What the papers say
By Tim Rumney, 09 December 2010 –
This week I have been asked to be guest editor for my-hospitality.com. Here are my thoughts on the main stories...
This week’s guest editor is Tim Rumney, a Director of Interchange & Consort Hotels (parent company of Best Western GB) and Managing Director of the Best Western Castle Green Hotel in Kendal
Three stories come together this week that give a fascinating insight into where our industry is at the moment, and the common themes throughout all of them are Quality, Price and Demand.
Hoteliers are of course very reluctant to put up prices at the moment, even with a 2.5% increase in VAT looming. Pricing must reflect demand for services and weak demand will make hoteliers reluctant to put up prices. The days of rack rate for accommodation and room hire are long gone and pricing is now based on product, competition, what the client will pay, and good negotiation. Each business needs to make its own commercial decision on pricing based on all the pressures that are bearing down at the moment.
There won’t be a standard response to the VAT increase. However, food and beverage is the area that some businesses will look to pass the increase directly on to the customer - but this needs careful handling. They must be wary not to get into the vicious cycle of food discounting because even though it’s true that consumers are looking for deals more than ever, discounting is not necessarily the only answer.
Food service operators must be innovative and offers are here to stay, but ultimately what’s important is quality. Recognised up market brands provide successful offers, look at the M&S meal deal, but the majority of consumers will not move to an inferior brand even is it is half price.
Competition is good but as an industry we must be careful that price cutting amongst competitors does not happen at the expense of long term investment. If it does, the customer will just end up losing out further down the line.
As if to prove that price is not always everything, we see the welcome news of the prospect of funding for the Foodlink Northwest local food project. Evidence of the surge in interest in locally sourced food is all around us – farmers markets, food miles on menus and successful local suppliers. But it needs support.
The influence of the supermarkets is massive and if we are to see the interest in local food translate into real customer choice, increasing market share and ultimately producing a more diverse and beneficial food culture, we need to encourage this initiative as much as possible. After all, the North West has so much to offer when it comes to wonderful local foods!
We look enviously to the food culture of France and Italy and we cannot recreate all of what we have lost overnight. We may however have stopped the rot before we completely inherited the dangers of US food consumerism. Food is such a huge part of our lives and we must put the effort into nurturing the benefits it can bring for our health, culture and enjoyment.
We have a great opportunity here, let’s get behind it.