Inspiring hospitality to thrive

Industry Focus: Chris Scargill, Larking Gowen

Travelling through our region, visitors can easily feel spoilt for choice; stunning countryside, historic cities and towns, appealing visitor attractions and warm hospitality offered through an endless array of quality pubs, hotels and restaurants.

Tourism in the East of England is worth more than £10bn annually and directly employs over 240,000 people*. According to the latest projections, the sector can expect double-digit growth in the next five years, generating thousands more jobs. Hospitality businesses of all sizes represent a cornerstone of this growth.

There was an assumption that a successful sector like this could be left to get on with doing a good job. But while support flowed during the COVID-19 pandemic, there are ongoing challenges. These are referred to by some as the Four Horsemen of the Apocalypse: austerity, Brexit, COVID-19 and now the cost of living crisis, with fuel costs adding an extra element of jeopardy.

As well as rising inflation and staff shortages pushing up wages, the cost of living presents a further squeeze on everyone’s pockets. While the accommodation category looks set to remain strong, enticing customers to spend while out and about presents more of a challenge.

The pandemic re-educated the consumer and changed behaviour patterns, breaking the habitual trend of going out. As a result, spending on leisure took a hit. Consumers have been leaving it till later to book and spend per person has dropped. Even though footfall remains strong among some destinations, consumers’ willingness to part with their money remains a challenge.

Significant investment has gone into making our region an all-year-round destination, making it less weather dependent, but the damp summer will not have helped businesses relying on the boost of the extra spend that school holidays traditionally bring.

A vested interest

As a regional accountancy and advisory firm with a team specialising in tourism, Larking Gowen has a vested interest in making sure the sector is thriving, not just to help our clients, but for the region as a whole.

As part of helping businesses with key data, we launched our Tourism Survey in 2006. The survey was halted by the Covid pandemic in 2020 but restarted this year. As well as providing key benchmarking data and testing the temperature of the sector, we also provide stories of inspiration and ideas; stories that will cut across all businesses in the sector, who are looking to nurture companies and help them grow.

A recent review of these stories shows their continued relevance, with topics including managing TripAdvisor; why sustainability is important; key elements for staff development and retention; and the importance of collaboration.

We worked with Norfolk and Suffolk Tourist attractions and UK farm attractions at the beginning of the pandemic in 2020, undertaking a sector survey with them. The results showed how much chaos would be caused by a lack of government support. At that stage, while furlough was in place, the choice was binary; you either had to have staff on furlough or not – there was no flexibility.

The survey which can be viewed at tourismsurveys.co.uk highlighted three things: the desperate need for a VAT reduction to stimulate activity; the need for furlough to be flexible to enable staff to stay on the payroll and remain engaged (even if working fewer hours); and extension of the loan schemes’ repayment periods to avoid killing cashflow at a time when businesses were recovering. It was pleasing to see that all these elements were taken on board.

Today, this three-pronged support has enabled businesses in the sector to not only survive the pandemic, but to allow them to keep going during the cost of living crisis.

Key challenges for tourism businesses

Your team is what makes the difference

You can have the best business model in the world, but it’s the team that makes the experience.

In a sector that suffers from high turnover, make sure you invest in your team and that they understand the importance of their role, and offer them career development. Does your team understand your business and embrace its vision? Every team member is important. It’s the person on reception or in the car park who makes the first impression, with five-star reviews often mentioning a staff member.

A shining example of good practice is coffee specialist, Paddy & Scott’s, where nurturing and motivation involves providing staff with the right tools to do their jobs and encouraging a strong sense of being part of a shared mission that changes lives.

CEO Jonathan Reed explains: “The social impact we make as a business is really important to us. I’d like to think our people want to come to work because they see their roles as life changing. The coffee that we sell has transformed lives in Kenya, Brazil and other coffee growing regions, which allows our team to become a little more emotionally connected to what we’re doing. They know that their efforts aren’t just filling the back pockets of shareholders. They are coming to work and making a real difference to real people’s lives, which is really strong.”

Paddy & Scott’s job advertisements are traditionally headlined: ‘Life is short, work somewhere awesome’.

Thanks to its reputation and culture, the firm finds itself overwhelmed with applicants and follows some basic guiding principles for keeping hold of its staff: a peer-led approach to recruitment; taking on the right people from the start; great leadership; and open communication.

The company also has a strong track record in encouraging ambitious team members to move on and set up on their own.

“We have helped eight of our employees in the last five years set up in their own business, which we’re insanely proud of,” says Jonathan. “This is what fuelling ambition is all about. If people want to do their own thing, we are here to help them do that.”

Planning

Successful businesses take time to plan and requires sub-plans for the implementation of each element which should include footfall, margins and ratios. A SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) can be very useful. Plans should be constantly revisited, retuned and measured. Look at activity, but also focus on the structure of the business, nurturing it through the changes, making sure you are tax efficient, that the business works for you, and that you are getting a return on your investment. Seek expert advice for all elements of your planning.

Your customers

Know and understand your market and have a good idea of who you want your customer to be. Monitor TripAdvisor and other sites to see what people are saying about you; they can be an invaluable source of knowledge. Make sure your product focus is on the right customers for you. Conduct your own market research and look at the competition. Watching trends and being ready to flex is important too.

Customer experience

Don’t forget that what you’re selling today needs to be all about the experience; from key first impressions to delivery of the product. Sometimes it’s the small details that make the biggest impression.

Marketing

Once you know your customer base you should be able to market correctly. Some age groups are not avid social media followers, so beware of targeting them the wrong way. Use digital channels and remember the power of great photography, capturing real moments with real people. Reply to reviews, and not just the good ones. Use social media such as LinkedIn to find great ideas.

Technology

Businesses should all look to embrace technology, whether this is your till system or your accounting system. So much simplification is available, giving you more time to focus on delivering great experiences. Think carefully before you go cashless, make sure this is appropriate to your customer base, such as older people or children with pocket money. 

Take a step back

Be willing to step back and look independently at your business. Using a critical eye, look at what can be improved and where beneficial economies can be made. Positive challenges will help your business grow.

Larking Gowen’s Tourism Business Chat is a lively ongoing discussion packed with advice and thought leadership, where people in the industry share their stories and business tips. Follow this link larking-gowen.co.uk/tourism-insights to find out more about this and Chris Scargill’s podcast.

Whilst every effort is made to ensure accuracy, the information contained in this article may not be comprehensive and recipients should not act upon it without seeking professional advice. ©Larking Gowen

*www.visiteastofengland.com