Representatives of several local hospitality businesses, along with members of the WBC, joined us at the Regent Street Cinema for the launch of our latest initiative. SOPHIE SHRUBSOLE, chief executive of WBC, explains the rationale behind our new hospitality network and shares highlights and insights from the evening.
When it comes to hospitality, Westminster has everything. Michelin-star restaurants, massive hotel chains, independent hotels, cafes, bars and more. Our city has been, for a long time, the beating heart of London’s hospitality industry.
About 8,000 of the 50,000 businesses based in Westminster are connected to hospitality. Our aim is to make sure that the voices of those businesses are heard as one, so that we can grasp opportunities together – and tackle the many challenges the sector faces.
We plan to deliver exclusive networking opportunities, workshops and training sessions, as well as advocacy and support to ensure the voices of business owners and employees are heard by local and central government.
I was delighted to be joined on stage at the launch by two men with plenty to contribute to our discussion, and a lively Q&A session that followed.
TONY MATHARU, the founder of Integrity International Group, is a powerhouse in hospitality and beyond. He has founded numerous successful businesses and is keen to ensure London remains one of the best places to live and work.
SEAN DIXON is the Chief Revenue Officer of Fidelity Energy, who kindly sponsored the launch. He offered some fascinating energy insights, and practical tips for hard-pressed businesses looking to manage their costs.
‘I’ve never known anything like it’ – challenging times in hospitality
Tony spelled out graphically the range and severity of the challenges currently facing hospitality businesses. As he pointed out, this has always been a reasonably resilient trade, but recent years have thrown up particularly tricky obstacles.
Capital cities tend to be more resilient in a crisis. They go down a less steep curve, and emerge earlier. Covid-19, however, saw the opposite happen – because of the impact of lockdown on people’s ability to travel to and through the city – and London is still struggling with the after-effects.
This, along with the impact of Brexit, has been compounded by changes being introduced by the new Government, which Tony described as “very troubling”.
He said of the increase in, and change in thresholds of, National Insurance contributions: “This is an unwelcome imposition that was unjustified. I think it’s going to be a very, very big mistake, because it’s going to lead to inflationary pressures and job losses, none of which are stimuli for growth.”
On top of that, the change in relief for business rates is a “21st-century window tax” that will hit hotels, venues and restaurants particularly hard. Hospitality will also be affected as badly as farms by the controversial change in business property tax relief and its impact on inheritance tax.
This at a time when, according to World Travel & Tourism Council data, the UK ranks 113th out of 119 nations for price competitiveness, and second from last for projected growth over the next 10 years.
Tony suggested that in this context, a Government with a cabinet devoid of business experience is not helpful. He suggested: “If you don’t have that knowledge, engage with those people who do – then listen to them and get engaged in a positive way.”
Futureproofing your hospitality business
Tony’s advice for hospitality businesses looking to survive these difficult headwinds was to continue to invest, however difficult that may be. He added: “Establish good, strong relationships. If you take a transactional, short-term approach, you may not have a business in the end.”
With an enduring relationship, your suppliers and customers are better informed and, therefore, more understanding of your position.
Another key consideration is data management. “Having good data management systems that you can use to inform your decision making and direct your resources in a more efficient way is one of my most important hints for the future,” said Tony.
Global instability is a major concern
Over the last 20 years, senior figures in the hospitality sector would have named security as their biggest concern. Recent geo-political events mean, however, that there is a growing fear around a wider global instability.
No hospitality business can thrive in such an atmosphere, and Tony suggested national and global leaders should be more understanding of the impact of such a fearful situation.
As he put it: “Forging alliances and collaborations, and engaging in discourse, is so much better than the alternative, which is erecting walls instead of building bridges.”
How you can tackle your energy costs
Hospitality as a whole is a major consumer of energy – and the cost of that energy is one of the biggest headaches for businesses in the sector.
Sean suggested businesses should always analyse their energy data and use the results to decrease their usage. If your restaurant does not open on Mondays, for instance, why bother turning on the boiler on those days? It is surprising how many businesses are unaware of the flexibility at their fingertips – and a conversation with your energy supplier could deliver some quick wins.
Similarly, many businesses stay with their existing supplier for year after year. Sean proposed that you should always look around to see if there is a better deal available. As he put it: “Constantly reviewing the market is key… be continually scanning the horizon.”
Sustainability is a key focus for many hospitality businesses, but some fear that the environmentally friendly option will always cost more. That is not necessarily the case, said Sean, adding: “Sometimes the cheapest option is the greenest option.”
In those circumstances, doing the right thing by the planet can help to reduce your costs too.
Communication and collaboration will always be key in business; and the content of our discussion set the perfect tone for the community we hope to build through our hospitality network.
My thanks to Tony, Sean and all who joined us at the Regent Street Cinema for such a stimulating and thought-provoking evening. Please look out for news of further events and initiative as we build a strong network that ensures the voices of the hospitality sector in Westminster are heard loud and clear.
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