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Morning Briefing for pub, restaurant and food wervice operators

Fri 31st May 2019 - Friday Opinion
Subjects: Historic year of progress, coughing up at coffee shops, delivering more than just happy customers, and when two tribes go to war
Authors: Kate Nicholls, Glynn Davis, Sally Whelan and Paul Chase

Historic year of progress by Kate Nicholls

This week we are celebrating the first anniversary of UKHospitality. Given how much has happened in the past 12 months, it’s hard to believe it has only been a year since the organisation was formed. Our goal then and now is to be the single, authoritative voice for our fantastic sector, championing the teams working in our world-class businesses up and down the country.

One of our objectives when establishing the new organisation was for UKHospitality to be included as one of the key business groups “in the room” when it came to discussing policy decisions that had an impact on members and the thousands of hospitality businesses in the UK. We are strengthening our ties and influence with the highest levels of government through regular meetings in Downing Street – and not just those focused on navigating us through the ongoing Brexit saga!

We are meeting with ministers and departmental teams on a weekly basis to inform the policy-making process and ensure MPs who conduct inquiries that make recommendations with a direct impact on hospitality hear first-hand from experts in the sector on issues such as employment costs, business rates and the future of our high streets. 

Gaining traction
Alongside this crucial public affairs and advocacy work and our ongoing programme of MP engagement, we are working tirelessly to tell your story and share your concerns through the national and trade media, and at numerous industry events and conferences. Since coming together under the UKHospitality brand, I feel we are gaining more traction with broadcasters and key national titles, which recognise the size, importance and valuable contribution our sector makes. 

Let’s look briefly at some of our notable successes:

– Scores of parliamentarians came to our Hospitality Day in October, where they met many representatives from across the sector. They saw the passion and commitment you bring in running your businesses and delivering a world-class service to the public, with many MPs pledging to do more to support the sector. We also established the Hospitality Workforce Commission 2030 to identify the strengths and weaknesses of the sector and give employers an opportunity to communicate this to parliamentarians. 

– The in-principle agreement of a landmark sector deal provided us with incredibly useful support and resources to enhance the skills and training hospitality already provides.

– Concerted and joined-up campaigning resulted in a positive Budget for hospitality, recognising and acknowledging our core campaigns around employment costs, business rates and digital paying its fair share. We estimate the measures announced as a result of our campaigns are likely to save the trade £750m across the year.

– We led the charge on business rates with the Treasury Select Committee now holding an inquiry into reform of the system, with recommendations expected in the autumn.

– UKHospitality founded an exciting new Diversity Forum to promote equality and inclusivity in the hospitality sector, which aims to share best practice among members.

– The new UKHospitality Academy provides “gold standard” learning in line with a wide range of apprenticeship standards, funded through the Apprenticeship Levy or subsidised by the government.

Continuing the fight
Looking ahead, I still feel more can be done to promote the sector’s entry-level opportunities, which range from apprenticeships to specialist areas such as marketing, finance, design, IT and law. We are a true meritocracy but need to shout more about the opportunities we provide to all, regardless of background or education.

We know the UK’s high streets have been hit hard by rising costs and have lost ground to digital businesses. We will continue to fight for a level playing field and a fair tax and regulatory system to help hospitality flourish.

As always, we’ll look to safeguard the future of the sector and protect our contribution to the UK’s economic and social well-being. Unpredictable as it may feel, we know all too well that one of our main priorities is to ensure the sector is protected in a post-Brexit world. Securing a workable migration policy to keep our teams supported, prices low and great choice for consumers has been a continual and relentless focus over the past two years. 

Of course, no-one knows what post-Brexit Britain will look like and when we might finally leave the European Union. What’s certain is we’ll remain in the thick of it to ensure the voice of hospitality is heard and continue to bang the drum for the sector and enhance its image in the eyes of the public and policymakers. 

Finally, on a personal note I’d like to thank you for all your support and kind messages over what has been a transformational 12 months. It has been an incredible journey for all the team here at UKHospitality and one that’s been hugely rewarding. I hope you will join us at our annual Summer Conference on Tuesday, 25 June to help celebrate our achievements and look forward to exciting times ahead. For more information, click here
Kate Nicholls is chief executive of UKHospitality A version of this article appeared in the latest edition of Propel Quarterly

Coughing up at coffee shops by Glynn Davis

One of the dangers of having a rabbit as a pet is they like to chew cables. When one of my children’s furry friends wandered into my office at the end of the garden he immediately sank his impressive teeth into my router cable, taking out the broadband and bringing life in the Davis household to a standstill. 

