Hospitality : Future trends

Economic prospects

The number of people working in the sector fell dramatically in 2009 due to the recession, but employment levels have since recovered.

Employment prospects on the whole are strong and it is predicted that over a million new employees will be required in the sector by 2017.

The demand for graduates is expected to grow as 69,000 more managers are expected to be needed over coming years.

Trends across the sector are mixed. The number of bar staff has declined by 30% since 2005 but the decline is slowing. The number of conference and exhibition managers has increased by 100% and is expected to continue growing, as is the number of hotel and accommodation managers.

Employment is expected to grow most quickly amongst budget operators such as fast-food outlets, takeaways and cafés.

A number of factors are still expected to limit growth in the short term, such as:

• rising costs, i.e. fuel, food and wages;
• a weak pound;
• new immigration controls, which will lead to an upward pressure on wages;
• delays in adjusting to the needs of an ageing population;
• the calibre of applicants in the sector is steadily rising, so qualifications and experience are becoming ever more important.

(Source: People 1st , 2010) 

Customer demand

The recession and the increasing use of the internet means customers have more sophisticated and critical shopping habits. Shopping around, buying cheaper brands, buying less and looking for ethical brands are all current patterns of customer shopping behaviour.

Skills shortages

In most of the UK, 4% of employers in the sector have roles that are difficult to fill, but in Scotland the number rises to 39%.

Two roles which are expected to remain in high demand are:

• skilled chefs (including Asian and Oriental chefs and senior chefs);
• managers.

Continuing skills gaps in the industry include:

• customer service;
• communication;
• multi-tasking;
• marketing and sales.

(Source: People 1st, 2010)

Corporate responsibility

The majority of large businesses within the industry advertise their commitment to environmental issues, their active involvement in the communities in which they operate and their charitable donations. Organisations are keen to demonstrate that they can further their business objectives while still ‘doing the right thing’.

Outsourcing

Increasing numbers of operators, including educational institutions, local authorities, healthcare providers and other businesses, have outsourced hospitality facilities in order to concentrate on their core business and drive down costs. This has presented huge opportunities for food service providers and contract caterers.

Fragmentation of hotel industry

There has been an increase in ‘no-frills’ and budget options, most notably within the hotel industry. Hotels are now classed as ‘business’ or ‘leisure’ hotels and there are almost two separate markets for ‘luxury’ and ‘budget’ hotels, with mid-market (mainly three-star and below) hotels falling between the two.

Alignment of pubs and restaurants

A ban on smoking in all enclosed public places came into force in Scotland in March 2006 and was introduced to England and Wales in July 2007. This continues to have an effect on the industry, most noticeably for pubs and bars. Pub food has become more important and is now challenging the restaurant industry. The growth of the ‘gastropub’ and the increase in the number of pubs offering cheaper food options has also increased competition across the sector. There has also been a move towards a coffee-shop culture, with pubs and bars serving more coffees.

Conferences

There has been a slight shift away from residential conferences to day conferences. Average rates showed a decline in the daily delegate rate for residential conferences but a marginal increase for non-residential. The conference and meetings market remains highly competitive but venues report a general tightening of budgets and a move towards shorter and smaller conferences. A key emerging trend is shorter lead booking times, with many venues indicating that this is now the norm.

Technology

A number of technological advances are changing the way the industry operates. Many of these innovations are designed to reduce staffing costs, increase productivity and offer customers a wider and more informed choice. Current developments include:

• a steady growth in the use of the internet to purchase goods and services;
• faster broadband technologies enabling a wider range of internet services;
• online booking and checking-in facilities;
• a growing use of user-generated content (UGC) websites such as Trip Advisor ;
• advances in mobile phone applications;
• database-mining techniques to find new customers;
• the use of social networking sites to find new customers.