Maximising your income in difficult times
We’ve all seen how bad the global economy is at the moment and unfortunately for us in the travel trade, it’s likely to be one of the sectors that’ll be hardest hit in the year to come.
Why’s that? Basically because holiday expenditure is what economists call “distretionary spending” ie people don’t have to go on holiday. When money is tight, then discretionary spending is the first area to take a hit.
Thus we can expect that people will be taking fewer holidays in the coming year and those that they do take will be cheaper eg shorter, to lower cost destinations or to cheaper properties. How hard it’ll hit you depends a lot on the profile of your property and how you market it but it’ll almost certainly hit you.
On the assumption that it will hit, what can you do about it? First off, forget about increasing prices in the coming year; if anything you should reduce them or at least add additional services at the same cost.
Secondly, you should attempt to diversify your income if possible. For example, if it’s possible to close your place for part of the year and work somewhere else, then look into that possibility. This option is dependant on the profile of your revenue throughout the year eg in our case, we get about 2/3rds of our annual income in July and August therefore it may be more profitable if we were to work somewere else for the remainder of the year.
Thirdly, you should aim to maximise the income from the guests that you do get. You can do this through offering additional chargeable services and encouraging them to make use of the existing chargeable services that you do offer. For example, a B&B can push their evening meals more, others can encourage the use of car rental and the like via their website.
Finally, look to minimise the expenses incurred in running your place. Don’t do this at the expense of quality though as that’ll only serve to damage the reputation of your business. For example, over the winter if you concentrate any guests in a limited number of rooms then you can reduce your heating costs considerably.
Popularity: 63% [?]
Incoming search terms:
Related posts:
- What sort of camera do you need to take the photos for your holiday property?
- A difficult year for everyone
- Getting money from repeat customers at your holiday property
- What about print advertising for your holiday property?
- Assumptions that holiday guests make