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Thursday, 02 July 2015

Grim economy is hitting trade at Cumbria's hotels

Sales at Cumbrian hotels fell last year as Britain’s economy continued to stagnate, a report has found.

Seaside venues were worst hit seeing turnover fall by nine per cent, according to the Hotel Benchmarking Review.

The study, by accountants Moore and Smalley, examined the accounting data of more than 50 hotels. It found that turnover dipped on average by five per cent at Cumbrian hotels last year, compared with 2010.

But the businesses studied had managed to slightly increase their profit levels, despite the dip in sales, suggesting they were cutting costs.

Colin Johnson, head of the leisure and tourism team at accountants Moore and Smalley, of Kendal, warned hotels against cutting too deeply.

“Income is hard to come by and room rates are being challenged across the sector,” he said,

“Turnover is down on average and seaside locations have suffered the most with an average drop in turnover of nine per cent on the same period the previous year.

“As turnover has reduced and wages have risen this suggests that hoteliers must have been cutting other costs in order to report an increase in net profit.

“We have seen a reduction in marketing spend but this has to be done with caution.

“Cutting back too much in these areas can lead to reductions in sales for years to come and hoteliers need to ascertain which areas of marketing are not working and concentrate on more effective marketing techniques to find ways of attracting customers.”

Despite the cost cutting, expenditure on staff went up, suggesting hotels were focussing on other areas.

Investment in facilities dropped considerably, the report found.

Hotels in the countryside did better than those at the seaside, probably because they host more weddings, the report said.


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