Hospitality – teaching an old dog new tricks in a Post Covid world #Blog
Briony Wilson
19th August 2020
Over the last twenty years, the Hospitality Industry has needed to be at its resilient best in order to flourish but flourish it has. According to government statistics from 2015, 1 in 10 people work in the sector and the number is continually growing. Annually the industry represents more than £100 billion and of course that makes its success hugely important to UK PLC. This, fortunately is a fact not wasted on the current Chancellor, Rishi Sunak, as he attempts to keep the industry moving with his various stimulus packages for the Covid transformed world in which we are all trying to operate
His current package, Eat Out, to Help Out; sees the government paying £10 of the bill for each person who dines, on Monday through Wednesday during the month of August, cost over £100 million in its first week. The numbers dining in restaurants are set to soar as more diners realise this is not a hoax and more restaurants see just how many diners their competitors are bringing in on this scheme. I fully expect the final bill to exceed half a billion pounds by the time it finishes. Add this scheme to his £25,000 handouts per operator to the sector when he started lockdown, which we estimated was close to £2 billion, and the same again in furloughed staff. Add on further, the reduction in VAT from 20%- 5% and you have a bill approaching £10 billion in support for hospitality from central government. Now that sounds an awful lot of money – because it is – but to give it some context, it would run the NHS for only just over a month and is just 10% of the overall contribution, annually of the Hospitality sector. In numbers terms, the support seems about right, and you aren’t hearing operators complaining at the moment, which means they are happy. The normal rule being, how do you know when a Restauranteur is happy – when they are not complaining.
If the current handouts are therefore about right, then how do operators of Restaurants, Pubs, Hotels and Cafes make things work in the new normal when these incentives are no longer available. They are going to have to adapt to stay solvent. The current working briefs are not sustainable under the new regimes. Capacities have been reduced, cleaning regimes are incredibly onerous, particularly in hotels where bedrooms are undergoing deep cleans reserved normally for quarterly inspections on a daily basis and staff training seems to be required almost every second week as a new set of directives are delivered in how to manage the public. It is going to be a big ask, financially as well as logistically.
I am not sure we, or anyone else, know the answers yet but it’s possible to see changes already. The handling of cash has gone to almost zero now, which helps with transparency but is not great for staff tips, a major incentive in a generally low paid industry. People tend to find adding tips on card machines too difficult, and there is a lack of trust that the tips will make it beyond bureaucracy to the server. Service charges will no doubt appear more regularly – let’s hope they all get to staff and aren’t absorbed by unscrupulous owners. Table ordering from your mobile phone is really taking off. We, at Taste Cheshire, highlighted QBunk as being an affordable generic system that works, others have also surfaced. These systems reduce unnecessary table visits and keep guests seated rather than visiting the bar unregulated en-masse. More flexible work rosters have been integrated as customers are recognising more and more that they cannot all eat on Saturday at 8.00pm and are moving to fringe times. I have also seen an early trend towards dynamic pricing by operators. This is exceptional thinking and allows venues to flex their menu price around the number of people who are booked to dine in the same way the airlines do, with the early sold seats at one price and the later sold seats, as they get full, at a higher price. The booking system handles the price to be charged based on the booking. This, yet again, is incredibly clever and shows the blue sky thinking that this industry is renowned for and those that adapt will survive.
The main problem is that there are very few industries that require as much human content to deliver its product as the hospitality sector. For that reason, keeping costs to a minimum, being more efficient and then delivering a personal product with great service is a constant challenge. It is here that the website, the venue operating systems, the in house Wifi are all crucial to trim 5-10% from bottom line costs and there is no doubt that the industry is rising to that challenge and finding ways to succeed but the overriding element that really can’t be changed is the human contact. It might work for Yo-Sushi to have plates whizzing around on a conveyor belt and as gimmick, it’s a good one but the lack of personality in the product means the food simply has to be top notch every time or they will die. The remainder of the businesses are going to realise, that with fewer people employed the ones they do employ are going to have to be the best.
As an industry, we have traditionally been amongst the worst employers. Twenty years ago, poor wages, poor working conditions and a lack of respect from Managers to their staff, saw turnover through the roof. We just didn’t care; how hard cant it be to fry some chips, to offer a menu, open a bottle of wine? If they can’t do it, get rid and get another was very much the order of the day and with foreign students and former soviet bloc countries getting access through the EU, we had a plentiful supply to pick from. It was only as we got closer to full employment and more venues came on board that we realised that we had to do better, pay better, listen to staff and give them the respect they deserve for delivering the product you expect. As more businesses opened in the early part of this century, OK wasn’t OK anymore, you had to be better to survive and you had to have staff who cared. That was a big change. People started to see proper wages and Management positions that meant something, as being aspirational and we started to get a better entrant into the industry. Now, again, the challenge is even greater.
As we leave the European Union, the number of candidates for any job is going to drop dramatically and only good employers, who treat their staff with respect are going to get good staff. They need to concentrate on their recruiting procedures, start replying to applicants promptly if they want to get the best staff and deal with recruitment professionally. The Hospitality industry is by and large robot proof and for that reason, no matter how hard you try to mechanise and digitise the product you are still going to need people – good people who represent your product in everything they do. It’s time to realise that this is your biggest asset and you need to constantly invest in maintaining and improving that asset.
It is not original to say that there are no bad workers, just bad managers; but it’s just as true now as it ever was. Good operators will make money now and in the future and it won’t be because they have better tills, Wifi, or computer programmes, it will be because they have exceptional staff capable of doing even more than they do now. If you are smart you will do everything to keep those noteworthy people and even more to find more of these special human beings who can light up a room and leave your customers believing they have just had a very remarkable experience. Now more than ever, it’s time to invest in the most important part of your business – people.
Stephen Wundke
CEO – Taste Cheshire