Hotels4U.com will cut its “overheads and wages” before reducing its marketing budget, according to sales and marketing director John Harding.
Harding was on a panel at WTM entitled ‘How To Market Travel and Tourism in a Recession’.
While Harding declined to say whether reducing wages equated to job cuts, he was more transparent on overheads. He revealed that the bedbank has saved £28,000 pa on its business rates by getting in a surveyor to look at its rateable value, Harding is also looking the squeeze costs by renegotiating mobile phone and technology costs.
“You have to keep the money for marketing,” he said. “In a recession, if you cut marketing you’re on to a loser. If you keep it the same, there is no incentive to build sales. But increasing it gives staff the challenge to increase sales.”
When asked about whether it was possible to avoid price-led marketing in a downturn, Harding said pricing can be part of the brand, referring to the businesses strapline, perfectly placed, perfectly priced.
“In the bedbank sector, if you are 1p more expensive then someone will buy from your competitor,” he said.
But price comparison sites, he argued, “are the death of innovative marketing” because they reduce everything to price. “Maybe someone should come up with a price comparison site that factors in added value,” he suggested.
Having said that, he went on to admit that the bulk of hotels4u.com’s B2C business came via travelsupermarket.com. “This isn’t going to change in a recession,” he added.