Whilst the recent four day Jubilee celebrations brought a welcomed increase in trade for many businesses in the hospitality sector – with Barclaycard reporting a 42% hike in consumer spending at restaurants compared to the same period last year – it was a very hard-earned slog for most within the industry, as staff shortages resulted in long, long hours, unattainable for any prolonged period, and with the holiday season now revving up, how can business owners tap into the increased voracity for socialising when faced with pressing challenges like recruitment?
Here are a few tips gathered from Cumbrian hospitality businesses:
1. Closure coordination
It’s a sad reality that in many areas there just aren’t the staff to go around and to avoid a ‘ghost town’ on specific days in the week, some restauranteurs are joining forces locally and regionally to coordinate closures to ensure that there are still venues open on any given day of the week. This helps protect reputational risk of local culture to ensure trade from the visitor economy – and local residents too – isn’t harmed by a reduction in area appeal.
2. Service Charges
Although ‘tipping’ has generally been a discretionary, but usually customary, option in most UK restaurants, adding a service charge to the bill which results in a direct uplift to staff pay is something that can provide an attractive perk when recruiting staff and might give a business owner the upper hand over competitors.
3. Avoid reducing room rates too soon
The upsurge in the attraction for foreign holidays left many UK accommodation providers feeling nervous as Covid restrictions fell away, and the nervousness led to some prematurely reducing room rates. However, the sudden crisis around airport capabilities to facilitate foreign travel has resulted firstly in many people stuck in the UK with annual leave to take and money in their pockets, and secondly, a potential resurgence of last year’s appetite for the ‘staycation’. With this in mind, being able to strategically operate depending on current conditions as part of business planning will allow UK operators to take advantage of this swing in literal direction.
4. Use data to invite returning customers
Whilst it’s tempting to rely on booking platforms to hold customer data, savvy operators are taking the opportunity to collect email addresses independently – with permission of course - enabling them to directly communicate with previous guests to encourage repeat business without the hefty fees of solely relying on booking services.
5. Change your menus quickly
The throw away menu has been commonplace in restaurants since covid reopening as a means of maintaining hygiene standards, however, it is also a useful way of ensuring you can quickly update your menu as prices fluctuate, allowing you to make swift changes in line with market forces and increasing costs.
6. Consider consolidating loans
For those who have taken CBILS or other loans to help with cashflow, now might be the time to consult with your accountant to consider consolidation or even fixing interest rates to provide some certainty over outgoings.
7. Check you’re getting the best deals
Armstrong Watson partner with a handy comparison provider called Reducer who can review energy costs and merchant services amongst other things to see whether there are better prices out there. With prices increasing so rapidly and good deals hard to find, there’s never been a better time to check you’re on the best tariffs.
These are just a few of the many options you can take to assist with the pressures of operating in the current environment. If you’d like to discuss cashflow management or business strategy for your hospitality business, please get in touch.
