How can holiday park and caravan park operators make greater profit from their clubhouses, bars and restaurants?
Tips from Malcolm Muir, Venners Consultancy Director
UK holiday park and caravan park operators have been benefiting from the boom in stay-cations across the UK over the last couple of years. Now more than ever, this travel trend is likely to continue for quite some time as the nation escapes the Coronavirus pandemic. Living within the new norms of travel restrictions and bearing in mind the likely economic slump which is to follow, stay-cations are definitely here to stay.
New Opportunities for Holiday Park and Caravan Park Operators
As holiday park and caravan park operators welcome this new wave of customers, they’ll look to make the most of this opportunity and make as much long-term profit as they can in the process. Interestingly though, many of them struggle to make real profit from one of their most vital business areas: namely their food and drinks operations. Clubhouses, bars and restaurants within these types of premises are not always given the attention they should receive. Nor do operators tend to experience the real benefit this part of their operation plays in their sales mix and final profit figures.
Even despite new COVID-19 related restrictions, holiday parks and caravan parks tend to have the unique advantage of access to open and outdoor spaces. It clears the way for them to make huge profits from their seasonal hospitality bars. The opportunities for profit growth are truly there, but only shrewd holiday park and caravan park operators will reap the full benefits.
The truth behind higher Food & Drinks Profits
Does your bar and catering operation keep you up at night because it’s not profitable? You are not alone! It certainly is a difficult challenge to manage food and drink operations and make a profit.
Holiday park and caravan park bar operations are diverse and range from multi-bar entertainment venues to members clubs with minimal profit levels. Whatever the situation, they should be contributing to the overall success of the holiday park. It sounds so simple, but to really run a profitable food and drinks operation you’ll need to introduce the right elements of control.
1. Incentivise your teams
Caravan sales and holiday bookings are usually the main focus for any operator, as they provide the largest portion of revenue and profit. Staff in these areas tend to have a variety of targets to incentivise performance. Our tip would be to replicate this for your hospitality area too, since targets are a great way to keep track of performance, whilst also improving engagement with customers and staff alike. Some examples of the areas of focus you can look at are: customer feedback scores, daily or weekly revenue, individual product sales, number of meals served, or awarding employees as star of the month. Incentivising your teams can do wonders for your overall profits. It’s one of the best ways through which operators can motivate staff into performing at their peak.
2. Put yourself in your guests’ shoes
I have visited a lot of holiday parks, both professionally and personally, and am always surprised at how some elements just don’t quite flow or work as they are intended. It can be as simple as a missing sign, a queue system going the wrong way, or an opportunity lost by the staff. In a post COVID-19 world, the new normal will introduce even more areas that will be scrutinised by hundreds of guests who may be complete strangers to the holiday park. Doing a regular review where you make yourself a stranger and don’t follow your initial instincts is really important. Follow the herd to spot areas of weakness that aren’t obvious to the scores of newcomers you welcome every week, even though they may seem obvious to you.
3. Introduce cashless controls
The world has been slowly drifting towards a cashless society, but the COVID-19 pandemic has accelerated the process quite significantly. The more cashless your business goes, the more you will need to review your normal credit card controls, which includes daily reads, voids, refunds etc. You’ll need to add extra controls too. Are all card machines counted daily, locked away at close down and supervisor access secure? We are finding numerous ways that card controls can be manipulated.
In addition, for the opportunist, cash becomes an even higher target. Holiday Park vending and gaming areas will need a regular review to stay one step ahead.
4. Keep track of your profits
Many operators come up with great ways to draw guests in from beaches, tents, caravans and chalets. Some of these might include paying for a live sports TV licence, providing more staff to improve table service, or maybe just giving customers a free sausage roll. In reality though, these are all costs that you’d hope to offset by more sales. No matter which way you look to attract more customers, it’s all about finding that balance between cost versus profit. Make sure you review them throughout the season and be prepared for an overhaul each winter.
5. Calculate profit levels per product
By calculating your profit levels for each product you sell you can see the impact of all your sales and promotions. It will enable you to benchmark future sales by helping you set a theoretical profit level. This theoretical profit level, once compared with actual profit levels, will give you an indication of how your site is performing.
Check your profit levels for key items in particular. These include chips, Prosecco and G&T. Making these high demand items too cheap can result in guests not spending money across your entire range of products. This could seriously reduce your profit levels.
6. Manage your manager
Your manager might be another great attraction to your clubhouses, bars and restaurants, but they can also become a dangerous distraction! There is often a thin line between a manager being a best friend to all and them being an operational genius. All too often the best friend can become a drain on profits.
To make sure they don’t cross that line it is vital to set some key rules that you want them to abide by. The best way to stay in control is to give them targets. The type of KPIs you set are up to you, but might include overall profit percentage, number of guests, revenue levels or customer feedback.
7. Establish training standards
In our experience the staff at seasonal sites are central to a bar’s success. Serving behind a bar is a rite of passage for many people, but often it is treated as a simple job that requires little training. A lack of training standards will, without doubt, impact both your profit and reputation negatively.
Untrained staff will not only produce high levels of wastage, they’ll also be ignorant of the need to report on it. Training your staff should speed up service, prepare them for upselling, help them engage with guests and be more proactive in general. You can create a fantastic ambassador for your site who will generate more sales for you and more tips for themselves in the process. Make sure you outline clear training goals for your food and drinks operation and then put in place methods to measure their success.
8. Monitor for staff theft
Despite your best intentions, there are also times when a member of staff doesn’t perform as they should. This can result in a loss of stock, money and/or reputation. Knowing that you are employing staff on low wages, asking them to work unsociable hours, giving them access to food and liquor and allowing them to deal with large amounts of cash can make you vulnerable to theft. Now we’re not saying that all staff steal, but the sad reality is that it is more common than you’d think! Even more worryingly, in our experience, it is more often than not done by those members of staff that are trusted the most.
A few simple steps can help to reduce chances for opportunists. These include:
- making sure the till display is visible to the client
- making sure your product pricing ends in odd numbers (e.g. 95p) to ensure customers wait for the change and staff ring it into the till
- Control who has access to stock areas when you are not trading
Achieving Peak Food & Drinks Profits
There really is a lot for holiday park and caravan park operators to think about when promoting a profitable food and drinks operation. Venners has a long history with helping leisure parks make more profit from their clubhouses, bars and restaurants. We’d be more than happy to send one of our consultants to review your business and help you set up a strategic plan. Step-by-step recommendations will help you tackle areas that are vulnerable to losses and help guide your operation into making more profit.
Fill in the form on this page to get in touch and discuss your challenges with us.
Fill in the form on this page to get in touch and discuss your challenges with us.