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Fri 4th Jan 2019 - Friday Opinion
Subjects: Making hotels pay, the war on choice and making hospitality sexy
Authors: Glynn Davis, Paul Chase and James Hacon

Making hotels pay by Glynn Davis

Christmas is now sadly gone and my family’s focus has firmly shifted to looking at where we could venture on our various holidays and short trips away during 2019. One consideration had been a return to the mid-sized independently-owned Pelham House Hotel in the East Sussex town of Lewes that we very much enjoyed on our initial visit. The draw had partly been down to the fact my son’s name is Pelham but it also ticked the boxes of location, interesting building, and decent reputation for food in its restaurant.
 
I’ve always enjoyed the feel of such modest sized venues (36 bedrooms in Pelham House’s case) that also have a decent bar and restaurant offering. They work really well when the owners manage to successfully marry up great personal service without the interaction being too overly familiar – if I require something then please sort it out as soon as possible otherwise my preference is to be largely left alone.
 
The reality for such hotels is life is pretty tough. In conversation recently with Steven Kenee, partner at finance firm Downing, I found out Pelham House Hotel is in fact currently closed and Downing is involved in financing its change from operating as a hotel to a dedicated wedding venue. Through its own "Downing Crowd" crowdfunding platform, it is raising £2m for Artemis Venue Services through an innovative bond offer.
 
For those hotels with few bedrooms and a food offering that is not top-end destination dining it is hard to make it pay because the resources (namely the specialist personnel) required to run such an establishment with 30 rooms can be just the same as for one with 50 to 60 bedrooms. The economies of scale don’t exist and the reality is these mid-sized venues have to be largely driven by their food and beverage offers.
 
With a wedding focus these hotels could do as many as 180 events per year. This sounds an incredibly high number but is wholly possible, according to Kenee, who says it can be particularly profitable if done well because the whole space and its resources are dedicated to this specific function. The "special day" for the customer becomes very much a "standard day" in procedure and process for the hotel.
 
Although the Pelham House Hotel has now been removed from our potential hit list for 2019, one place my family and I will likely be returning to again – having just enjoyed another lovely short Christmas break there – is the Old Bridge Hotel in Huntingdon. This is a 24-bedroom hotel that very much fits into that difficult mid-market position of not being able to enjoy the economies of scale from a high volume of room bookings and it’s food (which is very good) not at the travel-across-the-country destination level.
 
This is very clearly recognised by its owner John Hoskins MW who has worked hard to create a successful model for his modestly sized hotel, which has in my opinion never failed to deliver on all fronts whenever I’ve stayed there over recent years.
 
He accepts the hotel’s “not exceptional” average occupancy rate of 75% contributes to the accommodation delivering less than 25% of total revenues. But what he does not accept is underdelivering on the food and beverage offer at the hotel. Apart from Hoskins, his wife (who co-runs the hotel) and the accounts person, there are a “ridiculous, for this sized hotel” 80 members of staff focused on serving the customers.
 
The high levels of service combined with keen pricing – he makes no profit on coffee and is okay with breaking even between 10am and noon – ensures the hotel has a buzzy feeling right from the off. This formula attracts a constant stream of people throughout the day and the appealing atmosphere translates into a busy bar as the day wears on.
 
Many of these bar customers are drawn towards the hotel’s secret weapon – it’s wine list. The "MW" after Hoskins’ name denotes Master of Wine and let’s just say he knows his stuff when it comes to the old vino and he offers a revolving array of wines by the glass at competitive prices. The result is the hotel’s wine and bar sales equate to an impressive 75% of food sales, across the organisation.
 
On top of this, there is a separate wine shop within the hotel that generates a further 10% of revenues. This highlights how a focus on a few core essentials, alongside some unique aspects, ensures a hotel such as the Old Bridge does not need to go down the route of shutting up shop and becoming a dedicated events venue. Although, like any hotel worth its existence today, I’m sure it can probably also deliver weddings to remember.
Glynn Davis is a leading commentator on retail trends
 

The war on choice by Paul Chase 

If anyone had any doubts Public Health England (PHE) is a cabal of mad scientists’ intent on world domination, then its latest pronouncements on calorie caps for ready meals and restaurant food should have dispelled them.
 
Early warning of the latest proposals came in 2018 when PHE "recommended" people should limit their calorie intake to no more than 400 calories for breakfast and 600 calories for lunch and dinner respectively – a total of 1,600 calories a day. This is fewer than the calories allowed under Second World War rationing, which ended in 1952! However, PHE has confirmed its overall recommendation of a daily calorie intake of 2,500 for men and 2,000 for women has not changed, so snacks between meals are meant to make up the difference.
 
