Most hospitality workers in the UK appear to be calm about automation taking on tasks in their sector. A recent study from YouGov, conducted for SafetyCulture, found that 76% of employees showed no concern about technology affecting their roles. Only 28% said they had any reservations about artificial intelligence and other tools being introduced to their workplaces, suggesting that many see it as something useful.
There is a difference across age groups. Gen Z and millennial employees are more cautious than older employees. 25% of Gen Z workers and 24% of millennials aren’t confident about automation, and for boomers, only 10%. This could mean that younger staff, who may be earlier in their careers, feel more exposed to the changes that technology could bring.
Can Technology Help Ease Staff Shortages?
Staff shortages continue to cause problems across the hospitality sector, and technology is seen as a possible solution to this issue. About 63% of workers believe shortages will be a serious problem, with 42% already seeing the effects. With businesses struggling to fill vacancies, many are turning to automation as a way to manage these gaps.
The same report found dissatisfaction among workers with the tools and equipment currently in use. 53% of those surveyed said they were unhappy with the systems they have at work, and 46% described the tools as outdated.
How Are Sales Performing Across the Sector?
The CGA Hospitality Business Tracker recorded a 1.7% increase in sales during September, which shows steady progress through 2024. Restaurants performed well, with sales rising by 3.2%, while bars continued to struggle, experiencing a drop of 3.8%. The weather played a part in this, with rain encouraging more people to eat indoors rather than visiting pubs and outdoor venues.
London’s hospitality sector saw a bit of a slower growth rate compared to other regions. While venues in the capital recorded a 1.3% increase, those outside the M25 experienced stronger growth, with a 1.9% rise.
What Are Hospitality Businesses Preparing for This Year?
Deloitte’s latest survey shows that optimism within the hotel sector is still high, though confidence is softer compared to last year. Many hotel operators expect to see moderate growth in Revenue Per Available Room during 2025.
The hospitality industry is preparing for a busy festive season alongside legal and financial adjustments. New tipping legislation, changes from the Employment Rights Bill, and higher minimum wages are expected to increase costs. Businesses are now focusing on staying competitive while managing these shifts during one of the most critical trading periods of the year.
How To Run A Hospitality Startup
Experts in the industry have shared different tips and considerations for those who are interested in running a startup in the hospitality industry. Their insights are very interesting, and here’s what they’ve shared:
Our Experts:
- Jessica Gillingham, CEO and Founder, Abode Worldwide
- Mike Ferguson, Vice President, Global Services & General Manager EMEA, Redpoint Global
- Rick Smith, Managing Director, Forbes Burton
- Mark Beyer, Founder, Mybey Ventures
- Shelley Grieshop, Creative Writer/Marketing, Totally Promotional
- Matthew Vohs, CEO, O50C
- Salar Sheik, Founder, Savory Hospitality Restaurant Consulting
Jessica Gillingham, CEO and Founder, Abode Worldwide
“When caught in the weeds of launching a start-up, not many founders think strategically about their long-term brand, but it can be a key differentiator. Companies that invest in their public relations early on are able to intentionally build their brand name so that it grows with them. This will attract clients, but also investors. PR is difficult to nail, but when done well, it’s a shortcut on the path from start-up to successful business.”
Mike Ferguson, Vice President, Global Services & General Manager EMEA, Redpoint Global
“An important point to note for hospitality start-ups is to not put too much stock in “expert predictions” when it comes to determining strategy. It’s not because no one knows what tomorrow holds, but rather it’s because your customer base – not external experts – is the best source of performance predictions. They are the source of truth.
“While it is true that we never really know what tomorrow holds, by having a deeply personal understanding of your customers – which ones are price sensitive, which are most loyal, which visit occasionally, which are brand ambassadors – you can predict with a fair amount of certainty how your customers will behave. You will know what they will respond to, what actions they are likely to take, and what type of experience to provide that will increase loyalty and satisfaction.
“Customer data holds these secrets, and unlocking those secrets is the purpose of a Customer 360, a single, unified view of a customer. Building a precise, real time Customer 360 is a core function of a customer data platform (CDP). Done correctly, the Customer 360 is a single source of truth about your customers.
“With full identity and contact graphs, behaviours, preferences and other attributes, and data from every available source (online travel agent data, etc.) it is a full, real-time representation of a customer. And when data quality, advanced identity resolution and persistent key management are key steps in the creation of the unified profile, it provides a hotel with a contextual understanding of a customer over time.
“This is a key capability that allows the brand to understand, for example, whether a customer using a business account is the same customer who may at times use a personal account, or if the person who made the reservation is the actual guest. Referred to as “householding,” this capability unravels the complexity of guest/booker relationships and allows the hotel to fully know an individual, however the individual presents him or herself as a customer.
“By knowing everything there is to know about a customer, and thus your customer base, a brand is empowered to enhance the customer experience and is also able to analyze each group’s behaviors and sensitivity to seasonal and economic changes. Customer data that is cleansed and made ready for business use with the creation of a Customer 360 is the best tool available to forecast the wants and needs of your guests.”
Rick Smith, Managing Director, Forbes Burton
“The hospitality sector has long struggled with an annoying quirk in VAT laws that sees those that prepare food unable to claim back anywhere near as much VAT as they pay out.
“In general, uncooked food is VAT exempt, but as soon as it’s cooked or prepared, it becomes standard rated. This sees many businesses in the sector paying out more than 20% of their sales in tax, without having the option to claim back VAT from their necessary purchases.
