Overcoming the latest challenges in retail and hospitality
While several sectors are undergoing significant change, many may argue none more so than the retail and hospitality industry. So what are some of the biggest challenges affecting retail and hospitality businesses, and how can they be overcome?
Lack of direction regarding Brexit is making it difficult for many retail and hospitality businesses to know exactly how they will be affected. But as the prospect of a ‘no deal’ looms larger, businesses need to assess any potential financial, sourcing and staffing problems and draw up backup procedures. These include knowing where and how to secure stock and supplies in the event of a disorderly Brexit for businesses that currently deal with European suppliers or supply chains which may pass through Europe, as well as a longer-term plan to incentivise local or commonwealth jobseekers for those that currently rely on staffing from the EU. Even measures such as invoicing as soon as possible can help boost cashflow to keep your business healthy in the event of any delays, while promoting the benefits of a staycation can help keep visitor numbers up for hotels that may be seeing numbers of European bookings dwindle in the run-up to summer.
Marrying consumer expectation with point of difference
While the good news is UK consumer spending on hospitality services has increased year on year since 2009 http://www.statista.com/statistics/476625/restaurant-and-hotels-consumer-spending-uk, in the wake of this increased competition from upcoming businesses, there’s an increasing need for hospitality businesses to set themselves apart. However, consumer expectation for quality and added value must be borne in mind when offering something different from competitors, such as an on-site workout space, late check-in, remote ordering or free high-speed WiFi, as well as modern décor and conveniences.
Staff turnover and retention costs
The hospitality industry has almost double the turnover of other industries, and at the recent Annual Hotel Conference’s Regional Roundtable, it was suggested that replacing just one member of the team could cost between £5,000 and £7,000 http://www.hotelmanagement.net/operate/ahc-regional-roundtable-examines-challenges-facing-u-k-hotels. Part of this has also been explained by the rise of independent, boutique hotels and restaurants, with many staff more keen on exploring those companies where they feel they may feel listened to and enjoy more upward mobility than with bigger companies. Recent research also cites salary, career progression and training opportunities http://www.bighospitality.co.uk/Article/2013/07/10/How-to-retain-staff-in-hotels-restaurants-pubs as some of the best means through which you can boost retention, so simply implementing a performance-related bonus scheme or offering training and certification for new recruits can help inspire loyalty.
Direct ordering and customer retention
With the unstoppable rise of Google and third-party reservation sites, it feels as though the major internet players have carved out a centralised online booking and shopping space. And it’s no wonder, since online travel agents have increased their market share by 40% over the last six years http://hoteltechnologynews.com/2019/03/hospitality-digital-technology-challenges-priorities-and-buzzwords/. While third-party sites have their perks, it’s also important to offer loyal customers incentives to order (and reorder) directly through you for a better deal, which in turn helps you retain your vital customer data and more money from your sale. Having a mobile-optimised website, direct online shopping or booking option and a digital marketing plan will help you earn greater traffic and conversions. Likewise, implementing a customer relationship management system will help you communicate with previous customers to turn them into repeat buyers, as can upselling to customers once on-site to collect their order or complete their booking.
The latest tech advancements
Technology has overhauled the retail and hospitality industry. From VR, which allows customers to sample clothing, new products for the home or a number of experiences at a fraction of the cost, to the rise of the Internet of Things, voice search and AI. So how do you get involved to future-proof your business? For those with a larger budget, it could mean offering something as cutting-edge as virtual tours of rooms, premises or dining experiences, as well as smart hotel or changing rooms equipped with Bluetooth technology, or the ability to order food from a device or app. However, even just investing in 360-degree images or videos of products and suites can boost bookings, while employing a chatbot on your site or implementing virtual check-in can help free up customer service staff.
HMRC has been keen to ensure more accurate accounting from businesses with their implementation of Making Tax Digital. While the deadline for VAT-registered businesses to start keeping digital records and signing up to MTD was April 1st (or October 1st 2019 for some more complex cases), it’s not something to do once and forget. Continuing to invest in your accounting needs so that you can accurately forecast and plan for future growth is vital to stay ahead of the latest challenges the hospitality industry is facing, whether it is monitoring changes in supply prices, the cost of recruitment, carrying out asset and investment analysis to facilitate expansion, or simply ensuring you’re recouping funds as quickly as possible. If you need more advice, you can speak to a member of the team at Virgate Accounts.