2014 was a reasonable year for the hotel and leisure industry. Overall, the sector has enjoyed steady growth and a small increase in the volume of mergers and acquisitions, while on the downside, costs have been creeping up, putting further pressure on margins. Evolving technology has been a major factor in driving innovation, while changing customer preferences continue to keep the industry on its toes.
In the restaurant sector, rising food costs have been placing ever greater pressure on margins. And although customer numbers are up for the year, price remains a critical factor, and many restaurants are unwilling to pass on rising costs to their customers. A steady escalation in customer expectations has added to the pressure, as owners are wary of disappointing customers who are active on social media. Gas and electricity prices have been riding a rollercoaster over the past 12 months, and whilst they’re now on a downhill section of track, their inherent instability makes accurate forecasting difficult and poses a significant challenge for all businesses in the sector.
The growth in online booking and development of online portals continue to drive new business. The use of social media by customers critiquing hotels and restaurants presents an opportunity for high service establishments, yet the channel can be open to abuse. So the industry needs to respond accordingly – both in terms of delivering customer satisfaction and in adopting transparent pricing policies. Operationally, there’s evidence to suggest that customers increasingly expect access to the kind of technologies they use at home, which can require significant investment. And with the pace of technological change so rapid, return on that investment has to be achieved very quickly.
It’s clear that many of the foundations of the traditional business model are changing, and companies must have the agility and flexibility to innovate their way to success. This frequently means working closely with specialist hospitality head-hunters to identify and attract new talent.
An uneven playing field?
For every overseas visitor to the UK, more than two UK citizens holiday abroad, and it’s not just the sunshine that draws them away, but some very attractive pricing too. Part of the reason for this is the different tax liabilities facing hoteliers here and across Europe. With just 6% tax levied on hotels and tourist attractions in Portugal, their leisure industry is well-placed to offer compelling prices, and it’s a similar story in Spain, France and Germany.
There’s no doubt that the UK’s hospitality and leisure industry today faces many challenges, but the outlook on the whole is very good. The UK continues to attract a growing number of tourists, particularly from the increasingly wealthy middle classes in emerging economies. These new tourists arrive with very high expectations, and the industry must rise to the challenge in meeting or exceeding those expectations. And to achieve this profitably, hospitality firms must attract and retain the brightest talent in the marketplace. Stone Executive is a specialist hospitality executive search firm. Our experienced hospitality head-hunters work with global brands, niche providers and many of the most respected executives in the business. As a well-respected hospitality executive recruitment firm, we have an enviable track-record of meeting diverse assignments and delivering value for all our clients and candidates.
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