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VAT cut puts meal deals and smart ticketing on the attractions menu

Posted by Omnico on Jul 17, 2020 10:48:16 AM

Sales taxes and excitement rarely go hand-in-hand, even in the world of theme parks and attractions. But the UK Chancellor of the Exchequer’s announcement of a 15 per cent cut in VAT for the hospitality industry generated a flurry of headlines. The cut, from 20 per cent to five per cent runs from now until January 12 2021, and includes attraction admission, hotel rooms, food and non-alcoholic drinks sold by restaurants or takeaways.

The chancellor’s decision means the UK joins Germany, Belgium and Austria in cutting VAT (Value-added Tax) to stimulate the hospitality industry, although the UK has implemented a bigger cut. In the UK, VAT in theme and amusement parks has long been a bone of contention.

Operators will of course welcome the cut which has come as they consider how to reopen while maintaining social distancing for their staff and guests. This has inevitably concentrated operators’ minds on how to use apps, kiosks and RFID technology so guests order and receive food or drinks in a low-touch way that reassures anxious guests and remains compliant with regulation.

The VAT question should, however, stimulate operators to think more seriously about two other aspects of their post-Covid toolkit. Firstly, how they can use meal deals to get people back through their gates and secondly, on how they can transform ticketing.

A big opportunity to promote meal deals

Meal deals have been somewhat overlooked by attractions and destinations. Their advantages for operators lie not just in advance payment but also improved predictability for resource-allocation and planning.

Meal deals enable guests to order and pay for the food and drink they want in advance. They are attractive to budget-conscious or very organised visitors who want more certainty, perhaps because they are in family groups. Disney and Universal were using them before the pandemic.

In the economically uncertain times we now face, the attractiveness of meal deals should be pretty obvious. Nevertheless, in a survey Omnico conducted before the pandemic, just 45 per cent of US theme park visitors were aware of meal plans and only 39 per cent used them.

Parks and destinations should be promoting meal deals with more vigour. The research also found that 78 per cent of guests would happily buy meal plans if they were part of a package with loyalty points that could be spent in the park or destination.

Regardless of the country or sales tax regime, meal deals and food plans need to part of a destination’s Covid-recovery engagement toolkit. 

Think smarter about ticketing

Smart ticketing

The reduction of VAT on admissions should also trigger some more serious consideration of smart ticketing. With no obligation to pass on the VAT cut to the guest, UK attractions could use this windfall to implement smart ticketing that is 30 or 40 per cent less costly to operate than conventional ticketing while offering guests far greater functionality. It also generates masses of data that engagement engines use to drive up spending-per-visit through greater personalisation of offers and promotions.

Covering everything from admission to room-booking and food and beverage or one-off shows, across any number of sites, smart ticketing works across websites, smartphones, RFID wristbands, POS terminals, kiosks and tablets.

Customers always have access to their tickets and can see the loyalty rewards or offers they are entitled to. It is easy to add extra meals, or a new experience and there is no need to resubmit details for a subsequent visit, even to another location, provided guests have a valid ticket. Ease-of-integration with third-party systems enables tickets to be included in packages sold by big names in online travel such as Expedia, Booking.com or 365Tickets. When families are looking for deals, this offers significant competitive advantage.

There are many other advantages to smart ticketing, which Omnico can explore with operators. What is certain is that the post-pandemic recovery is the perfect time to be thinking hard about meal deals and smart ticketing, whichever tax regime an operator works in.

Omnico Insights

The Omnico blog reflects various trends, themes, content and research that we feel is important in the industry and across the various sectors we operate in. Subscribe to our blog and newsletter to stay up-to-date on this content. 

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