By Kristian Valk, chief executive and co-founder of Hotelchamp
The UK’s travel industry has a once-in-a-lifetime chance to make a killing this summer – and it is all thanks to Brexit. Just one year after the UK public voted to leave the European Union, and as the negotiations over the terms of the deal begin, the effects of Brexit are already being seen very clearly in this market sector.
While the political uncertainty caused by Brexit has caused the value of the pound to plummet, it’s meant that more UK holidaymakers are opting to take their holidays here, as the exchange rate makes foreign travel more expensive.
Data from Sojern shows that there has been a near 25% rise in Brits planning UK stays for summer 2017. On the flip side of this coin, the favourable exchange rate that overseas holidaymakers are enjoying means that they will flock to the UK in their droves – in fact, they’ve already been taking advantage since January, according to figures from VisitBritain.
While the European resorts that traditionally rely on a large number of Brits will be cursing their luck, hoteliers in this country will be licking their lips. Even those with only a rudimentary understanding of the supply-and-demand principle would be able to see that this is a golden chance for the UK’s travel industry to push its profits through the roof.
But in order to maximise the opportunity, hoteliers in the UK need to be on top of their game. A solid online strategy backed by insights based on data will see them reaping their rewards like never before.
So how can they take advantage of this perfect storm? Well, firstly they need to identify their most profitable sales channel and focus on it. In most cases, this will be their own website, as fees charged by the aggregators such as Hotels.com and Booking.com take a big chunk out of the profit margin.
In order to increase the number of bookings made directly, hoteliers need to act fast to get their website up to scratch. With the growing number of consumers who use their smartphones and tablets to research their trips, hotels must have a mobile optimised website. The overall layout needs to be clear, high-quality images need to be abundant, and the quality of the facilities and rooms should be emphasised as strongly as possible.
The hotels do need to accept, however, that a large number of visitors will arrive on their website through third party websites. This isn’t a problem – in fact it represents a massive opportunity for them if they can persuade the visitor not to return to the third party website to make the booking.
While rate parity laws prevent hotels offering lower prices on their own website compared to the OTAs, there are ways around this. Carousel images on the homepage of the site don’t need to simply show images of the hotel – they can be used to advertised special discounts for guest who make their booking direct too.
It’s also time for hotels to be thinking about how they use data to encourage previous guests to book again, and to build up profiles of new guests in order to target them again in the future with personalised deals.
Email marketing campaigns incentivised with discounts for direct bookings need to be approached carefully – hoteliers need to decide what the ideal sweet spot is in terms of the size of the discount in order to encourage the maximum number of bookings without eating into their margin. This can be achieved by data-driven experimentation – A/B testing different rates for different customers in order to see what works and what doesn’t.
Every effort needs to be made to capture as much data as possible from the booking and the stay in order to build detailed profiles that can be used as a basis for bespoke offers to that guest in the future. They need to think hard about what they can learn from the guest – where they come from, if they have children, what time of year they book their stay and so on – and the conclusions that they can draw from this data.
It’s important to remember that this may very well prove to be just a one-off opportunity – in the longer term, the UK’s economy and currency will stabilise so there may not be another chance to benefit to such an extent in the future.
But as well as using this as an opportunity to boost profits, hoteliers also need to make sure that 2017 is the year that they get their digital channels optimised and use big data to its fullest extent. By doing so, they will be future-proofing their business by maximising their chances of repeat business in the future.