QUALITY IN TOURISM | WHEN AN INSPECTOR CALLS
When an inspector calls …
Diversification can be a lifeline for hospitality businesses , or just as easily a financial black hole . Deciding how and when to invest is the key to ensuring success . DEBORAH HEATHER , director of Quality in Tourism talks about diversification and taking the plunge for your business
There are two core approaches to diversifying your hospitality business ; the first is to expand on what you have already got , providing space and opportunity to attract different guests , and the second is to add something totally new , which supports your existing occupancy rates , increases RevPAR and potentially enables a price increase . The best approach will depend on the stability of your existing customer base , the space and scope you have for conversion , the experience you currently give your customers and how any diversification will dovetail with that , and also what you have a passion for , interest in and knowledge of .
Building on current successes There is a distinctive difference between expanding or upgrading your rooms to provide space for additional guests , and diversifying . Converting existing space into bedrooms , or upgrading the size and standard of existing rooms helps to increase occupancy and potentially raise your prices , but it won ’ t necessarily attract new markets . Diversification on the other hand has the specific aim of breaking into new markets , adding additional guests to your business , without undermining or alienating the existing clientele – unless you want to change them of course . By definition , diversification means expanding your range of products or services , or making your business more varied , but it doesn ’ t have to mean a fundamental change in your commercial direction . Without visiting a specific site , understanding any planning restrictions and reviewing any budget restrictions , it is difficult to make clear recommendations ; however opportunities for consideration are catered , or self-catered lodges ; glamping pods ; or cottages , using space and innovation to attract a new , selfsufficient audience . This approach is great for targeting longer , high-value lets , with limited additional skills required by your staff and is a great introduction to diversification and expanding the business .
Alternatively , it is worth looking at what services you can offer as part of your diversification . Weddings and particularly exclusive-use venues are big business at the moment , and could prove a lucrative opportunity to increase occupancy and add additional turnover . Similarly , midweek conferences can do the same thing , as can events such as school proms and parties . Of course , this depends on your specific premises , local target market and when you require business boosts , but all are worth consideration . They are closely enough aligned with your existing business model , but are a new focus for an hotelier ’ s passions .
Importantly , you need to look at your occupancy rates very closely , over the course of an average week , and over the course of a year . This will help you to identify weekly lulls and annual quiet periods , and help you to understand what type of diversification will boost your business the most , and at the most appropriate time .
Boosting existing occupancy Diversification can also be used to give a new lease of life to your hotel , reputation and occupancy , without actually increasing the number of rooms you have available . Diversifying your facilities can be an excellent way to add value , push up your prices , set you apart from the local competition , attract more local custom and even turn your business into a destination hotel .
For example , the addition of worldclass spa , gym facilities and therapy rooms can attract new day , evening , overnight and weekend guests , adding additional revenue to the business , and helping the hotel to break into new markets . Your approach can be small-scale , with the addition of enough facilities to improve existing guests ’ stays , or large-scale enough to attract spa guests in their own right . Both are of course a change from your current business model and will require additional staff , but are not so far
40 www . hotelowner . co . uk May 2017