Last November, I boarded the plane for Tampa after listening to Andy Hornby, chief executive of The Restaurant Group, speak at the Propel conference about the need to view the US as a collection of regional markets. Smart thinking. Over the years, many UK operators have viewed the US as the place where they can really scale their business. The likes of PizzaExpress, Pret A Manger, YO!, La Tasca, Wasabi and even Wagamama have found the reality a lot different from the growth mecca they originally anticipated.  

 

The first mistake was normally to take on the Godzilla of all markets – New York. The cost of doing business there is always underestimated, and the things the various UK brands think are special about them mean nothing to New Yorkers who have plenty of other better-established choices. Wagamama were smart enough to initially give New York a miss and start in Boston, but even there it was a struggle for several years.

 

I’m now involved in a US brand that started in Florida and is trying to find regional markets to develop. Thankfully, what we have all agreed is that New York and Los Angeles are the last places we want to go. They call California the land of fruit and nuts with good reason. Doing business there is very difficult. The level of regulation and tax structure has forced many hospitality businesses to focus elsewhere.

 

I still bear the scars of an ill-advised attempt to grant a franchise to a wealthy individual who opened one of our restaurants in Newport Beach some 20 years ago. We had built the business primarily in the mid-west. Our advisors at the time told us if we wanted to make it in casual dining and get to $100m in sales (the then magic initial public offering number), we had to prove the concept in at least two other markets to show the business could be scaled. 

 

After a certain amount of market research, we decided on Denver in Colorado and Dallas in Texas (the latter seen then as the mecca for all US casual dining concepts). At the time, each of the four locations cost $1.5m to build and needed average unit sales of $2.5m to provide our benchmark return on investment of 25%. Only Denver made it, and we lost $4.5m to start with, and about $6m by the time we were out of the other three leases. It nearly sunk us. Thankfully, the core of the mid-west business was solid, but it took us three to four years to recover. Had we kept to proven regional markets like Ohio, Pennsylvania and Illinois, I think the result would have been very different. 

 

Even armed with this experience, the ability to grow the business in the current environment has a number of challenges. Our average footprint is currently more than 8,000 square feet plus patio, and to get a new location open, the cost is approaching $4m for the leasehold improvements and soft opening costs. Just as in the UK, the returns on capital are not what they were.

 

The solution is to reduce the footprint together with the menu, alongside employing the latest technology available to make operations more efficient. This becomes even more critical as labour costs become a bigger part of the equation. The reality is people don’t want to work back-of-house, they don’t want to work Sundays and they don’t have the same service orientated attitude that existed when we first opened restaurants in the US in the 1990s. 

 

That being said, we are up for the challenge. The US economy is a machine. Eating out frequency in the US remains at a high level, and if you can deliver a great experience, the opportunities to build a business in the US are still much greater than they are in the UK or Europe. Although I’d rather open a restaurant in Paris than go back to California!

My annual mid-January trip to New York City for the world’s premier retail technology event, Retail’s Big Show, organised by the National Retail Federation (NRF), highlighted how there is no escaping artificial intelligence (AI). Since last year’s event, it has arguably gone from a hyped-up technology looking for a home to a game-changer that is now genuinely impacting all parts of the retail sector. 

 

The use-cases for AI seem to have exploded over the past 12 months, and many retailers at the event detailed how the technology is being used to benefit their businesses. This ranged from generating marketing communications and other content, improving new product development processes, driving personalisation, boosting forecasting capabilities, enhancing customer service through the likes of intelligent chatbots, optimising inventory through the supply chain in order to reduce waste and improving the throughput of goods. I could go on and on.

 

Despite various organisations in retail having some difficulty grasping the technology and how to implement it, the sector is definitely forging ahead. The earlier perception that it is the harbinger of the death of many jobs is undoubtedly falling away. Half of shop workers are not worried about AI and automation replacing their jobs, with 31% believing it could positively impact their role, according to research from Scandit. 

 

There is a growing belief that AI can be used to empower people on the shop floor as well as in the C-suite. Speaking at NRF, Greg Cathey, senior vice-president of transportation and innovation at Walmart, said all employees have a company phone and access to the app. “With Generation AI we’ve democratised data…you can take all the knowledge in the company and give it to all the associates,” he said. “This is people-led technology power.”

 

Hospitality is not in such an advanced state. Consider that recent research from CGA by NIQ found that 76% of respondents accepted that hospitality is lagging behind other consumer-facing sectors when it comes to embracing AI. Hospitality is undoubtedly being held back by it still being, at heart, a people-driven business. The argument that no technology can replace the human touch still holds firm for many people.

