Tourism in Great Britain is a £127bn industry. 2017 saw us spend 369m nights in British accommodation, with 6.6m trips taken over the Easter weekend alone. The upward trend in staycations reflects not only the number of trips and nights but a 2.6% increase in spending too.
Overnight accommodation was one of the first industries to find a decades-old model disrupted by technology as prospective customers took to the internet to book their own combination of getting there, lodging, activities and dining – and this division continues to eat heavily into profits. After a period of decline and consolidation in the 1990s and 2000s, Britain’s top two-holiday park and resort companies now offer nearly 100 locations between them. Research from a major chartered survey firm shows the parks industry reported turnover up nearly 10% last year.
“The increased convenience and value for money of holidaying in the UK are driving a rise in the number of staycations.” (Destination UK, Barclays, 2017)
Resort properties can find themselves working harder to attract new business. With no ownership model, they lack entrenched repeat visit opportunities; their guests demand greater entertainment (including expensive licensed characters) and dining options to at least match what is found on their local high street.
Away from the on-site franchised fast-food outlets and the captive audiences of the occasional `80s music weekends, how does a British holiday resort promote itself? Answer; like any other business, with discounts and new customer offers.
Breaking even takes centre stage
Our research finds one of the most popular offers is via the restaurant. We found a well-known brand regularly promotes one dining plan that when pre-booked (before the start of the holiday) is ‘20% cheaper’ – priced at £26.95 per day for Adults. Included in the price are a buffet breakfast and four-course dinner. We wanted to investigate if the restaurant could use Caternet software to track any profit on this deal.
We know that breakfast is sold to walk-ins at £8.45. To honour the pre-booking discount we took off 20%, so estimate breakfast is sold to this group at £6.75. We still have £20.20 allocated for dinner. We used procurement software to price up the ingredients of four courses from the brand’s general evening meal menu;
- Soup – £0.71/serving
- Bangers and Mash – £2.41/serving
- Apple Crumble – £1.11/serving
- Ice Cream ‘factory’ – £0.30/serving
With an ingredients cost of £4.53, this would produce a surplus of £15.67 before any drinks, overheads, and VAT. It would be possible to raise a profit, even at the dining plan’s discounted price. The recent and much-publicised inflation in the food ingredients market may, however, explain how the same deal will be sold at £27.75 next year.
Restaurant marketing more than a short break
With the margins we’ve highlighted, how can procurement technology ensure the holiday park’s upscale restaurant continues to turn a profit on these dishes, whilst keeping the dining plan offer attractive?
For Catering operations, designing a menu using Caternet’s Recipes module will ensure a live priced, portion costed and margin-controlled operation with recipes easily deployed to approved buying lists for site kitchens. Our easy to understand traffic light system enables Chefs and Kitchen Managers to see the high and low prices of comparable products on the day, leaving them free to negotiate what’s best for your operation vs their centralised budget.
With a unified procurement platform, Marketing departments can gain access to profitability reporting (down to item level) to monitor the success of campaigns across their estate. Integrating EPoS data with Caternet will give the holiday park’s strategy team a factual record of additional revenue generated through the promotion. With large premises, taxes and staffing costs, British resorts are fighting for every ancillary pound available. Customer choices in the high mark-up areas of branded soft drinks and alcohol matched with Finance teams accurately measuring stock consumption can ensure the offer and its price point won’t boil over.
James Waldron is Content Manager at Zupa