If like me you are involved in the hospitality and leisure business, you could be forgiven for feeling that we have been dealt a pretty rough hand recently.
The last couple of years haven’t been great
After several years of double/triple-dip recession, the leisure industry has been severely constrained. Economic pressures on all segments of society have meant that pressure on the leisure pound has been extreme. That trend shows little sign of letting up.
Is it getting worse...or is it getting different?
The other day I had lunch at Marcus Wareing at the Berkeley in London and it was as splendid as ever. It has a calm civilised atmosphere that’s perfect for any kind of discussion and shows off the ravishing food to good effect. While the restaurant was pleasantly busy it was by no means full and the additional dining area was not in use. Lunch these days is apparently not quite what it was.
Lunch, anyone?
If you talk to a lot of restaurateurs these days, you’ll find that one question keeps recurring – “what’s happened to lunch?” The lunchtime trade across most segments seems to have significantly reduced.
Of course, lavish business lunches are something of a casualty of the financial crisis and all that has happened in the service sector. But it’s not just entertainment on expenses that has changed. So has the actual business of lunch. Was Gordon Gecko farsighted when he said “Lunch is for wimps”?
This phenomenon is not just something that’s happening at the top end of the industry. During the past year it’s been particularly visible as a trend in the middle market restaurants with which London is filled, and it particularly seems to have been affected by a change in the eating habits of workers.
Some of this was exacerbated by the government’s decision in summer 2012 to encourage their workers to take seven weeks off and work from home. The impact that this had on the Central London restaurant market was considerable, with reported drops in the period of between 25 and 40 per cent.
A lot of restaurant meals have been replaced by the various forms of ‘foddering’ that are now delivered by different market segments. Whether it’s the unstoppable rise of Subway, Upper Crust, M&S Food, Tesco Metro and Pret A Manger, everyone seems to be competing to supply food to be eaten on the hoof or at the desk. The whole business of sitting down in a restaurant for lunch has been constrained.
It’s not just lunch
There’s also been a significant growth in informal dining, whether because of tapas bars or ‘sharing plates’ or ‘grazing’. All of these trends strike at the heart of the traditional ‘formal occasion’ restaurant business.
As I was returning from lunch at the Berkeley, I went up Great Portland Street and was struck by the fact that a huge new Pret A Manger was being installed opposite an existing sandwich business. It seemed somehow symbolic that while restaurant openings in London are apparently at an all time high, the growth in informal food provision is moving ahead even more quickly. The lower to middle end of the restaurant business is being severely challenged by the omnipresent provision of fresh, wholesome, healthy options which suit desk workers, travellers and time-poor metropolitan residents very well indeed.
Self-help is the only answer
I think we’ve all experienced enough initiatives from above to realise that they mostly do not help individual businesses survive or thrive. Successive governments have for years demonstrated that they do not really understand tourism, hospitality or leisure consumers. We are on our own.
Look to the market
As always, a market-focused approach is going to work best. What does the market want, when do they want it and how can we most effectively supply it? Working out which customers are available and what they are looking for is relatively easy. It is a combination of observation and measurement, questionnaires and conversations. It is also a matter for careful statistical analysis.
Engage Brain, analyse, then plan
The first thing we must do is understand and measure the trends, calculate the impact on our own individual businesses and plan our own product offering and service delivery to match. Taking time to gather the facts and then adjust our own business offering to market changes will pay dividends. It’s not going to be easy but it is possible to adjust service times, service team structure and even the meal formatting offer itself to match the needs of the market.
Time for tea?
On my visit to the Berkeley, I noticed another interesting phenomenon. In between the Marcus Wareing restaurant and the lobby is a place that used to be called the Caramel Room; it was a place where people met, drank champagne, nibbled canapés and chatted. The Caramel Room is now almost the hottest ticket in the Berkeley. It is filled with tables set for afternoon tea with champagne and served from lunchtime onwards.
While Marcus Wareing was comfortably half full for lunch, the Caramel Room was absolutely rammed and had a waiting queue. It seems that ladies who used to lunch have taken to tea and the prices are quite eye-watering.
I thought I would check this trend out and discovered that the first booking for afternoon tea at the Ritz is 10.30a.m – and it’s full.
It seems that our market is changing and we have to catch up and keep pace. The business of hospitality is not over and it’s not really in crisis. It’s just undergoing another of those changes that occur more and more rapidly in our fast-moving, trend-driven world. What happens and works in London and other metropolitan centres will ripple out throughout our society.
To survive any market shift, we have to adapt to the new climate. Find out where the market’s going, put yourself in the right position and it will follow.
