As the final easing of lockdown restrictions in England had arrived and evidence suggests tourism hotspots are likely to see unprecedented levels of trade over the coming months, with the appetite for staycations continuing to grow, businesses owners should seek to maximise the future potential from all this custom.
Richard Andrew, Head of Accounting at Armstrong Watson, says that following a turbulent year of closures and uncertainty in hospitality, there’s a risk business owners will become so busy with the day-to-day operations they might miss the opportunity to make the most of the revival in trade.
Here are five top tips for maximising recovery opportunities in the hospitality sector:
- Prices: We’re seeing significant inflation in hospitality prices as demand outstrips supply. Households have saved more than £50 billion during the pandemic and there is an appetite to experience life and spend money now. Be bold when reviewing your prices and consider your competition.
- VAT Savings: In contrast, VAT registered accommodation providers may wish to offer incentives for payments of deposits and full balances received before the VAT uplift in October as any monies received before then will only be liable to 5% VAT. The VAT is calculated according to when you receive the money rather than when the holiday happens, so it may be worth sharing some of the savings.
- Build contacts: For these reasons there is no better time to build up your customer database so that you can advertise to them in future and provide special deals for direct bookings. While it’s almost impossible to operate as an accommodation provider without relying on online travel agents such as Booking.com, reducing the reliance on these agents will increase future profits significantly.
- Monitor costs: Hospitality businesses took the opportunity through various lockdowns to reduce their overheads, seek cheaper deals and minimise costs – something they should not lose focus of as they get busier.
- Reward staff: Hold onto your staff and ensure you reward them correctly. If you’re trying to recruit then you will need to consider how you can provide flexibility in work patterns, recruit in nearby locations or offer rewards for new staff referrals. Ultimately, if the staff aren’t available you will be forced to restrict opening hours to your most profitable times of the day or week. This can yield some surprising results where profitability can actually improve above full opening hours. It all depends upon your business model.
For advice and support to ensure you make the most of the boost to trade over the coming months and maximise all the potential opportunities please contact Richard Andrew on 01539 942050 or email richard.andrew@armstrongwatson.co.uk
