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Working with seasonal ebbs and flows are essential if you want to succeed in the tourism sector. Austin Hickey of BDO explains what firms can do to get into their groove during the busy summer season.
While the concerns of a slowdown in visitor numbers, drop in sales, and associated falls in revenue and income are the most common issues and challenges affecting tourism businesses during the off-season, equally as challenging can be the issues associated with high levels of demand during the traditional peak or high season.
The outlook for Ireland’s tourism sector is bright for summer 2016 and this is reflected in the high levels of optimism and positive sentiment amongst the operators of tourism businesses throughout Ireland.
Through our ongoing work with Failte Ireland and daily interactions with tourism operators and businesses throughout Ireland, we expect 2016 to be a bumper year for the tourism industry, further evidence of what are clear signs of a sustained recovery across Ireland’s tourism sector.
With many operators now facing into this very busy and prosperous summer season, operators need to ensure they are well prepared for the inevitable seasonal influx. The following are six key points to remember upon entering peak season that will aid you in maximising revenues over the coming months and prepare you to manage anticipated growth.
Show caution when it comes to overbooking — Some tourism providers, particularly across the accommodation sector, deliberately overbook their rooms in anticipation of some cancellations or no shows. However, overbooking means that you run the risk of a double booking, which can prove costly and can create a negative experience for the guest.
As an alternative to overbooking, organisations should examine their cancellation policies and make amends to ensure they don’t operate at a loss. As an example, most hotel and visitor management booking systems will allow you to process credit card payments securely at the time of booking.
Not only do you get paid directly to your bank account at the time of booking, but having these details on hand will allow you to charge your cancellation and amendment fees if your guest changes their booking or backs out.
Assume nothing – While all indicators are positive and pointing to a buoyant and prosperous 2016, it is vital that businesses don’t rest on their laurels and expect visitors to arrive at their door unprompted.
At this time, businesses should be engaging with both repeat and potential new guests through special offers, email marketing and social media to let them know what plans or new offerings they have for the coming season. Any upgrades or enhancements a business has made during the off season should also be communicated to attract visitors.
Don’t compromise on customer service – As visitor numbers rise and labour capacity is stretched, the potential for inefficient, or below standard, customer service can arise within a business. In order to avoid this potential dip in customer service, businesses must ensure they have enough staff in place to avoid lengthy queues or long waiting times for customers.
At this stage, businesses preparing for their peak time of year should be finalising seasonal staffing plans and ensuring stock levels are correct. This preparation is vital to avoid missing out on valuable revenue-generating opportunities due to the unavailability of staff or inventory.
Implement an effective visitor management strategy – With many tourism attractions showing year-on-year growth in visitor numbers, and record levels in some cases, an effective visitor management strategy can go some way to ensuing a more constant and manageable flow of visitors to your business. Simple and effective strategies can include extending opening hours, or adjusting prices at different times of the day to affect demand.
Survey the competition – Businesses must keep a close eye on competition to ensure their prices are in line with market rates and are competitive. However, just as important as ensuring that rates and prices are not too expensive, organisations must avoid underselling rooms, products or visitor attractions.
Prices need to be set at the correct level to not only attract business, but to also ensure potential profits are maximised at this busy time.
Stash the cash – It is vital that a business build up a reserve when the cash flow is good. Setting some money aside will help tide an organisation over during the peak months when customer footfall slows down.
Austin Hickey is a Senior Manager in BDO’s Consulting Department. He specialises in providing operational and financial advice to a range of clients throughout Ireland’s tourism, hospitality and leisure sectors