Hospitality remains resilient despite cost pressures

Speaking during a State of the Nation panel at MA Leaders in Glasgow last week, operators said the sector remained resilient, with operators adapting through experience led trading, tighter cost control and disciplined property decisions.

Sam Frankland, property director at Amber Taverns, said trade remained positive across the estate, although midweek trading continued to present challenges.

Experience economy

He said entertainment and experience were helping to bring customers into pubs for different reasons, while value remained central to their offer.

“We offer great value, we call it affordable treats,” he said. “We’ve just got to drag people from their homes, from their tablets, from the TV into the pub.”

Frankland said the business was focused on creating “great pubs in great locations”, with friendly teams and local relevance helping customers feel wanted.

Ben Warren, commercial director at Professionals at Play, said the group, which operates Roxy Ballroom, had grown alongside the competitive socialising market but still considered itself fundamentally bar led.

He said the business started with a large bar and a small number of games, before expanding into bigger sites and more varied formats.

Warren said customers were increasingly focused on whether an experience was worth their time, rather than whether it was simply cheap.

“You’ve got to make sure that when they leave, they leave satisfied,” he said. “Not that it has been cheap or expensive, but that it has been value.”

He added that while technology led formats such as tech darts had grown strongly, pool remained one of the most consistent games across the estate.

Shifting dayparts

Kenny Blair, co founder and chief executive of Buzzworks, said one of the biggest shifts in consumer behaviour had been earlier dining, particularly for food focused operators.

“Seven o’clock is the new eight o’clock,” he said, adding that the group was focused on maximising late afternoon and early evening sales while looking at ways to encourage later dining.

Blair said Buzzworks’ move into accommodation was partly a hedge against labour pressures. The group is using the term “pub restaurant rooms” rather than hotel, reflecting the importance of the food and drink offer beneath the rooms.

On cost pressures, Warren said Professionals at Play was now more focused on margins than top line revenue.

“It isn’t all about the top line revenue anymore,” he said. “You can drive the top line revenue, but that does not necessarily materially come down to EBITDA.”

He said supplier costs, team training and operational discipline were increasingly important, adding that challenging one supplier price delivered a quick £50,000 saving for the business.

Frankland said one of Amber’s biggest barriers to growth was dealing with local authorities, particularly in Scotland, where building warrants and licensing processes could delay openings.

He said the group was targeting 15 to 20 new sites, but remained highly selective.

“It is not a numbers game,” he said. “It is about a great pub, great location.”

Blair said Buzzworks was seeing a strong flow of property opportunities, particularly in regional and tourism driven markets. He said former retail units could offer potential for conversion into hospitality venues, but warned rates increases remained a major concern.

Warren said Professionals at Play was also finding opportunities in non traditional sites, including former retail units, gyms, basements and upper floor spaces.

On VAT, Blair said a reduction would make a “massive difference” and would feed through to the consumer over time, while Warren said it would drive growth and confidence, potentially allowing operators to consider more ambitious sites.

Closing the session, Blair said hospitality remained a resilient industry, with operators continuing to turn around difficult properties and create value in challenging markets.