The solution was to decamp to a local coffee bar at 8.30 the next morning to receive a warm welcome from the owner as I plugged in my laptop, covered the table with work-related papers and ordered a coffee. However, three hours in and after various hot drinks I was slightly uncomfortable about whether I’d overstayed my welcome and spent sufficient money.

With a modest sense of unease I relocated to the pub over the road when it opened at midday. A couple of cups of tea, a coffee and a spot of lunch seemed a fair exchange for me taking up space for the next five hours – although it was a quiet trading day so they were hardly packed out. I also switched to beer when the clock struck five, which the coffee bar couldn’t have offered.

In a world where food and drink venues offer free Wi-Fi and increasing numbers of people no longer work in offices, my transient situation was hardly unusual. Issues arise when places are mobbed throughout the day with mobile workers spending very little money, which surely puts a strain on these businesses’ revenues?

On a recent trip to New York I found it impossible to enter most half decent-looking Manhattan coffee shops and find a seat, which led me to wander the streets until I could eventually enjoy a seated coffee and read my book. Needless to say, I was the only person in the venue not glued to a laptop or engaged in a work meeting.

This was also the case in my hotel’s lobby, where from about 8.30 every morning all the tables seemed to be operating as office space. The hotel lost custom from me having to go elsewhere for some of my F&B requirements and it’s clear that unless an establishment is proactive about ensuring these “working” customers continue to purchase goods throughout their stay, valuable business will be lost. 

At Coffeesmiths Collective, which runs various coffee chains including the Department of Coffee and Social Affairs, there is an effort to prompt customers to re-order by approaching them at their tables. This is sensible as the model involves high traffic and low-value transactions. What’s required are well-trained employees skillfully prompting ongoing sales. To further leverage its space, Coffeesmiths sometimes rents out basement space for work meetings at competitive rates, which generates further revenue while freeing up key ground-floor trading space.

I saw this type of proactive service in action on a business trip to Rome. I pitched up at an old-school cafe that comprised little more than four booths. Mid-morning it was easy for me to grab one of them, order a coffee and do a bit of work but 90 minutes later after only one espresso purchase the waitress asked: “You are going to have some lunch aren’t you?” I wasn’t going to argue as I knew I would be depriving her of lunchtime trade if I hogged the seat at this crucial part of the day. A tasty sandwich and another coffee later and I was off. We were both ultimately happy with our transaction.

Yes this does all sound ridiculously obvious but I question whether many food and drink venues – especially the coffee purveyors – are managing this process as effectively as they could. I’ve been in far too many places packed to the rafters but with little in the way of food and drink on the tables. In these tough times this seems such an obvious, and straightforward, discipline to introduce.
Glynn Davis is a leading commentator on retail trends

Delivering more than just happy customers by Sally Whelan

Six months ago the UK foodservice delivery market was worth a whopping £8.1bn (up 13.4% on the previous year) and is expected to have grown another 21% by 2021 to reach £9.8bn. No matter what you think of the takeaway and delivery market, you can’t argue with its popularity. However, you can question the areas in which it should be prevalent. Further afield from the more traditional restaurant offering, we’ve seen takeaway and delivery options become available in wet-led bars and even casinos, but what about hotels? While delivery has started to trickle through to hotels with the likes of Deliveroo’s partnership with The Ritz London, the sector could be a huge area for growth. 

Millennials “want new”, “want different” and are “shaping the future of food and drink” so, with that in mind, do millennials expect delivery in hotels? What does the general consumer think and is this even a realistic ask for operators?

Increasing guests’ choices 
Following research into eating habits in hotels, we found consumers are looking for more from their hotel operator, with 50% admitting they’d be more likely to book a hotel that promoted the use of a delivery company such as Deliveroo or Just Eat. Unsurprisingly, this number rose to 67% for millennials. Of those in favour, 70% said the delivery partnership allowed them to order food they actually wanted to eat, while more than half agreed it was refreshing for hotels to provide this option. 

A guest now expects to have the food they want, when they want, and delivery is seen as the perfect solution. Some may think integrating delivery would take business away from hotels but our research revealed in many cases there’s potential for it to have the reverse affect and lead to not only interest in rooms but enhanced beverage sales too. 

Losing out to the high street 
While four-fifths (80%) of consumers expect hotels to offer an on-site restaurant, ongoing demand for choice has meant popularity is dwindling and despite the majority of guests using hotel restaurants for breakfast, almost three-quarters (72%) admitted this was all they used it for. Convenience is no longer a key requirement within hotels – consumers want more than suitability to drive their purchasing decisions – but this statistic isn’t all bad and, in fact, shows a huge area for growth. Can hotels reclaim the lunch and dinner trade and, if so, how? 

