The cost-of-living crisis: An insight from a General Manager of an independent, rural hotel.

What is your insight on the current cost-of-living crisis from the point of view of a General Manager of an independent, rural hotel?

There is so much uncertainty for customers and their disposable income currently due to such prolific rising costs. This is extremely worrying for them and only stands to destabilise many businesses medium- and long-term viability at an already precarious time. As a rural and independent hotel, the damage will typically be felt disproportionately to most too.

Hospitality, in particular Hotels, are often the first to go into recession and the last to come out of it. It’s the first thing people think about cutting back on and the last thing they can re-afford. For most people, the behavioural shift goes toward cooking in or takeaways rather than eating out, and smaller breaks or no breaks rather than lavish aspirational-living type holidays. Consumers migrate away from where they would normally spend their money or not go out at all. Many businesses will see their turnover impacted, their profitability shrinking, and their long terms prospects of viability will look less confident.

It’s important to remember that we are also going through this as much as our consumers are. When we look at the cost-of-living crisis to the business… imagine our heating bills! Fuelling a building that was built nearly 200 years ago is a big ask. Costs like this are likely to impact any remaining profit for a business like ours, for years to come.

We are being hit from two sides being a rural hotel; as a destination venue there are not many people around us, and as an independent hotel, we don’t have a broad base of sister properties to spread out the ever-increasing costs. As a hotel with a finite income, our cost base is going up quicker than we can recover through increasing any revenue or streamlining services.

It is a common misconception that hotels can afford to get through the crisis as we are “a big hotel” - ultimately this leads to many guests starting to haggle on prices and take price increases as profiteering. No one is going to escape this - we need to work together to turn threats into opportunities. This is a time for understanding we need to manage our consumers expectations - we will absorb as much of the extra costs as we can, it’s in our nature to innovate, but there must be a point where we pass costs onto the consumer, at the right price, of course.

What are you doing as an employer to help your staff during this cost-of-living crisis??

The wonderful thing is that we have done so much to support our personnel over many years, not just now at this incredibly tough time. We do it because we are a good operator and that’s what’s important to us - we need to stand out from the competition as an employer of choice and let’s face it, the competition could be anyone now, not just another hospitality business. It’s key to look at how we can incentivise and motivate staff to come and work for us by being attractive – that then gives us a great platform to retain them.

There are some immediate benefits such as a great wage; we were awarded a ‘Living Wage business’ at the beginning of 2022 and we are proud to offer high rates of pay at Balmer Lawn hotel. In the last 18 months there has been a growth in wages like never before and this is great as in the main this fed straight back into the economy. Paying higher salaries not only helps our employees with the cost-of-living crisis but encourages engagement of entry level jobs from people now viewing the industry as more professional, credible and rewarding.

Another great support is that we give our employees access to a staff reward scheme in house and locally. All employees get a ‘Go New Forest’ card, giving them discounts across the New Forest and wider area. This helps to support local businesses too, whether this could be a discount off coffee, a day trip out with kids, or an MOT, it’s a great way to encourage living local, buying local and supporting them throughout a higher cost of living situation, with potential drops in disposable income.

Business can also join national schemes like ‘Perk Box’ or ‘Hospitality Rewards.’ Giving employees discounts with businesses on a more national level. This could be for car insurance or named brands, in addition to giving them access to things like counselling, health and wellbeing sessions, some even have a money back bank card coming to market. These memberships, affiliations and rewards schemes are critical during this time and it’s great to see businesses working collaboratively in the name of hospitality and putting its staff first.

Alongside bonuses, great rates of pay and rewards for working with us, we’ve always focused on employee’s long-term employment opportunities and up-skilling. If they want to re-position themselves with further education, career progression and senior level salaries then they can whilst working here. We have an enviable record of supporting staff over many years to achieve their full potential.

Do you have a plan in place to encourage guests and visitors to Balmer Lawn during this time?

We give consumers as many options as possible during this time, so they can still enjoy what our hotel and the incredible New Forest has to offer, but at a cost that is right for them. We have different packages and price points which allows the consumer to understand what they’re getting for their money. We tailor these packages and adapt once we understand what people are prepared to spend – giving them an experience, but a cost-effective experience where we can. Options like can make a huge difference to the consumer.

Alongside sensible pricing we also have direct incentives for staying here. We allow guests to access the ‘Go New Forest’ card features so that they too can ‘live like a local’ and support those incredible small businesses locally. We have built strong relationships with some of the area’s most amazing attractions and guests can achieve 20% off online prices just by booking with us. Guests have also got access to free fast e-car charging!

These are all long standing incentives for booking with us and they are partly the reason why our brand is strong and returning guests are so frequent. Over the last 8 years I have been GM at Balmer Lawn it has been my goal to establish a powerful independent and family-owned business that puts the customer and employee at the heart of everything we do. These values have positioned us as strong as possible to cope with adversity in the trading landscape.

What is your best advice for other businesses in the industry?

Like us, businesses should be looking into their sustainability practices, both in terms of steering remaining profit into longer term sustainability and advising consumers on their credentials wherever possible. The practice of sustainability is no longer a buzz word but a necessity for a business’s bottom line and the fact this will be advising so many more consumers as to where they spend their money it shouldn’t be ignored.

Have a look at your current business model. Cut out wastage, look at how you can save without affecting the customer experience. We must make sure we are offering the right product at the right price, along with staffing in a good place with their welfare and pay, we should no longer accept exhausting the product or the employee. Go back to basics if you must and look at what you do well.

This isn’t about doom mongering or telling you things you already know. This is just what we have noticed, how it has affected us, and how we plan to help our staff and our business. The last few years have taught us that hospitality folk are amongst the most resilient, innovative, and collaborative in business. Let’s stick together as there is always a way to navigate the storm!