’m not sure that they should be all that chuffed. Some of them are pretty poor and if the hotel industry in particular has a good year it has less to do with the efforts of tourism authorities and more to do with fate – or at least the combined delinquencies of our fatally flawed financial industry tripping hand in hand with inept government.
UK tourism is likely to be good until the end of the autumn. Tourism quangos will crow about the results and then the fun will stop. Come winter 2009/10 it is going to hurt and hurt a lot.
Anyway, now I’ve got that off my chest, let’s talk about who will feel the pain and who will feel – at worst - slightly queasy.
The watchword for this year is going to be value.
If you deliver strong value and communicate that value to your customers, you are likely to sail through this period relatively unscathed and in a strong position to perform well when conditions get better.
If you batten down the hatches: Cut staffing and marketing budgets to the bone; cut down your food cost; promote your rooms at full rate for no result and then engage in panic rate cutting when your hotel isn’t filling… well, you’re less likely to make it through this unscathed.
You see, none of the activities described in the paragraph above are related to offering strong value.
Cutting your marketing budget means fewer and fewer people will learn about your business and what you can do for them.
Cutting your staffing and raw material costs might well be approved by your accountant or your bank manager, but will do nothing for your product quality. Quality is a key ingredient of value.
Promoting your rooms at full price for advance bookings, then dropping that price as the periods of low occupancy become obvious is plain lunacy. (It’s also the wrong way round, have you never booked an airline ticket before?)
Combining these tactics is lethal. Cut your price, cut your quality, cut your throat.
Travel journalists are suggesting that people will be “trading down” this year: They will holiday not overseas but in the UK; they will book 3 star hotels instead of 4 star hotels.
I think that’s wrong. They don’t want to trade down, they’re looking for the right experience. They don’t want to stay in places because they’re cheaper. They want to stay in places where they will get the right experience at the right price. Of course they want to spend less, but they don’t want there to be a linear negative relationship between what they spend and what they get.
Four star hotels can only lose business if they charge unreasonable prices and fail to deliver the right value. Three star hotels can only gain that business if they offer more in terms of service. You can’t cut your way out of this and expect to make it through unharmed.
There is an opportunity to introduce the British holiday experience to a whole new set of customers.
There is an opportunity to keep and build on your market share and wallet share by choosing to ride out this period by offering strong, competitive value. Find out what people want, find out what they’re prepared to pay for it and then work out how you can afford to provide it, before trying to reach out to existing and new customers with your offers.
A little time and money invested right now might save you a lot of pain in a few months time.
It’s not too late.
If you deliver strong value and communicate that value to your customers, you are likely to sail through this period relatively unscathed and in a strong position to perform well when conditions get better.
If you batten down the hatches: Cut staffing and marketing budgets to the bone; cut down your food cost; promote your rooms at full rate for no result and then engage in panic rate cutting when your hotel isn’t filling… well, you’re less likely to make it through this unscathed.
You see, none of the activities described in the paragraph above are related to offering strong value.
Cutting your marketing budget means fewer and fewer people will learn about your business and what you can do for them.
Cutting your staffing and raw material costs might well be approved by your accountant or your bank manager, but will do nothing for your product quality. Quality is a key ingredient of value.
Promoting your rooms at full price for advance bookings, then dropping that price as the periods of low occupancy become obvious is plain lunacy. (It’s also the wrong way round, have you never booked an airline ticket before?)
Combining these tactics is lethal. Cut your price, cut your quality, cut your throat.
Travel journalists are suggesting that people will be “trading down” this year: They will holiday not overseas but in the UK; they will book 3 star hotels instead of 4 star hotels.
I think that’s wrong. They don’t want to trade down, they’re looking for the right experience. They don’t want to stay in places because they’re cheaper. They want to stay in places where they will get the right experience at the right price. Of course they want to spend less, but they don’t want there to be a linear negative relationship between what they spend and what they get.
Four star hotels can only lose business if they charge unreasonable prices and fail to deliver the right value. Three star hotels can only gain that business if they offer more in terms of service. You can’t cut your way out of this and expect to make it through unharmed.
There is an opportunity to introduce the British holiday experience to a whole new set of customers.
There is an opportunity to keep and build on your market share and wallet share by choosing to ride out this period by offering strong, competitive value. Find out what people want, find out what they’re prepared to pay for it and then work out how you can afford to provide it, before trying to reach out to existing and new customers with your offers.
A little time and money invested right now might save you a lot of pain in a few months time.
It’s not too late.
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