Proactive planning for the new normal

By Emily Kay 1 month ago

Effective budgeting is challenging at the best of times, but to establish an accurate financial blueprint for 2021, whilst managing the seismic twists and turns that covid-19 is bringing, makes planning for the new year a particularly difficult process.

There are many facets of revenue opportunity to consider, and venues within the European Tour Destinations network are approaching 2021 with an understandable degree of caution, but with a high degree of focus.

Business outlooks are ever-changing. In August there was a degree of optimism that venues would see a quick bounce-back after national lockdowns, but in recent weeks this optimism has become tempered by travel restrictions and the onset of prolonged economic downturn.

Ian Knox, Head of European Tour Destinations

The rise of the ‘staycation’

The downturn in air travel and the potential need to isolate after returning from an international holiday has laid the foundations for a growth in the ‘staycation’.

This scenario is a contributing factor as to why venues across the ETD network are currently focusing their efforts closer to home, in what is being called the new ‘drive’ markets.

Domestic sales and marketing efforts have resulted in significant boosts in business across our network. This has often emanated from new customers who are keen to escape densely populated areas to enjoy the health and wellbeing opportunities that golf and outdoor life presents.

For resorts with a real estate component, sales enquiries also continue to be strong. I have even seen recent evidence of wealthy individuals making seven-figure property investments off-plan having never visited a resort, in a bid to secure a safe haven away from city life.

Your marketing budget is crucial

Smart businesses are maintaining marketing budgets in their plans for next year.

Whilst they have often been the traditional go-to area for cost-cutting when times get tough, never will a marketing budget be so important as it will be 2021.

As a guide I would recommend marketing spend make up at least 3-4% of turnover. At the very least.

And with well-delivered campaign planning and product messaging, particularly around the development of customer channels in the new ‘drive’ local markets, this will be money well-invested.

Venues need to go to market with a commercial message that is completely relevant to potential customers, it needs to resonate with them, and it needs to be laser-focused in its delivery.

If 2020 has taught us anything, it is that we as businesses cannot continue doing what we have always done, and expect results to stay the same.

From a wider budgeting perspective, many venues are aiming to create realistic targets for 2021, understanding Q1 and Q2 may well be very difficult, but building greater momentum towards the second half of the year that can carry into a more stable performance in 2022.

Finding the correct balance with cost management

Tough times require equally tough decisions, but the worst thing any venue can do right now is to cut too much cost from an operating budget, that subsequently impacts on the visitor experience.

Whilst it is important to strike a prudent balance across every area of a budget– golf course maintenance and operations, food and beverage delivery and wider lifestyle elements – it is also important to consider potential negative impacts.

Members or residents, those most loyal to your brand, will immediately notice inferior service levels or golf course conditioning. Venues may be putting a huge element of risk in their business if any cuts go too deep.

The same is true for those still visiting resorts. Across the ETD network, venues continuously improve their service levels year-on-year, guided by our mystery shopper program, and next year will be no different. A balanced cost management program, though required, should always keep the customer and customer journey in mind.

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