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The great British holiday – can hotels hold their own against caravans?

12 June 2009 by
The great British holiday – can hotels hold their own against caravans?

It could well be a bumper summer for Britain's tourist trade, with millions of people set to holiday in the UK, many of them for the first time. But how good will it be for hospitality - and will most people be heading for caravan and theme parks rather than major hotels? Tom Vaughan reports.

"You don't half make friends quickly on a caravan holiday," said comedian Ricky Gervais, "especially when the alternative is watching your nan go to the loo in a bucket."

Well, the only thing that early forecasts of domestic tourism 2009 can tell is that the whole nan-pee-bucket scenario is a likely prospect for thousands more Britons than ever before. Research by VisitBritain in December last year found that a whopping five million Brits are considering holidaying in Britain in 2009 rather than abroad, with as many as two million more taking caravan trips rather than seeking out hotel accommodation.

In the midst of the worst recession since Noddy Holder was a sex icon, and with the euro-sterling exchange rate meaning you need to cough up £5 for a bottle of Coke and a Kinder Bueno on the Continent, the great British public has decided to stay on these shores this summer. Combined with the favourable exchange rate for foreign tourists resident in the euro zone, does this mean we're on the cusp of a bumper year for the British tourist industry?

Firstly let's look at foreign tourism patterns. While the favourable exchange rate might make Britain appealing for foreigners, statistics from the year's first quarter suggest this isn't as fruitful as one might hope. The Incoming Passenger Survey found that, while from January to March the seasonally adjusted number of visits to the UK by overseas residents increased 2% to 7.5 million compared with the previous three months, spend by overseas residents on visits to the UK decreased by 3% to £4.1b. And the hope that the falling pound might tempt back American tourists, where UK visits have dropped 17% to 3.7 million from March 2008 to March 2009 compared to the previous 12 months, has hit a snag as the pound has risen above $1.60 for the first time since November last year.

While patterns can be read into the IPS statistics, predictions for how the summer months will fare are hard to make, as a lot depends on the infamously unpredictable British weather. David Trunkfield, director of PricewaterhouseCoopers LLP, says the rise of the pound against the dollar isn't too much of a cause for alarm.

"The euro-sterling exchange rate is far more pertinent to UK holidays than the dollar," he says. "While those still desperate for warmer climes and a change in culture are heading to medium-haul, non-euro zone destinations such as Turkey and Egypt, we can still expect to see crowded UK beaches this year."

But how crowded? And who will be the main beneficiaries? Media coverage has touted caravan parks and holiday camps as the sector set to see the biggest increases. Earlier this year the Caravan Club released figures showing that the caravan industry is 25% up on last year, with bookings at Haven holiday parks up 50%. And, for the first time since the boom of budget airlines in 1994 saw them become the preserve of European holidays only, Eurocamp has opened sites in the UK.

However, this doesn't account for the mooted figure of five million Britons. Estimates from the National Caravan Council say that an extra two million caravanning holidays will be taken this year, including trips from foreign tourists. It's not a figure to pour scorn on, but it doesn't account for all the extra domestic tourists this year.

OCCUPANCY DOWN

So where are they all? Hotel occupancy so far this year shows a dip of about 6%. However, according toPatricia Yates, director, strategy and insights at VisitBritain, the surge in caravan bookings compared with hotels is more symptomatic of the pricing structure of budget booking, rather than a major shift away from holidaying in hotels.

"Caravans and self-catering holidays are good value for money and people who want to budget their holiday book these early as they won't get any cheaper," she says.

And she's right. As availability has diminishedthis year at Haven holiday camps, prices have risen. Hotels, however, often get cheaper nearer the time as deals become available. "People after a deal on a mid- or upper-market break will leave it to the last minute to see what the weather is like and snap up offers," Yatessays.

It is these last-minute offers that could make or break a hotel's year, says PricewaterhouseCoopers director Stephen Broome. But it is a tough market. "For the majority of UK hotels not in great tourist locations it will be a hard summer because there's no corporate business and hotels will be fighting it out for the few customers looking for bargains."

