Main Photo: The weekly report produced by BVA BDRC, available to THPT subscribers
Date: April 2020
Location: UK HQ, with 170 staff in offices in London, Washington DC, Singapore, Beijing, Jakarta, Sydney and Cape Town. With BVA, the combined organisation has close on to 1,000 staff, revenues of over €185m and 20 offices in 11 countries, with a strong global reach.
Who: Dr Crispian Tarrant, Chief Executive, BVA BDRC…..Cris has been engaged with the hospitality sector for more than 30 years providing a consumer perspective on the industry. As well as measuring the nature of demand and the changing dynamics of the customer journey, much of his professional work has been concerned with the development of hotel brands and their influence in the industry.
What Are They Doing: During the coronavirus pandemic BVA BDRC is undertaking a weekly UK tracker of consumer sentiment, with a focus on the travel, leisure and hospitality sectors.
His Thoughts: It is not a natural condition for humans to hibernate. Yet this, in effect, is what we are being asked to do in order to restrict the spread of the coronavirus that leads to infection with the Covid-19 disease.
Rather, we are inquisitive and social animals. Eventually this means good demand-side news will flow again for the hotels sector. Once the restrictions are loosened we will want to travel and to meet again, although our patterns of behaviour may be quite different.
Close on three weeks into the UK’s lockdown and as the immediate shock following the onset of the crisis subsides, we are all trying to make sense of the short and long term implications for our families, businesses, our wider economy and society.
The encouraging news from BVA BDRC’s tracking of consumer sentiment, which by 9th April, was into it’s third weekly wave, is that there seems to be a bit more certainty. More people are planning to book holidays, hotels, flights and days out with a specific time in mind – even if the prospects for the start of an upturn are typically several months ahead.
But in the here and now, 78% of consumers in the UK believe the worst is yet to come. This figure, though still very high, is not as extreme as in the first week of lockdown, when it stood at 87%, followed by 81% in week two.
With the UK behind the curve in Europe we can take some solace that in similar studies by BVA agencies elsewhere, in France the feeling ‘the worst is yet to come’ has dropped from 81% to 51% in the space of two weeks, while in Italy the same metric stands at only 23% and an identical 23% now say ‘the worst is over, things will start to get better’, with the balance feeling ‘the situation will stay more or less the same as now for the moment’.
The current position will end. And when we come to look back on it we may come to realise that – hopefully – the period of tight lockdown was not so long after all – it just felt so alien at the time, with an intensity that was new to us that the impact was as great as it was.
Given what they know today, one in three Britons who are active in the travel and leisure market expect life to have returned to “something close to normal” within three months, according to new research.
This is one of the findings from the third week of BVA BDRC’s consumer sentiment tracker, a report that is available to download free of charge every Friday. As well as a general view of the “mood of the nation”, it also looks at attitudes and intentions in the hotels, leisure and transport sector as well as contributing to a wider BVA Group initiative looking at “the day after” that is running in other countries where the consulting group has a presence.
This week’s UK report suggests there are signs of relative encouragement for hotels in the medium/long term with 63% of respondents expecting to be booking a hotel room within the next twelve months, up from 54% last week. However, the next three months – at least – will remain something of a challenge with only 12% expecting to book within this horizon, down from 17% last week.
Going on holiday though is one of the priority things consumers want to do as soon as the crisis has passed. It seems inevitable that domestic travel restrictions will be relaxed ahead of those for international travel. We would add to this that we anticipate business demand is likely to lag personal demand as hard hit businesses will be reticent about building up their travel costs again, decisions that in part will be influenced by our heightened appreciation of the potential of video-conference services.
Accordingly for the hospitality industry we expect domestic leisure demand will be the first market segment to recover and hotel companies should be planning their marketing activities accordingly. Now might be the time to promote and sell hotel gift vouchers, perhaps with a discount, but, more importantly, with a booking priority.
That said, although there is a wall of pent-up leisure demand it may not hit the market as soon as it is allowed to do so. Top line results from Week 4 of the BVA BDRC consumer sentiment tracker, published 17th April, reveal a general improvement in national mood and optimism, but with less clarity this week on precisely when consumers intend to start booking, travelling and visiting again.
As there is now more discussion in the media around the exit from lockdown, it is becoming clear that many are reticent about committing themselves to behaviour as normal, until some weeks have passed after the end of the period of confinement or, for some, until a vaccine becomes available.
Hotel operators may be able to distinguish themselves from the homestay market with a scrupulous approach to hygiene as this will become a critical consumer decision factor. The new world order also will demand changes, so that the operation of hotels becomes much less ‘touch and share’.
THPT Comment: Cris is well respected spectator on the ins and outs of the UK hotel industry. He founded BDRC in 1991 as a market research and advisory group and invited the French BVA group to come in as majority shareholder in 2018.
Download the Report: from BVA BDRC direct, free of charge
The Hotel Property Team (THPT) are a small group of highly experienced business professionals. Between us, we provide a range of skills and experience which is directly relevant to those involved in the hotel property market.