How Hospitality businesses can turn challenges into opportunities in 2025
Scott McKerracher, Head of Commercial at The Cumberland, reflects on how businesses can turn challenges into opportunities within the Hospitality Sector.
While inflation has reduced closer to government targets and with interest rates starting to fall, pressures remain for Hospitality industry despite easing across the last 12 months.
For example, staff issues and higher operational costs continued to put pressure on businesses. But despite 2024 providing a mixed bag for the Hospitality industry, the year saw levels of occupancy come closer to pre-pandemic levels, providing a much needed boost for the sector. As we look forward to the year ahead, there is room for optimism if Hospitality businesses are able to seize the opportunities available to them.
With consumers looking for valuable, memorable stays, ensuring customers live the experiences they value will help foster strong relationships between businesses and customers, encouraging repeat visits. Additionally, the Hospitality business will positively impact the community by providing an economic boost from returning visitors who will spend money locally.
At The Cumberland, we are proud to be celebrating our 175th anniversary this year and hold more than 20 years’ experience, supporting Hospitality businesses with our Kinder Banking, people first approach. While our Relationship Managed service sees customers supported by real people who understand their needs and will proactively work with them to provide support.
Turning Challenges into Opportunities
Acknowledging the challenges facing the industry is the first step in identifying the opportunities.
The cost of running a business remains at an elevated position with increased energy prices and operating costs adding additional pressure. Meanwhile, the cost of living continues to impact consumer behaviour, with the ONS Opinions and Lifestyle Survey finding 60% of adults are spending less on non-essentials, and 44% are shopping around more. Staff shortages continue to represent a further challenge.
While the figures may be disheartening, reading into them deeper reveals an opportunity. Customers want to see their money stretch further. They want to feel the value of the experience they are buying, and crucially, they want to feel like wherever they are staying, is unique and personalised to them.
Where Hospitality businesses can generate valuable experiences which leave lasting impressions and memorable stays, they are likely to appeal to consumers and build long-term relationships, encouraging visitors to return.
Such stays can be created by incorporating amenities such as mindfulness retreats, yoga sessions, and nature-based activities, which not only diversify their offering, but will attract a loyal customer base who appreciate the efforts the business is taking to ensure their visit is a memorable one.
Sustainability is growing in importance for some travellers, and businesses who amplify their green credentials will appeal to customers who want to see the venues they visit take pride in the world around them. Viable options will be unique to the business but may include the implementing of renewable energy solutions, designing spaces that prioritise environmental responsibility, or incorporating waste reduction measures.
Partnering with local businesses and tourism boards to offer curated experiences can further enhance the guest experience while driving a sense of community. An example of this can be found at Monachyle Mhor hotel in Lochearnhead in the county of Perthshire, Scotland, where owners have developed a wine safari offering for guests to enjoy.
Additionally, with guests desiring stays which are more attune to their personal needs, modernising rooms can also cater to expectations for comfort, sustainability, and technology integration, helping your accommodation to stand out.
Above all, human interaction is key. Visitors want to feel like they are at a home away from home. They want to feel welcome, valued, and they want to cultivate relationships with new people. Businesses that create genuine connections with their guests will leave lasting impressions that inspire loyalty and positive word-of-mouth.
Building a connection with your guests can often come from your employees. Creating a supportive and rewarding workplace culture enhances retention, but also positions the business as a desirable employer in a competitive job market. Furthermore, a proud, content workforce will be the first line of communication between your business and your guests, helping to create those exceptional experiences that your guests desire.
While challenges remain in 2025, the year holds a lot of opportunity too, and savvy organisations who delve deep into understanding how they can adapt to meet these challenges to deliver unique experiences can emerge with a service proposition which will hold them in good stead moving forward.
At The Cumberland, helping those in the Hospitality industry along this journey is something we strongly believe in.
To find out more about how The Cumberland could help your business, please click here.