Don’t get me wrong, I’m not naive when I say that, but what about working lunches, banquets and conferences? Third-party delivery opens the doors to a host of additional opportunities and, as someone who regularly books meeting rooms, if I’m offered a choice between a hotel that provides soggy sandwiches for lunch and one that offers my top pick from the high street – I know which one I’ll choose. 

Round-the-clock support 
There are often mixed reviews when it comes to in-room dining. It provides an option for those travelling alone but regularly restricts the type of meal available, while the quality often falls short. Our research shows more than four-fifths (81%) of consumers never use room service during their stay, with almost half (49%) blaming lack of choice. Instead, three-quarters (75%) have purchased food outside the hotel and eaten it in their room. 

While on one hand this may force hotel operators to raise their game, it also provides an opportunity to capitalise on those bringing branded food into the venue by introducing an overall service package. For larger sites, this could be through development of an app, which increases guest experience. 

F&B can often be a sticking point for hotels with pressure to adapt to the ever-changing high street. While I know it’s not simply a case of “third-party delivery fixes all”, widening your offering allows hotel operators to capture a new generation and keep up with the competition. 
Sally Whelan is founding director of guest experience management expert HGEM

When two tribes go to war by Paul Chase

It has been said nationalism is tribalism writ large. True or not, we are seeing a resurgence of both in our politics – and it’s not a pretty sight. The post-war consensus in the UK of two main political parties assembled a little to the left or right of the political centre competing on the basis each is better at managing capitalism than the other, seems to be breaking down under the pressure of Brexit. Of course, some would point out tribalism never went away, it was just displaced into football – but I don’t want to get controversial!

In a world in which we are bombarded by information, people have difficulty sorting out truth from opinion and an entire generation of millennials don’t know the difference. Out of this confusion comes a desire to find simple solutions to complex problems, and we see this in the Brexit debate as well as in the alcohol and society debate. The statement “Leave means leave – it’s as simple as that” is one of the most asinine expressions of incomprehension I’ve heard in a long time. In the drugs debate I recall First Lady Nancy Reagan saying the answer to the drugs problem was to “just say no”, while the anti-alcohol zealots of so-called “public health” in organisations such as the Alcohol Health Alliance and Alcohol Change UK (formerly Alcohol Concern) have given up all pretence of campaigning for moderate drinking to become overt champions of abstinence.

What happens is complex issues get reduced to binary choices – leave/remain, drink/abstain – which drives people into tribes where what matters is identity and emotion not detail or rational understanding. You only have to look at the debate on Twitter on issues such as Brexit, alcohol harm or transgenderism to see how anyone who disagrees with “me” is automatically designated a fascist by people who have no conception of what that word means or its historical resonance.

As someone who has campaigned relentlessly against the junk science employed by those engaged in the war on alcohol and whole-society measures such as minimum pricing, I’m interested in how Brexit might have an impact on that debate. The EU, along with the World Health Organisation, have been major sources of funding for the kind of junk science I’m referring to and, when the European Court of Justice abdicated its responsibility and passed the decision on minimum unit pricing back to the UK courts, that took away at least one good reason to support remaining in the EU. But nanny state issues are not the only thing to be considered here. 

The recent European Parliament elections illustrate how tribal the debate on Europe has become. In the UK the big winners were the hard-line Brexit Party and the pro-remain Liberal Democrats, whose campaign slogan “B******s to Brexit” didn’t easily roll off the lips of dear old Sir Vince! What’s important to realise is little more than one-third of the electorate voted, with the other two-thirds insufficiently stirred-up to bother. Nevertheless, the outcome of this election makes a compromise Brexit even harder, if not impossible. The polarisation in the country is reflected in our parliament and we may now face a stark choice – leave without a deal or revoke Article 50 and don’t leave at all. Somehow I can’t see any future Tory PM putting this choice to a public vote, although if the alternative is a general election, you never know.

Where does all this leave our sector? We rely heavily on consumer confidence for a high level of discretionary spend to keep premises going. The high street, including licensed premises operating in the evening and night-time economy, are already bedevilled by high rents and a manifestly unfair system of business rates that penalises bricks and mortar businesses and gives an unfair advantage to online businesses without a retail presence. Trade bodies such as UK Hospitality have to negotiate a better deal on business rates, future access to workers from the EU, and alcohol duty and minimum pricing against the backdrop of the continuing uncertainty of Brexit. It’s an unenviable task.

I don’t know how the Brexit impasse will be resolved but if Theresa May said one thing that’s true, her departing words “compromise is not a dirty word” have resonance. Finding a compromise when two tribes go to war is an exceedingly difficult task – but the future of our sector and wider economy depends on the ability to find one.
Paul Chase is director of CPL Training and a leading commentator on alcohol and health policy

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