DON'T CUT THE MARKETING BUDGET

The war on Iraq has had devastating consequences for the UK hotel industry. Business had never fully recovered from the events of September 11th and the slow-down in the UK economy. Never mind the economic slow-down in feeder markets such as the US and Germany. Since the outbreak of war many hotels have had their base of group business cancel. Some companies have cancelled their conference because in a state of economic uncertainty they don't want to be seen to be spending large sums of money on a conference. Others have cancelled because of safety fears over flying. And some have cancelled because they consider the UK a potential terrorist target due to our involvement in the war. Similar reasoning applies to the leisure group market.

As a result, many hotels have little or no business on the books. And little prospect of business in these segments picking up until well after the war is over. They will have to rely on the individual business traveller who has little choice as to whether he travels or not.

So, there's little point in continuing to spend money on marketing campaigns or overseas sales trips, is there? This view is no doubt held by many hotel General Managers. And yet this view is short-sighted beyond belief. Cancel overseas sales trips and the clients that you've spent the past 3 years cultivating a relationship with will soon forget you. There are enough new hotels opening in Europe in the near future, who will have sales forces out there picking up where you have left off. And if you neglect your customers now, your business will be slow to recover when the war is over.

There are opportunities to drive new conference business from those companies who had planned to hold their conference overseas, but who have cancelled due to safety concerns. But they may not consider the switch from Turkey to Tunbridge Wells unless you plant the idea. They may not have considered the merits of Cardiff, as opposed to Cairo. The UK now has a host of great hotels, of all standards, and in some great locations. Most UK hotel chains have a conference product offer that delivers standards to match the best convention hotels abroad. But this needs communicating more vociferously to meeting planners. Hotels that market their conference offer now will get noticed. When business is good and everyone is advertising, it's tough to stand out.

Similar opportunities exist to generate leisure demand from the domestic market. We have traditionally done far too little to promote the merits of our beautiful countryside, our stunning coastlines, the entertainment-packed seaside towns and vibrant cities. Domestic tourism could have its best year for a long time, if we all start marketing now. Easter is rapidly approaching, followed by 2 May Bank Holidays and the long school summer holidays. Reluctance to travel overseas by UK citizens should be capitalised upon. From the city coolness of Malmaison hotels, to the country -manor feel of many Marriott hotels, we have hotel products to shout about and that offer a great experience at a great price.

Which brings me to the issue of price. It would be very dangerous, in these tough times, for hotels to start reducing prices. Tempting as it is to do this, no-one gains in the long-term. Gradually everyone has to match lower and lower prices, with the result that any business that is generated is less profitable. And as you lower prices, you inevitably have to reduce service levels, so no-one gains. Far better to add value to make your hotel more attractive to potential guests and to do this in such a way that it differentiates your product.

Hotels that maintain their sales and marketing efforts now will not only see the benefits in the short term but will realise a return to normal business levels far quicker when the war is over. Now is no the time to cut the marketing budget!

Pamela Carvell Chairman, Hotel Marketing Association

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