The message from the opening morning of this year’s HOSPACE was that things were looking pretty chipper in the sector, no matter what you might read.
Of course one would never read such things here, but not everyone in the media seems to have got the message and the danger is that, with consumer confidence still feeling vulnerable, it could be emotions ahoy if there are too many negative headlines.
Mark Edwards, partner, BDO, elaborated on this, telling delegates: “People should be feeling positive, but it doesn’t always come across like that. While I totally understand that the Budget hasn’t helped our sector, it’s also critical that we don’t allow the story of challenging times to impact the consumer’s psyche. If employees hear that jobs and hours are at risk, it’s harder to convince them to take a career in the sector.”
The data folk pointed to the much-trailed ‘new normal’, with Michael Grove, CEO, Hotstats, commenting: “We are going back to pre-pandemic growth and the big challenge is all about the cost lines. We need to be able to drive revenue to offset that. Ancillary revenues are growing (up 8.1% for wellness, 3.4% restaurant food, 6.3% bar food) but smaller than what is needed to offset cost increases, but this has been aided by events growth, which influences profitability.”
Peter Heath, founder, Venue Performance, added: “The general trend for meetings and events is up. Revenue per delegate is going up, lead time - which was causing chaos at properties - is lengthening out, which is a sign of confidence from planners and bookers.
“It’s looking very positive, the large events have been affected by the Budget and the General Election, but overall meetings are growing and the market is stabilising, which is what we want for big-ticket spending.”
Looking at the bigger picture, Thomas Pugh, economist, RSM UK, said: “Household income has grown in the first half of the year, but consumers haven’t been spending it. If you’re in an industry which relies on that, it doesn’t look that great. Spending has been on food, housing, health, education. Even though GDP is good, the sector isn’t feeling the benefit. Households are still saving a fortune.
“There should be a sugar rush of spending next year, but there will also be an increase in inflation. Put those two things together and interest rates will fall more slowly. Base case is that we don’t get a rate cut in December, we get one a quarter next year. By 2025, they are 3.75%, they probably settle around 3%. Inflation is below 2% now, it will get back to 3% by the end of the year and bobble around 2.5% next year. That’s unhelpful, but we’re not going back to the cost of living crisis.”
All this means a constant grind of stress for leaders. To return to Edwards and the issues of attracting and retaining, he pointed out that, looking forward, the sector was likely to see a “change in strategies and change in leadership” after years of stress fail to abate.
While no one wants to see stress around the board level, fresh approaches might be just what we need to revitalise the sector and bring back some of that positive thinking. And not just for headhunters.
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