The 2018 hospitality survival kit – how to tackle the year’s 5 biggest challenges

One major restaurant owner recently warned that challenges are aligning against the UK industry in 2018 in a way they never have before.

For him – and many others – that includes higher rates, food costs, and wages.

In fact, he argues that the UK hospitality industry is facing ‘the perfect storm’ of challenges  – and if there was ever a year when only the strong survive, this will be it.

Whatever the size of your business, there’s no doubt times are tough. 2017 certainly saw some big-name closures making headlines.

Yet as technology providers to the UK industry, we’ve also seen many exciting openings and new concepts developing over the past three years.

To celebrate the strength and innovation in the industry, we are Gold Sponsors of the Restaurant Association’s 50th birthday celebrations this year – and I’ve been looking at the biggest challenges the industry faces and how to overcome them.

I believe they are:

  1. Rising food prices
  2. Staffing shortages
  3. Well-informed customers
  4. Property costs

Here’s how the best hospitality businesses are tackling them successfully – with the help of technology.

  1. Rising food prices

Thanks to inflation and the effects of Brexit pushing down the value of the pound, food prices have soared, particularly in some areas including butter and seafood.

One food price index reported inflation at its highest in August at almost 10%, and although food and beverage inflation is expected to drop back to around 3.5% in 2018, it’s still a steep addition to the bills.

Hospitality providers are naturally reluctant to pass on the extra cost through menu rises. So it’s fair to say that well-informed procurement and a focus on waste reduction are the best method to tackle this major threat to your profits.

Growing steak-house brand Gaucho/CAU uses Aloha electronic point of sale (EPOS) technology from NFS across their group, and Estates and Property manager Colin Williams says: “EPOS is amazing for stock control – one of our biggest challenges.”

EPOS captures detailed data about what’s selling and what’s not, even identifying trends, and provides comprehensive reports that slash waste and make informed procurement decisions easy.

So when butter and seafood are becoming expensive, you genuinely know how much to order.

  1. Staffing shortages

That brings us onto another cost issue that was always tricky, but which has become a real hot potato since the UK voted to leave the EU.

A KPMG report noted that the UK hospitality industry is highly reliant on EU workers. Official figures say 12.3% of employees from Europe, but the report suggests it might be as high as a quarter.

With Brexit biting, the flow of workers from the EU is drying up. So it’s even harder than usual to get good staff, and chances are you need to pay them more.

The labour wage bill can be crippling. Luckily, this is another area where technology can help, by improving your rota and helping you avoid overpaying for labour in down time by providing a clear view of the busy and quiet periods in your establishment.

By providing a clear view of the busy and quiet periods in your establishment – or establishments – the technology enables efficient labour control, making sure you have the right number of staff on at the right time.

  1. Well-informed customers

Customers now have vast choice, and their dining habits are also changing. They are trying different experiences, and want to engage with restaurants online.

But with online reviews playing a huge part in decision-making, the customer engagement platform of choice is the smartphone app. It’s perfect for alerts on special offers and for getting feedback, and also enables customers to manage their own loyalty account.

Savvy organisations use their technology to safely capture data about their guests that allows them to provide the highly-personalised service that makes them feel special and create loyalty programmes that work.

  1. Property costs

Business rates have risen extraordinarily recently, and coupled with a national rise in commercial rents are hitting hospitality businesses hard.

Technology can’t keep down these expenses, of course. But with its advanced data capture and up-to-the-minute reporting, technology can provide an end-to-end view of your establishments’ performance, as well as streamlining operations to save costs.

  1. Competition

Many places have seen a large increase in the number of bars, restaurants and hotels in recent years – and as the Deliveroo/Just Eat style of delivery service gains even further ground, it’s getting harder and harder for restaurants to grab custom.

Many restaurants are considering providing convenient ways of online ordering and delivery without using Deliveroo. Technology means they can engage customers and enable them to order and collect food without using an intermediary.

A great guest experience, of course, will always be a winner for restaurants. As well streamlining operations, elements of EPOS create customer service enhancements – tableside ordering and payment-taking, for instance, that speed up the customer experience.

The overall result? Guests feel treasured, and are all the more likely to return and post good reviews. And from the restaurateur’s point of view, efficient service means increased table turns.

So that’s a win all round.

And if a ‘perfect storm’ of challenges really is on the way in 2018 it’s definitely the right time for every restaurant, bar and hotel in the UK to check how efficiently their operations are running – and reach for the hospitality survival kit.

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