see all jobs
Cutting costs and keeping customer value
What are we to believe when government talks of the help it is giving to the industry?
Businesses are trying to survive in the steepest recession the country has seen for decades but overdraft facilities (very important for a seasonal industry like tourism and hospitality), if available, are becoming ever more demanding and costly. The only bright spot on the economic horizon for the industry is the declining value of the pound. This might encourage more overseas visitors to this country and discourage Britons from travelling abroad but it does nothing for the cost of imported goods like food and energy - the two items that have caused the greatest concern in 2008.
At the same time we have the government and its various agencies pressing ahead with regulations that cost UK businesses billions of pounds every year to interpret and implement. This is a seemingly never-ending pipeline. Whatever benefit they bring, one thing is certain: they all cost money. For the hospitality industry, preventing the minimum wage being augmented with revenues from the discretionary service charge will lead to many employees paying more through previously exempt National Insurance payments - and businesses will pay NI more, too. Salary costs will also increase in April when the new minimum statutory holiday entitlement rises from 24 days for a five-day-a week employee to 28 days.
The proposed new mandatory code of practice for liquor sales and pubs includes - among other silly ideas - a regulation that bans the 250ml glass. Restaurants will have to provide a 125ml lined measured glass as the 'normative' measure and thus spend thousands of pounds buying complete new sets of glasses. The Food Standards Agency is currently (and incomprehensibly) pushing ahead with a complicated and confusing six-tier Score on the Doors rating scheme - an option that had not even featured in the FSA's consultation document. We also have possible food labelling legislation from the EU requiring nutrition and allergen information to be made available in restaurants.
In the longer term, there are now suggestions that government regulations might eventually be introduced to force food manufacturers to limit the amount of fat, sugar and salt in their products. As this would inevitably extend to restaurants and other food providers there is clearly no foreseeable let-up in the cascade of legislation that will continue to pour over the industry. With consumer spending under such pressure, hospitality businesses will only survive by retaining customer value; at the same time, they have to cut costs to the bone. Government does not appear to recognise (or ignores the fact) that new regulations cost money to implement. Industry has to pick up the bill. So it's not surprising that hospitality businesses are asking a simple question: where is the government's much publicised support? The answer is: It's just not there. Only cost is evident.
More News
- News by sector (all)
- All news
- Fitness
- Personal trainer
- Sport
- Spa
- Swimming
- Hospitality
- Entertainment & Gaming
- Commercial Leisure
- Property
- Architecture
- Design
- Tourism
- Travel
- Attractions
- Theme & Water Parks
- Arts & Culture
- Heritage & Museums
- Parks & Countryside
- Sales & Marketing
- Public Sector
- Training
- People
- Executive
- Apprenticeships
- Suppliers