The eight hundred or so hospitality professionals who attended last month's British Hospitality Association annual lunch at London's Grosvenor House Hotel were left in no doubt that a faltering economy and rising energy and food prices mean the industry is in for a rocky ride this year and next.
CBI Director General, Richard Lambert warned guests that there would be tough times ahead for hospitality. And BHA supremo, Bob Cotton said that food inflation was driving up prices and squeezing margins "more than ever before".
And yet, when Lambert conducted a straw poll of the audience to find out how many of them had noticed a discernible decline in trade, there can have been no more than five hands up in the whole room.
"They're feeling it but they're all too scared to admit it", said one of those hands after the event, adding that he had seen a noticeable trend in diners downgrading to house wine rather than splashing out on something pricier.
Last week, I blogged about the Isle of Eriska hotel's experience of a guest cancelling a trip up to Scotland on the basis that the fuel bill would be too costly. Is trade flourishing in your hotel or restaurant? Or do you have any similar stories of lessening spend - and if so, are you prepared to admit to them?
Comments (4)
Those who attend the annual lunch at the Grosvenor are a self selecting group of those who are happy to pay over the odds for another 'free' lunch at their shareholders' expense. That doesn't strike me as a group who would be feeling much pain. I've been talking to neighbours in the West End. The figure of 30% has been mentioned a few times. Maybe you'd be better asking wine merchants, butchers and the guys at New Covent Garden. They might give a fairer assessment of the health of our industry. They also see their debtors ledger. That speaks volumes.
Posted by Mike Prince | July 4, 2008 4:21 PM
Posted on July 4, 2008 16:21
Mike, thanks for the comment. I don't think the people at the BHA lunch were immune to feeling the pinch from the credit crunch and food inflation - I just think they didnlt want to 'fess up in front of their industry peers. When you say 30%, do you mean a 30% drop in revenues?
Posted by Mark Lewis | July 7, 2008 3:14 PM
Posted on July 7, 2008 15:14
When asked if they had noticed a decline in trade I believe the majority were honest in their answer. Had the question been "do you anticipate trouble ahead?" it would probably have got a different reaction. On Mr Prince's other point I would like to comment that most of the 900 guests at the BHA lunch are extremely busy hoteliers and caterers who attend these functions purely to show support and solidarity with a trade association that fights for the interests of everyone in hospitality.
Posted by Peter Hancock | July 9, 2008 1:59 PM
Posted on July 9, 2008 13:59
The hospitality industry is going to slow as gas prices go up and not as many people travel. There are many industries that are going to struggle as the economy.
Posted by hospitality furniture | August 6, 2008 5:53 PM
Posted on August 6, 2008 17:53