 

But just as with retail, AI is not a replacement, it’s an enhancement. It can drive efficiency, which is much needed right now because the hospitality industry is surely heading for trouble – death by a thousand costs – unless it embraces solutions that optimise labour and operational practices that boost ever-decreasing margins.

 

That there is an acceptance the industry is a laggard is a good sign and suggests heads aren’t in the sand. There are further positives to be taken from the research also finding that 59% of hospitality leaders are curious about the prospects of AI and that 39% believe AI will be transformational. The whole sample also reckons AI will, to varying extents, be valuable to the running of their businesses.

 

Where things fall over is with the great uncertainty most companies have with how to move forward. Needless to say, it is the larger operators, with availability of resources, which have been undertaking research into the potential benefits of AI. I’d propose that it doesn’t really take that much research to find out that there are clear upsides to utilising the technology in hospitality.

 

There are plenty of examples of it being used increasingly effectively, including: within call centres; CRM systems; intelligently scheduling employee shifts; ordering and booking systems; analysing sales patterns to help with forecasting, sourcing and promotional activity; optimising food production; and the creation of marketing campaigns. I also came across AI being used in HR, with start-up TalentUnlimited not only filtering through job applications, but also using the technology to undertake actual job interviews and then delivering extensive feedback to applicants and employers.

 

The problem for many smaller businesses is that IT is such an alien beast. When I was recently reporting on The Athenaeum Hotel & Residences winning the Best Use of Innovative Technology Award in the Hotel Cateys 2024, it was evident that its impressive use of data and AI technology had been massively helped by its IT-savvy head of marketing.

 

If lavishly resourced IT departments are a nice-to-have, then companies should actively seek out IT-literate people within their organisations, wherever they are hiding. Empowering these digital natives already on the payroll would be a great boon. This, combined with targeting the friction and pain points in a business, is certainly a good starting point. 

 

Amid all the present uncertainty in the hospitality industry, one of the more certain future outcomes will be the increasing use of AI, just as has been the case with retail, so companies should get their hands dirty sooner rather than later.

Loyalty was one of the big topics in the hospitality sector last year, and with our research showing nearly one in three restaurant, pub, and bar patrons are very or somewhat likely to switch which venues they choose to be loyal to, we can expect it to be the same in 2025. 

 

At the same time, the industry faces another pressing issue: no-shows. During 2024, these surged to a record high of 14%, reflecting both the volatility of consumer behaviour and the pressure on operators to deliver consistent value. To thrive in this landscape, hospitality venues must redefine loyalty strategies by balancing in-venue excellence with targeted, data-driven outreach.

 

The reality of changing habits means consumers are becoming more adventurous and less tethered to specific brands. Our research, in partnership with CGA by NIQ, found nearly 34% of restaurant customers are likely to switch venues, compared with 29% for pubs and 30% for bars. This is especially true for the younger generation, with adults aged 18-44 exhibiting the highest tendency for switching, driven by a desire for variety and new experiences.

 

On the other side, older consumers and parents tend to exhibit more loyalty. Older adults, having spent decades forming relationships with venues, value consistency and familiarity. Similarly, parents prioritise venues they trust to deliver reliable service for their families. These differences underline the need for tailored strategies to foster loyalty across diverse demographics.

 

While loyalty schemes have proven effective in some other sectors, their success in hospitality hinges on their ability to address consumers’ key motivations – primarily financial savings. Our GO Technology report revealed that members-only pricing is the most appealing type of loyalty programme, favoured by nearly half of respondents. Points-based systems, cashback offers and deals on frequently purchased items also ranked highly.

 

However, barriers to adoption remain significant. Upfront membership costs, subscription commitments and perceived lack of value deter many potential participants. Operators must design schemes that are simple, transparent and directly aligned with guest expectations. This could include eliminating upfront costs or introducing flexible, opt-in programmes that demonstrate clear, immediate benefits.

 

No-shows continue to be a persistent issue for operators, and the recent rise to a record 14% no-show rate exacerbates the financial strain on operators already grappling with tight margins. Addressing no-shows is not just about mitigating financial loss; it’s also about maintaining customer trust and operational efficiency, both of which are integral to building long-term loyalty.

 

Fixing the issue is obviously easier said than done. However, operators can look to mitigate the issue by putting in place measures such as ensuring the cancellation process is as simple as possible (our insight shows that 30% of UK consumers say this would encourage them not to no-show without notifying the venue). More than a quarter (28%), meanwhile, said rewards and incentives for turning up would help, and 21% said the same of deposits.

 

Beyond loyalty schemes, personalised communication plays a pivotal role in keeping guests engaged. According to our GO Technology research, 90% of consumers are open to joining a loyalty programme, and 73% want to hear about deals and rewards from their favourite venues.

