With consumer confidence at a major low, retail spending down, and inflation now at 7%, what steps can travel and leisure companies take to weather the current "economic gloom"? Chris Thompson, Director at Firebird, offers his guidance to help businesses handle the challenges.
"There is light amid the gloom for travel and leisure brands"
Follow the figures, and the nation’s current economic status is alarming news for many British businesses. Last month, Deloitte’s Consumer Tracker found that net UK consumer confidence in the first quarter of 2022 had seen its sharpest fall since the first lockdown in early 2020. At the same time, levels of confidence in disposable income had their sharpest quarter-on-quarter fall since Deloitte’s tracker began in 2011. In other words, high numbers of households are suffering from rising cost pressures, and have become less likely to spend on non-essential goods and services.
Look closer, however, and there is light amid the gloom for travel and leisure brands. As Deloitte’s report puts it: “higher income households [are fuelling] overall discretionary spending, such as on holidays and eating out.” It’s an important point for the industry to note: there are still households happy to spend money, and, as we continue to emerge from the era of COVID-19, travel and leisure remain a priority focus for many consumers.
So how can companies use this period to preserve stability, maximise turnover, and retain their customer base? I’ve broken the subject down in to four areas of focus – each featuring prompts and questions to help guide businesses through these challenging times.
"Keep up the energy with clients, and keep the positive messages flowing"
Business priorities
Managing costs and protecting cash will no doubt be disciplines you’ve developed well during the past two years. Another key discipline is maintaining strong links with customers. Too many brands have failed to keep those client conversations going throughout this period. Don’t fall into that trap: keep the energy up and the positive messages flowing.
If your business’s income is slowing, ask yourself:
What can you do to stretch out your cash, and make it last longer?
Do you have quality information to draw on, whether that be KPIs or financial projections?
Has your company gone into hibernation away from its customers? If so, what steps are you going to take to reverse this?
With all of these points, communication is crucial. The wider and more open your conversations – with your clients, your team, your suppliers – the more options and solutions will arise.
"Are you clear on what is really making - or costing - you money?"
Products and services
As the economy moves through the turbulence, now is the time to take stock of the market, and ensure your business has a clear and coherent offering. Consider:
Is all of your product consistent with your brand projection and marketing?
Are you clear on your margins, and what is really making – or costing – you money?
How can you proactively work with your team to create the most inspiring and compelling offering?
Those customers who are still confident about spending during this period are likely to have fairly high expectations. By ensuring that your product and services live up to those expectations, you’re more likely to see those customers return, and to keep ahead of other competing services.
"Consider how best to continually engage with, and delight, your customers"
Marketing
Many brands have cut back on their marketing expenditure during this time, and focused purely on short-term performance, actively promoting deals alone. This is a mistake. Instead, I strongly recommend that you:
Don’t stop thinking about your longer-term brand values
Consider how best to continually engage with, and delight, your customers
Use your abilities as a travel brand to generate excitement
Many people with money want relief from the gloom at this time. They want to feel better, by investing in experiences that engage them – and your company can offer those experiences. As you work to strengthen your brand with ongoing publicity and promotions, don’t lose sight of how markets have shifted over the past two years; as a result, companies cannot blindly repeat what worked for them in 2019. Your customers’ wants, needs and preferences may well have changed during that period, and for good. Stay focused and stay up-to-date.
"The pace of change will not slow down, so do all you can to match it"
Innovation
Lastly, keep innovating – innovation being a pillar of business that’s arguably needed now more than ever before. Most companies have made a lot of changes over the past two years, and though it’s natural to want to back off and find added stability post-lockdown, doing so isn’t an option. The pace of change will not slow down, so do all you can to match it.
The Firebird partners are experts on helping businesses weather hard times, not only supporting companies to survive, but fully thrive. Learn more about our services and experience by getting in touch at www.firebirdpartnership.com
Chris Thompson is a Director of the Firebird Partnership, with almost 20 years’ experience of leading and growing businesses in the travel and tech sectors. His focus is on creating strategy, building teams, and devising processes that are both efficient and value-building.
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