A lot of what happens with UK tourism this summer will depend on the weather and with the Met Office predicting plenty of sun, there promises to be a lot of last-minute customers opting to stay in the UK. A survey commissioned by Travelodge found that the top four destinations for UK tourists were Cornwall, the Lake District, Yorkshire Dales and the Scottish Highlands and Islands respectively, with 24% opting for a break in the countryside. But it's not too late to poach some of those last-minute customers if you are not located in a tourist hotspot.

According to Yates, research by VisitBritain shows that domestic holiday-makers are looking for value-added deals as much as they are value for money. "People are hanging on to their holiday spend this year," she says. "They are not only looking for a good deal, they are looking for a sense of place and a sense of occasion."

Of course, the caravan - if you can bear eating and sleeping four feet from a chemical Portaloo - offers a low-price holiday in a beautiful or famous spot. Hotels near tourist spots should also be guaranteed customers. It is the remainder that need to market themselves for the last-minute crowd.

After looking into websites such as lastminute.com and laterooms.com, the first rule of thumb in appealing to this demographic, says hotel consultant Melvin Gold, is to tie in with the local area. "If you are holidaying in the UK it's about what you can do in the local area," he says. "This isn't a Spanish beach holiday where the pull is the sun and the pool."

Local attractions - research shows theme parks are doing well - scenery, walks, restaurants, will all show couples and families that every day of a break can be filled enjoyably.

WEB SAVVY

Ensure you have a strong web presence, says Hotel Marketing Association chairwoman Pamela Carvell. "The one resource hoteliers have that they didn't in previous recessions is the internet. Digital marketing, putting photos on Facebook, regular updates on your website or even videos on YouTube, are all great opportunities for hoteliers. Hoteliers have to have a presence as there are a lot of people out of work who will be researching their holiday as the internet is free."

And think about the market you are targeting and gear a value-added offer towards that. If you are aiming for married couples then consider allowing dogs into the hotel as it will save a kennel fee, Carvellsays, or if you are aiming for families with young children then offer a fun-pack on arrival, Goldsays.

And finally, be transparent with your prices, says Carvell. A great appeal of the caravan holiday is the ability to control budgets. The idea of paying up to £10 at a hotel for a children's breakfast, when they might just want a bowl of Coco Pops, can deter the hard-up holidaymaker. While some guests may want bed and breakfast or just bed prices as they look to explore the region's restaurants, others will want to pay in full and know exactly what their outgoings will be before they commit.

These arechallenging times, Yatessays, but those customers still sitting on the fence are fair game, and just a bit of creativity could poach them. "The challenge of tourism is the challenge of 200,000 small businesses," she says. "At times of pressure it's vital we work as an industry and market ourselves as one part of a region, not as an individual business. In good times you may be able to sit back and wait for them to come, but in bad times you need use everything at your disposal."

And, despite the possibility of a bumper year of tourists, no one should lose sight of the fact that these are still bad times. What happens over the next few months is partly out of the industry's hands, with the weather looking to make or break the summer's income. We all know from media coverage that it promises to be a bumper year for caravan parks, but the rest of the hospitality industry will have to hold its breath and look to the skies to see if this so-far-depressing year can be saved.

You can add value by looking after guests' pets in the style to which they have become accustomed


CARAVANNING BY NUMBERS

  • Caravanning is worth about £6b to the UK economy - £2b in holiday spend and £4b in sales of new and used product and accessories.
  • Caravan parks employ 90,000 people, including part-time and seasonal staff.
  • More than £1.75b was spent on UK caravan holidays in 2007.
  • Caravan holidays accounted for nearly 11.5 million trips in 2007, while the number of camping holidays approached five million.
  • The National Caravan Council estimates that if the increase in bookings continues, the number of caravan holidays taken in the UK could rise to more than 13.75 million for 2009.

HOW TO ENCOURAGE PEOPLE TO STAY AT YOUR HOTEL

  • Add value to the stay at your hotel: allow dogs so customers can save on kennel fees; offer a bottle of wine to couples; offer kids fun packs.
  • Tie in with the region: UK tourists now desire a sense of place. Work with and highlight all the local attractions, from walks to theme parks.
  • Be transparent with pricing: let prospective customers know prices for full and half-board. Consider including entrance fees to local attractions.
  • Be web savvy: lots of prospective customers will be researching hotels on the internet. Clever digital and social marketing - Facebook, Twitter, YouTube - will help win them over.
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