But PHE has now gone much further than a recommendation for daily intake. According to PHE’s head nutritionist Alison Tedstone, most adults are eating 200 to 300 calories a day too much and one-in-five meals are now eaten outside the home, with meals eaten at home frequently being of the convenience variety – pizzas, ready meals etc. And it isn’t enough supermarkets and restaurants offer low calorie and healthy eating options that enable people to make their own choices. PHE operates on the Animal Farm principle – as Squealer from George Orwell’s famous book put it: “No one believes more firmly than Comrade Napoleon that all animals are equal. He would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?” Stalinism is alive and well and living off the “public health” succubus.
 
Professor Dame Sally Davies, England’s chief medical officer, in backing the new guidelines, says she is quite happy to be labelled as the nation’s chief nanny, which is just as well because nowhere in the world has government gone as far as PHE wants our government to go – because make no mistake about it, when guidelines and recommendations fail to deliver enough volunteers, it will reach for the rulebook.
 
Here are some of the proposed calorie caps:
– All convenience meals: 544
– All restaurant mains: 951,including pizzas unless you buy them in a supermarket in which case the cap is 1,040
– Sandwiches: 550
– Salad (as a main): 550
– Portion of chips sold in a supermarket: 302, or 416 if sold in a restaurant
– Onion bhaji: 134
Vol-au-vents: 134
 
For anyone familiar with the “public health” playlist in relation to tobacco, alcohol and sugary drinks it will come as no surprise to learn PHE cites the “obesity epidemic” – or “pandemic” as its now calling it, as a justification for all this. And of course, the “childhood obesity epidemic” also features prominently in the list of things used to create and maintain an alarmed public opinion.
 
As Chris Snowdon, director of lifestyle economics at the Institute of Economic Affairs has shown, the childhood obesity crisis is a fiction. Whereas adult obesity levels are generally a reliable, rough-and-ready calculation based on body mass index (BMI), with a BMI cut-off of 30 as being officially obese, childhood obesity is based on a mathematical model. If a child’s weight today places him or her in the heaviest 5% of children in 1990, then for statistical purposes they are classified as obese. But if the assumption the heaviest 5% of children in 1990 were obese is wrong then all the childhood obesity calculations based on that assumption are wrong too. Since we know obesity levels among 18-year-olds drops abruptly as compared to the prevalence of obesity among under-18s, because the method of calculation changes, the assumption on which childhood obesity calculations is based is almost certainly wrong.
 
This is the problem with much of what purports to be public health science. Messages from lifestyle zealots repeated endlessly on social media create a false consensus, and this is then reported as fact. Anyone disagreeing is then labelled a denier, probably suffering from some imaginary psychological disorder ending with the suffix “phobia”. There will surely be a public revolt against this latest assault on the food chain by this bunch of nanny-state scolds; people instinctively reject being patronised and infantilised and it may yet turn out this latest episode in the war on choice will backfire on the fat cats of PHE – a quango that is now way out of control.
Paul Chase is director of CPL Training and a leading commentator on alcohol and health policy

Making hospitality sexy by James Hacon

Brexit is looming, recruitment is challenging – and it’s going to get worse. We need to get better at promoting hospitality as a career to attract more young people. Twitter fans will have read or been part of the growing conversation in recent weeks. A considerable hospitality community is using the platform to debate and discuss industry issues.

There are several key opinions on how we can make a difference to how our beloved industry is perceived. Many lean on the idea government needs to do something but I’m not convinced this is a government priority. While I understand the sector’s outcry about hospitality being labelled “low skilled” – with the government’s continued use of the phrase when speaking about our sector not helping – my feeling is we should be doing far more to help ourselves.

Speaking at schools is not the answer
Many people seemed infatuated with speaking at schools to promote the virtues of hospitality from a young age. This strategy is riddled with holes. Firstly, you assume schools are giving active career guidance – several friends are secondary school teachers and they tell me this isn’t always the case. There are limited slots available for outside speakers to visit schools, with much of this time taken by universities. When industry speakers come in, it’s often to cover a specific subject such as business studies that may only be attended by a small group of high achievers.

The less easy pill to swallow is many teachers don’t want to encourage a career in hospitality. It’s not a career they know much about but the perception is of low skill and low wages, as is traditionally the case. They are actively encouraged to get students into university and it is a KPI for many sixth forms. What doesn’t help, of course, is a lack of cookery, customer service or vocational hospitality training at schools.