 

Email remains the most preferred communication channel, followed by social media and text messaging. Regardless of the chosen channel, personalisation is key. Segmenting audiences by demographics, preferences and behaviours allows operators to tailor their outreach. Younger consumers, for example, may respond well to frequent, visually engaging updates on social media, while older patrons might prefer concise emails highlighting value-driven offers.

 

Moreover, timing matters. While 30% of consumers welcome weekly communications, a slightly higher percentage prefer monthly updates. Striking the right balance ensures that communication feels relevant rather than intrusive.

 

While technology and data-driven strategies are crucial, they are not substitutes for the fundamentals of hospitality: exceptional food, drink, service and atmosphere. Poor experiences can quickly erode trust and loyalty, especially given the high expectations of today’s consumers. Operators need to continue to invest in staff training and quality control, to ensure guests consistently leave with positive impressions.

 

Loyalty in hospitality is no longer about simply retaining customers – it’s about creating advocates. By combining exceptional in-venue experiences with thoughtful, targeted communication and well-designed loyalty programmes, operators can nurture deeper connections with their guests.

 

To address challenges like high no-show rates and shifting consumer preferences, venues must adopt a proactive, flexible approach. This includes leveraging customer data to understand behaviours, tailoring offerings to meet diverse needs and fostering trust through transparency and value.

 

In an era where competition is fierce and spending power is limited, loyalty is hard-earned. However, by focusing on what truly matters to their guests, hospitality venues can turn fleeting visits into lasting relationships.

We’ve certainly had a tough journey in kitchens over the past five years. During lockdown, many of our chefs left the industry, with a significant number of them becoming delivery drivers. I even ended up in a taxi once, driven by an ex-head chef from a well-known local restaurant. It’s a sad reality, but that’s what happened. This, combined with the loss of a significant number of skilled European chefs following Brexit, created a real shortage of talent in the industry.

 

So, post-covid, we were just glad to fill the roles, and in truth, we probably trod a little softly with our chefs because we needed to keep them. As a result, we may not have enforced the habits we wanted, and costs started to drift.

 

The chef situation does seem to have eased somewhat, but our ability to recruit non-EU overseas chefs has been constrained due to the higher reward levels now required for recruitment. Overseas hiring now mainly works for the most senior chefs. Despite this, recruitment and retention appear to be getting easier, and, just as importantly, I believe this trend will continue over the next 12 months. More people are looking for jobs, fewer jobs are available, and I think (or at least hope) that we’ll find it easier to recruit over the coming year.

 

That said, we’ve probably allowed some kitchen habits to slip. Start and finish times might have become too lenient. I was in a restaurant last night that had just 12 covers for the evening but still had a pot wash and five chefs! Prep might not be as efficient as it could be, and straight shifts may have become the norm.

 

In short, there are a number of productivity opportunities we can take advantage of if we choose to address them. But, as we all know, changing kitchen habits is tough. Teams like to work the way they’ve always worked, and altering those habits requires time, effort, and most of all, patience. But this is probably the year to tackle it.

 

Our analysis shows that the opportunity in the kitchen amounts to at least 10% of hours worked. Slack hours are typically much higher in a kitchen, even though the timing of prep ought to mean they can be more efficient than front-of-house. Kitchen hours vary as a percentage but typically account for about 30% of total hours worked (and kitchen cost will be higher). So, if we save 10% of kitchen hours, that is a 3% saving in total hours, and potentially up to 4% of the cost base.

 

For our own businesses, this amounts to around £500 a week, or £25,000 a year. That’s a big enough number to warrant action, in my opinion. We’ve already started tackling many of these areas, and while changing habits is undoubtedly challenging, the process of change is happening – slowly, but surely.

 

In my view, kitchen habits need to be changed one at a time. Start with one easy habit and work through the change process at a pace that suits the team. But it’s important to make people realise that this is a continuous process, with breaks only for busy periods or significant changes in the team. If we focus on changing one habit each month for nine out of the 12 months, that means we can change nine key habits in a year and reach our target. The result will be a better-run kitchen and, more importantly, a happier one.

 

Why do I say happier? For several reasons. Being busy but not stressed is an enjoyable state for everyone. Being quiet and unproductive, on the other hand, is unfulfilling. While it may seem easier, it’s not rewarding at all. A slick kitchen team is one that takes pride in its work, creates a positive energy and fosters pride throughout the team. This is the environment we want to cultivate.

 

Kitchen efficiency can lead to great things. It can lead to a lower cost team, a happier team and, of course, make a major dent in offsetting the headwinds facing us this year. With more people looking to work and a growing number of young people eager to put the effort in, now is a great time to give it a go.