Occupied with occupancy


While tourism occupancy rates are recovering after the “significant dip” in visitors to the south west during the recession, operators can still do more to maintain and improve the contribution that tourism makes to the local economy.

Tom Roach
Tom Roach

That’s the view of Truro-based chartered accountant and tourism specialist, Francis Clark.

In the south west, occupancy rates for July and August 2015 grew by 12% and 10% respectively since 2012 and these are consistent and sustained indicating a return to pre-recession patterns of spending.

Occupancy during August has now been at 85% of capacity over the last two summers compared to lows of below 78% in 2010 and 2011.

Year on year to the end of September 2015, occupancy is up 1.5% due in large part to comparing the early part of this year with the previous year’s storm affected performance.

However, the overall increase of 1.5% represents strong growth as it follows annual growth last year of 4%.

Tom Roach, tourism partner at Francis Clark in Truro, says occupancy rates are vital statistics enabling accommodation providers to plan.

He said: “Occupancy rates reveal where a business has capacity to improve in terms of bookings and turnover and can give an insight to market trends alongside the capture of other demographic data – so good record keeping is essential.

“They are affected by many factors including the weather, exchange rates, the price of fuel, the attraction of big events and even location based TV series. As you might expect, occupancy rates are squeezed in recessionary times when people have less money and are less likely to prioritise a vacation.”

Roach says there are a number of ways that operators can improve occupancy rates.

“Firstly, keep and use records,” he commented. “Get to know your typical visitor – Leisure or business? Families or couples? Old or young?  Are they looking for activities, a romantic break or themed weekend?  Where do they come from and how did they travel, all useful data in building a picture and deciding what you need to do to fill those unoccupied beds and create off-peak profit.

“It’s also good practice to re-examine your business and marketing plan on a regular basis and ask who your potential customers are. Do you need to adapt you product or your marketing to meet changing demand? Do you need to introduce niche products for targeted groups, have you got your pricing right?

“A good exercise is to undertake a break-even analysis to gain a clear picture of all financial commitments including all fixed and variable expenses.  Anything exceeding this is pure profit and can be used to introduce fresh marketing initiatives which by definition, can’t lose money. This is how 3 nights for 2, a free bottle of wine with your meal or an inclusive excursion is paid for.

“Above all, look at those records.  If people have visited before and you are doing your job right, you have a ready-made marketing database of potential customers at your disposal.

“It is important that any tourism business seeks focused and professional advice to analyse and look at ways they can improve occupancy levels and through the winter period it is important to spend time looking at this before the spring and summer season starts for 2016.”