This isn’t the first time I’ve had to manage a company through a recession. The current economic downturn brings to mind the recession of 1991/92, when I was running Cresta Holidays.
Before and after the events of Black Wednesday in September 1992, the travel industry faced reduced consumer spending and high exchange rates caused by inflation, falling house prices and the devaluation of the pound due to our forced withdrawal from the Exchange Rate Mechanism.
However, the high interest rates at that time did mean that net savers at the top end of the market were still doing well. This time around, the recession appears to have no redeeming features but, with a bit of experience and perspective, I believe companies in the right frame of mind can continue to trade successfully and place themselves in a prime position to make the most of the first signs of an upturn.
Now, more than ever, businesses need inspirational leaders and positive staff. Take comfort from recent surveys suggesting customers will not forego their holidays, even if they book them later. Then sit down and plan what you can do to make sure you get (more than) your fair share of the market.
With declining sales we can’t afford to carry the same costs, so start saving. Relentlessly ask ‘why?’ and ‘how much?’. But don’t just scrap activity, look for different ways of doing it – be creative, work smarter. Remember pruning is done not to kill, but to encourage future growth.
The last thing you should cut is your marketing spend – some say you should spend more in a downturn. Supplement your budget by co-operating with partners to fund stronger, more frequent messages and new initiatives.
Everyone in the business should focus on sales and profitability. Cut out costly mistakes and sell up wherever you can. Listen to what your customers want and provide it.
Crucially, we should be looking to raise our levels of customer care. Let the customer sense the confidence and reassurance in your business.
Above all, be positive and enthusiastic, believe in yourselves and your colleagues and do something. Opportunities after any recession will be huge – and those companies who get through it will thrive – make sure you are there to enjoy it.
Need advice on managing your finances? Accountant Andrew Burnham has written a series of practicle articles for Travel Weekly...
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