Storm Doris may well have battered the U.K. last week, but it seems more heavy headwinds are imminent in the hotel sector, according to accountancy firm Moore Stephens.
The UK firm claimed earlier this week that there was at least a 30% chance that some 1,800 UK hotel companies could fold within the next three years.Unpredictable weather patterns lie ahead for UK #hotels Click To Tweet
While the drop in value of the pound has made the U.K. more attractive to some markets, Moore Stephens cited the fact that Britons on “staycations” are likely to focus on tourism hot spots, leading to a downturn in less popular destinations. Other factors Moore Stephens reported could have financial implications for hotels include:
- Increase in F&B costs as exchange rates push up import prices
- Introduction of a living wage
- Increase in the popularity of hotel alternatives such as Airbnb
- Uncertainty and lack of confidence in the UK economy
But how many of these 1,800 hotels could remain in business if they adopted a comprehensive revenue and marketing strategy? Here’s three ways in which U.K. hotels could positively impact their bottom line and avoid the receivers.
- Open Pricing – Many smaller hotels in the U.K. are reliant on seasonal trade. Therefore, maximizing on boon times is vital to survival. Operating an Open Pricing policy that enables a hotel to fluctuate its prices per room, per day, according to market demands and guest profiles, will enable a property to maximize on revenue in peak season, while driving occupancy in low demand periods.
Open Pricing gives hotels the flexibility to never say No to a customer. It enables a property to set rates that are unique to room types, channels and dates, and operate these prices independently of each other.
- Distribution – Understanding and using the most effective distribution channels is also vital for smaller hotels. A 10-bedroom property in Brighton cannot compete with the online power of an online travel agent such as Booking.com, but nor can they easily afford to pay up to 30% in commission for each OTA-sourced booking. Omni channel marketing, and investment in a property.com presence, could make all the difference. The mindset needs to change from being prepared to pay a 30% booking commission, to investing that money in advance to grow alternative channels to drive direct bookings.
- Advocacy marketing – The most effective marketing is through word of mouth. Hotels need to actively engage with their guests pre, during and post-stay. Find out what they want and need, deliver what they want and need, and then ask them to tell their friends, family or the whole wide world about their stay via social media. Turn one guest into four or more guests through advocacy marketing.
Storm Doris may well have passed, but unpredictable weather patterns definitely lie ahead. Hotels that get strategic with their revenue and marketing strategies will be better equipped to weather the storm.
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