How to Adapt your Strategy and Tactics to Navigate Government Restrictions

This article follows the insightful discussion from a webinar hosted by SuperControl for PASC UK and ASSC on 13th October.

Guest speakers, industry veteran Richard Vaughton and Phil Beattie, MD of Luxury Coastal brought huge value through their experience in the sector.

Impact of rules on our sector

Changing restrictions are leading to many cancellations but there are still opportunities out there.

The very high wave of bookings when lockdown ended carried many operators through to September’s tightening of restrictions. It feels like we’ve crashed down to be receiving cancellations and slow uptake now, following three months of optimal booking rates and occupancy.

We need to maintain perspective. Realistically, October-December is a time of year when booking pace is traditionally lower. SuperControl’s booking data shows that at today’s date – 13 October – the forward booking picture has settled to roughly equivalent occupancy levels to previous years.

Cancellations through to December are inevitable.

Bookings are still coming in, especially ‘last-minute’ bookings so there is hope.

FACT: We don’t know when restrictions will be lifted

It’s a fact of our reality that we don’t know when restrictions will be lifted. The Government has indicated that they may last for 6 months. The virus is by no means under control.

The panellists shared the view that it makes no sense to second guess when this will end. Instead concentrate on what you can influence and control.

Phil Beattie at Luxury Coastal advocates that tactically it makes sense to have a continually rolling short-term approach for the next few weeks. Focusing on engaging with guests that may be affected and doing our best to protect the areas in which we operate. Inevitably there are difficult conversations with guests and owners relating to cancellations. We then need to be as effective as we can at rebooking those holidays.

Fiona at ASSC adds that as individual operators we can continue to do what we do best. Keep our guests safe, keep providing exceptional holiday experiences, keep our communication channels with past and booked guests strong and regular.

Adapting to Market Conditions

With a large property it is extremely difficult to plan ahead. Where practical, switching from eg a sleeps 20 mindset to a sleeps 6 mindset will at least enable some revenue to flow through the ‘repackaging’ of properties.

Embracing shorter stays is important as there is clear demand. To do this in a commercially viable way it’s essential to know your cost per day of operation and your changeover day costs. Consumer perceptions of value vary greatly. Someone looking for a 1-2 night stay is not likely to be motivated by a minimum 3-night stay. But only they can know how they perceive value so it is worth specifically offering a 1-2 night stay even if it has to be at a 3-night price to be profitable. Be willing to experiment through this period. The OTAs can be a useful experimentation platform.

Take heart from the fact that, apart from groups of adults, the profile of guests we would normally be attracting to self-catering properties October-December is in tune with the markets that can travel under current Government restrictions. Namely pre-schooler families, single households, couples, pet owners. We may need to be more flexible than usual but the demand is there. There is a good chance that cancellations may be rebooked.

Top tip from Fiona: Be ready. Have your property Covid-cleaned, ready for an arrival at any moment. One of the big adjustments required of us is increased flexibility.

Social media is a major driver here. Logs, dogs, colourful wellies, property personality can all shine on social platforms. Consider also how you can build trust in the booking process, such as through flexible cancellation terms.

Guests expect flexible cancellation terms

With inflexible cancellation policies hitting the headlines, and the CMA intervening, it seems likely that non-refundable deposits will be a thing of the past. As a result, consumers have high expectations of full refunds and even credit for a future stay is less acceptable. With guests’ ability to plan being highly disrupted, they are proceeding with caution when making bookings. They require a satisfactory answer to “What happens if I need to cancel…?”.

Being able to reassure guests that they can get a full refund if they are unable to stay due to Government restrictions makes your property more bookable. The expectation of flexible cancellation terms is likely to be here to stay. Flexibility is a marketing tool; a way for you to stand out in your local market.

The need for flexibility is not limited to cancellation terms

Richard Vaughton considers that Covid has accelerated the pull of market forces relating to flexibility. The sector will have to acknowledge change – cancellation protection, damage protection, acceptance of bookings with just 1-2 day lead-time are becoming mainstream provisions by savvy operators.

Pricing is hard but hold your nerve

When supply outstrips demand, like it does October to December, it plays a bigger part in guests’ decision making. But it is a more resilient strategy to focus on creating value rather than providing discounts and special offers, which are relatively devaluing. What does the guest really want? Create “temptation, traction and trust” (lovely acronym from Richard Vaughton) through great photography, amenities, local knowledge, good processes, flexibility and accreditations. Many holidays were sold far too cheaply following lockdown, when pent-up demand would have allowed for a higher price to be charged. We can learn from this; when restrictions are lifted the advice is to be optimistic on pricing.

Fiona Campbell is experimenting with dynamic pricing through Beyond Pricing and says that for her it strongly relates to property improvement. As she attracts bookings at much higher prices she is reinvesting the margin to meet a possible increase in expectations. It is compelling that her business is improving as a result. At Robert and Melinda’s properties, Orroland, their experience is that higher prices don’t directly correlate with increased expectations. While a programme of property improvements is being delivered, their observation is that their holidays are simply appealing to an audience with a different perception of value for money.

Alistair Handyside’s “Three Ps”: Pricing, Partners, Photographs

Alistair Handyside, Chair of PASC UK, highlighted that our sector offers astonishing value for money. We can do more in our marketing to promote that value by emphasising the price per person per night. This can lead to an in-the-moment comparison that any guest can understand. That is, you can’t even get a space in a youth hostel for ┬ú30/night. Alistair advocates that by expressing our value more effectively we can attain a higher price.

You need the right partners in place to get bookings; whether that’s membership groups, platforms, agency/ies, your own website. And you need excellent photographs to earn bookings at all, let alone at higher prices. “When you get pricing, partners and photographs perfectly aligned your calendar will look fantastic to the guest.”

Plan ahead

Phil Beattie recommends an optimistic pricelist for 2021, pointing out that once dates are sold that’s it. They’re a finite resource so spend them wisely so you don’t have to reflect, “I wish I had done …”. He suggests planning ahead to keep an open mindset and responsiveness. For example, “If this [date is reached] or [thing happens] …, then we’ll do [that]”. At Luxury Coastal they have a number of break points planned. For example, “By [this point], if we put the prices up to [this amount] and we’re unhappy with the level of bookings we’ve got we can try to pull it back a bit from there.” His advice is to be optimistic because he believes that, as we saw after lockdown, domestic demand will be high when restrictions are lifted.

The role of technology

There is no doubt that these winter months provide an opportunity to work on improving your business and processes practically and incrementally. Technology is fundamental to success and reducing friction for the guest. Data, distribution, reach, dynamic pricing, cancellation protection, damage waiver – Richard Vaughton strongly recommends we all get these in place. And the camera is technology too and really must be used to best effect. Richard closed by emphasising the importance of thinking like a guest, not an owner a lot of the time.

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Professional Association of Self-Caterers (PASC UK)

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