If we want to start adding value at school age that doesn’t necessarily mean actively promoting hospitality in schools. What it can be is actively championing better access to vocational training options at years ten and 11 and at sixth forms, as well as working with apprenticeship providers to offer engaging and attractive apprenticeships. We should also encourage government to bring back kitchens at schools and get them to teach life skills that include cookery.

Influencing the influencers
We should actively target and educate teachers through campaigning, as they will have a massive influence. Given many who enter our sector aren’t academic high-achievers, it seems obvious they are going to be particularly influenced by a teacher so we need to work with them.

Speak to any teenager and most will spend hours watching their favourite YouTuber and awaiting the latest Instagram story from a social influencer. We should be co-ordinating sector-wide campaigns with respected influencers to shine the light on brilliant careers in our sector and create our own influencers from some of the fantastic young talent working in our businesses. Let’s stop putting 30-something business owners forward as the sector’s cover guys and girls – they are ancient to a teen. We need teenagers or those in their early 20s who are vibrant and communicative.

Looking further up the funnel
After leaving university, only half of all UK graduates work in a field that relates to their degree. According to research published in the Daily Telegraph in 2014, 96% had switched careers by the time they turned 24 – eye-opening statistics you’ll agree. What it does highlight is we have an opportunity to influence students right through their university career. Many of the best people I know started working in the sector while studying for a degree in a completely different area.

Our sector is brimming with college and university-age students. Does your business have proper mechanisms and strategies in place to encourage these people to stay and turn it into a career? In businesses I’ve been involved with, time and again I’ve watched bright, inspired people who love their job go off to pursue a career after university in another field, only to return later.

Others have told me they would have stayed if they’d known there were bigger opportunities on offer. We often over-rely on site-level managers to recognise and harness talented people. In my experience, the weekend-working students are seen merely as extra help. They might not receive proper one-to-ones or communication about career paths and may be left believing the only career in our sector is front of house with progression stopping at general manager.

The opportunity is there to actively engage with students on a wider business level. Let them understand the opportunities and career pathways available. Offer graduate training schemes, conversion training or post-graduate level qualification sponsorship for hospitality-related courses.

Build an employer brand that inspires the young
I’ve had two students opt to spend some time at Think Hospitality during the past few months. One was 14 and on work experience from school, the other at sixth form. I asked them to review some of our sector’s biggest employers and most well-known brands on how they promote careers. The students suggested the promotions were way off the mark and “boring”. Here are some tips based on their feedback on what employers can do to improve this:

Have a website: It’s amazing out of the brands we looked at how many had no careers section on their website. An equal amount included one but it was hard to find. Invest in promoting your business as a great place to work. You should also include why hospitality is a great career, not only your business – you are selling the sector first, your business second.

Use more video: “We want to see what we’ll be doing in our jobs, we want to see people like us and hear from them.” This is a must – teenagers don’t like to read – even the informational sections should be turned into videos, as well as case studies.

Look beyond your own website: “I’ve searched these companies on YouTube and Instagram and only see ads, nothing about working with them.” Think beyond your own website, look at social channels too. One challenge was companies used their corporate identity for careers and the teenagers didn’t understand. Your brand name needs to lead.

The uniforms are boring: “I always wonder why restaurants don’t let their staff wear things they like instead of black. I like to express myself and feel I wouldn’t be allowed to if I worked in hospitality.” This is fascinating as our sector tends to include many people who like to express themselves but they are often stuffed into regimented uniforms. Giving team members ways to express themselves seems a good option. One large casual dining brand did this to great effect a few years ago.

Why does everyone have tattoos? “All the cool brands feature staff with tattoos on their photos, I don’t want a tattoo.” In contrast to the last point, it feels like many have gone down the route of using more “alternative” team members in employer branding. It’s important to have a good range of people to avoid putting others off.

Trial shifts for them, not you: “I’d like to see whether it’s something I’d like to do and be good at.” The idea of being able to give a career a go is interesting and both students were nervous about whether they could carry out certain tasks. Simple things such as carrying plates or chopping vegetables were things they’d never done before. We talked to them about trial shifts and open days but both students thought it would be great to try things in real life before being interviewed. This plays into the love of experiences among generations Y and Z. It is an interesting concept to use off periods for potential staff to “give it a go”. 
James Hacon is managing director of Think Hospitality, which advises multi-site brands on growth, brand and development strategy, as well as investing in early-stage concepts with a bright future

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