Alasdair Swan, Senior Commercial Manager for England, Wales, & Scotland, Cumberland Building Society.

The hospitality industry has navigated numerous challenges in recent years as it worked tirelessly to recover from the pandemic. But for all the pressures brought about by Covid-19, many in the industry showed a robustness to meet them head on with an unabating perseverance in what was unprecedented circumstances.

While many in the sector successfully steadied the ship, there are still choppy waters to overcome moving into 2023 and beyond. Cost of living, environmental consciousness, staffing challenges, increased regulation, and the energy crisis with rising bills all remain significant obstacles. In fact, in a report recently published by Cumbria Tourism, 95% of tourism businesses in Cumbria are concerned about rising energy costs and 88% concerned about rising costs in general. These concerns are not unwarranted, as 61% of businesses have reported a decline in bookings for the year ahead and will likely be anticipating a squeeze on their profitability as a result.

If the hospitality industry is to rise to the challenge of the aforementioned issues, it must be aware of a constantly changing landscape, and harbour the adaptability to be able to deliver on the trends which matter most to their customers front and centre of its operations to ensure success in the year ahead.

For those looking to do so, the Cumberland Building Society, armed with 20 years’ experience in long-term lending to the hospitality sector, is on hand to help with its relationship managed approach, offering support and insights to those businesses who drive the sector forward.

There is a growing onus being placed on the value of experiences rather than possessions. Indeed a report from Retail Connections found that after the pandemic 58 percent of people felt they had missed the experience of being ‘out’. With people looking to cherish every moment, there is a new climate emerging of doing rather than having. After all memories last longer than material things, and as such the hospitality industry is uniquely placed to offer consumers experiences which they will remember for the rest of their lives.

Insights from Mintel have uncovered that it is millennials who will be more inclined to dig deep in 2023 in order to experience the joy of a break away. They’re not only more likely to book trips within the UK to create new memories, but they’re also 22% more likely than any other demographic to spend more to make their trip extra special. Typically, it is the 45+ age bracket that are targeted for upsells and luxury add-ons, but it may be worth considering shifting tact.

Additionally, packages that include additional services such as spa access, entertainment or activities will have a significant advantage as people look for greater value from their purchases. Helping people to get more for their money by promoting discounts and early-bird offers is a simple way to keep attracting those opting to stay in the UK this summer.

Data has also uncovered that there’s quids in the quirks. One in five domestic holidaymakers aged 16-34 highlight unique accommodation as one of the most important factors when choosing a holiday destination in the UK. By investing in developing your offering to something that offers more unusual and unique experiences, your business will appeal more to a younger demographic which is willing to spend.

Brand proposition in 2023 is key to ensuring that a business remains relevant and in touch with its customer base. Qualtrics spoke to over one thousand people, researching what it takes to win their loyalty as a consumer in 2023, and the wide response was to ‘be more human’. When consumers are forced to make tough decisions about where to spend their money, it’s the businesses that they have the greatest connection with which will win their loyalty.

In recent years the hospitality industry has proactively risen to the challenges which have caused turmoil in the market, but there is still work to do. It is those in the industry who place what matters most to people at the heart of what they do who will thrive going forward. But doing this can be easier said and done, and that is why The Cumberland is here to provide signposting to the relevant professional services with friendly and strategic advice whenever needed.

At The Cumberland, our ambition is to support all our customers through these turbulent times. With our relationship-first approach to banking, we truly understand our customers and take the time to nurture those relationships so that we can provide support for them during any situation, whether it be good or bad, as well as providing them with the latest industry insights which will help them connect with their customers.

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Alasdair Swan is Senior Commercial Manager at The Cumberland. Based in Carlisle, and established in 1850, The Cumberland is the UK’s 10th largest building society. Serving 160,000 customers, The Cumberland offers a range of hospitality lending solutions, specialising in hotels, guest houses, B&Bs, and holiday lets (including Airbnb).