“Holiday park operators now find themselves dealing with various new conditions. With that, it is easy to forget that standard operating procedures should be the benchmark to work towards. Many businesses have not had the time, the money, or the staff to effectively train their colleagues. This applies to both the importance of following these procedures and the vital role these procedures play in the success of a business.”
– Andrea McCarthy, Operations Director, Venners
A summer in review
Holiday park operators around the UK have managed to get through another season. The industry has benefitted from an increase in staycations, and has balanced supplier issues as well as recruitment challenges.
So how did the year go? Whatever the answer, the main thing is that operators have survived!
But have they reviewed exactly how well they did this year? Would they go as far as to say that they have not only survived, but that they have also thrived? It is likely that many operators have managed to bring in a good amount of revenue this season, but after inspecting the balance sheet, things might not be looking quite as rosy.
What tends to happen is that customer service receives a great deal of attention, but this is not offset against other key operating targets like optimising margins and yields on sales.
This is a real shame, as the loss in profit from a year of little to no trading could hugely benefit from this bumper season of holidays and the Euros. There is still time to make up for some of that loss.
Managing the end of the season effectively can make the world of difference. It is so easy to throw away gains by not closing down properly and it would be a waste to lose a hard summer’s work in the winter due to lax operating procedures. Here are some helpful tips that can help holiday park operators end the season with as much profit in their pockets as possible.
1. Shutting down with as little stock as possible
With the expected higher uptake of holidays in September and October, many might be inclined to keep a surplus of stock available just in case. Our advice would be to do the complete opposite. Instead, holiday park operators should embrace and work towards a ‘just in time’ policy for stock, keeping stock levels minimal. In September and October they should be looking at their par levels, making sure that their ordering is tight and adjusting their orders according to the varying volume of sales at all times.
2. Paying closer attention to stock movement
To shut down with as little stock as possible, one has to know exactly what stock they actually still have available. That means completing internal stocktakes on a weekly basis and reminding staff of their duties to record everything.
Have products been sold? These sales should be recorded accurately through the till systems.
Is stock moved from one place to another? This should be recorded via transfer books.
Have products been spilled or wasted? This should be recorded on wastage sheets.
Has a new delivery come in?
This should be managed properly and recorded on the inventory list. Then when stock is put in store rooms staff should be rotating the stock, making sure that the oldest stock is used up first.
Regular stock reports are key to understanding where stock is suffering from disorderly handling.
Finally, stock should be kept as secure as possible and higher value stock items should be restricted to lockable areas. The managers ought to control closely who holds the keys to these areas.
3. Perfecting product yield
One of our industry reports shows holiday park and caravan park product yields to be some of the poorest in the hospitality industry. The average yield on any category of drink product should be 99.5% yield, yet holiday parks and caravan parks achieve on average 3.7% below this.
Converting that percentage into monetary terms will prove just how much operators across the country are missing out on profit. Further information on understanding yield and optimising yield percentages across every drinks category can be found via venners.com/yield-analysis.
4. Analysing product margins
When closing down the season, there is an opportunity to prepare oneself for the next one. Calculating the profit for each product based upon the cost and selling price for the last season is one of the tasks that should not be neglected. The next important task is to analyse overall sales volume.
Once an actual margin has been calculated for the season, this can become a comparative figure to benchmark the next season’s sales against. Not only that, this analysis will identify which products are worth an operator’s time and efforts, as well as help them review menu pricing to improve profits for the year ahead.
5. Reigniting all policies
Policies are forever blamed to be killers of enthusiasm, but it does not have to be that way.
Good policies will incentivise staff and help them understand their goals, motivating change and success. Noting down any learnings from the end of the season and then tweaking policies accordingly is incredibly important.
Holiday park operators that want a policy to be truly successful should become role models for their staff. For example, if a policy states that staff should pay for their own food and drinks, the managers and owners should set the example by paying for any food or drink they consume and then recording this in the system as required. This will encourage staff to do the same. If nothing else, honesty is always the best policy.
As operators approach the end of the season we wish them every success in improving their profits. Where the lack of staff blocks this progress, it may be worth seeking expert external support and consultative advice for stock-related administrative tasks and stocktaking responsibilities.
Source: British Holiday & Home Parks Assocation Journal Issue 199
Holiday park operators looking to implement critical operational and financial controls as their business reopens should visit www.venners.com for further information.