“Add to this the high utility bills that hospitality businesses have to contend with from heating, lighting, and sometimes cooking, and you can see how hospitality has been one of the highest-risk sectors for insolvency in recent years. Worse still, an increase in prices to offset these costs is ill-advised while many customers still battle with the cost-of-living-crisis themselves.
“All in all, it’s a brave entrepreneur that tackles the hospitality sector right now, but there’s still room for new and innovative businesses that can buck the trend.”
Mark Beyer, Founder, Mybey Ventures
Focus on Building Client Relationships
Building trust and a reputation for meeting client needs is one of the key foundations of success for any hospitality startup. Trust is often built by communicating effectively and promptly, meeting or exceeding client expectations, expressing a strong understanding of client needs and goals, and promoting extensive collaborations.
Build A Strong and Talented Team
Success with a hospitality start-up is a collective effort where each team member plays a critical role in meeting client needs. As such, focus on finding talented and driven people who share in your vision and that of your clients.
Pick A scalable Niche
It’s also important to narrow down your area of focus, Hospitality is such a broad area, and specializing in a unique niche where you can scale and grow is highly recommended. Your chosen niche should however be aligned with your core competencies as a hospitality professional. This will allow you to deliver more value to your clients.
Shelley Grieshop, Creative Writer/Marketing, Totally Promotional
“Establishing and maintaining brand recognition should be a top goal, especially for newbies in the hospitality business. Create a logo that aligns with your company culture and style and use multiple marketing methods to expose it to your target audience. Social media is one of the best tools for achieving brand recognition.
“I also recommend using promotional giveaways printed with your logo such as magnets, luggage tags, snacks and hand sanitiser. Simply placing your name and logo on paper coffee cups in your lobby can help promote your brand and create authority and trust in your business.”
Matthew Vohs, CEO, O50C
“To be able to open up a new business in hospitality, one of the most important things to have is a great team who will become the face of your new business. It’s so important for any new startup to take time in their hiring process to make sure they have a team of experienced and enthusiastic colleagues to take on a new role.
“Firstly, startups need to be open with their hiring process and ensure they hire an age diverse team so they have a well experienced group of people in the beginning of setting up their business.
“It can be hard to manage everything, from marketing to preparing a property for your business, so having a team that is reliable is so valuable. Many employers may look to hire younger employees for a job role in hospitality and not consider an older workforce, so by including both the younger and older generation when hiring will be beneficial in having experienced individuals who are able to mentor and guide the younger and less experienced members of the team. Having a well balanced team with a mix of ages and experiences means you’ll have colleagues who are ready to face different challenges.
“One of the key suggestions for any new hospitality business in their startup phase is to look out for candidates with transferable skills. The hospitality industry tends to be fast-paced and requires customer facing roles, so it is imperative for the employer to find candidates for their business who are able to use the right techniques to resolve any conflicts, to be able to listen to customers and anticipate their needs, and having the ability to multitask during busy periods, these are just a few great transferable skills.
“By fostering an age-diverse workforce, hospitality businesses can create a rich environment where skills and experiences are shared freely. The older generation are able to share their knowledge in the industry with younger colleagues which helps to create a stronger team leading to better service, happier employees, and ultimately, a more successful business.”
Salar Sheik, Founder, Savory Hospitality Restaurant Consulting
Many types of people become restaurateurs, from the everyday person working the 9 to 5, to chefs, celebrities, retirees, or business developers. Some are willing to learn the ropes, while others are willing to invest in someone’s expertise to aid them in becoming the restaurateur they envision. The rush to success for many lies in multiple reasons from profit, passion, or a status symbol of their achievement. No matter who you are, however, there are a few things you should know before you start writing checks and cutting ribbons.
1. Don’t think one size fits all.
Just because you think everyone loves gourmet burgers doesn’t mean all burger restaurants are going to fill the seats and your bank account. Can you say that your restaurant vision has two items or qualities that stand out from the others? Restaurants need a niche to make them stand out. You may then ask, “What is that niche?” Think about what you envision: Is it quality, value, speed, ambiance, or location?
Look at how many car makes there are and how many models of cars you can choose from one maker. You know before reading the price tag that this car maker is known for its value, reliability, comfort, or luxurious options. Similarly, a restaurant needs an identity that is unique but familiar at the same time.
Yes, some out-of-the-box restaurants do become successful, but they still have one or two familiar qualities. If you can recall, sushi was far from popular in the ’90s, but now everyone from around the world from any age bracket knows what a California roll is. Sushi restaurateurs knew they had to develop an item that was unique but familiar, so they looked around and found crab and avocado and then added their unique sushi style, which is now mainstream and accepted by the masses.
2. Develop a business plan beyond a template.
You can find many templates of business plans and pro formas online, but an honest viewpoint of cash flow and speed bumps is needed if you plan on being around longer than a year or two. Even if you have been on the worker or management side of a thriving restaurant, you many not be aware of many other items that need to be taken in consideration such as, state tax, payroll tax, or the types of insurance from liability to workers comp. The best thing to do is seek a CPA and restaurant consultant with a proven track record of successfully opening restaurants that last longer than your IKEA chair.
Marketing is a must in your business plan. Take the time to research other restaurants that market in the area and how they attract customers. Social media will have to play a role in your business plan. Executing a successful social media marketing plan has to be more than just an iPhone for every manager to Snapchat or Instagram your special of the day. Social media has changed the face of restaurant marketing and setting a budget for outsourcing it will be money well spent.
3. Know the back office side of it.
The back office for many of the restaurateurs I work with has been a long learning process that some grow to love or just end up hating. The more you know now, the less time you will spend on the speed bumps of trial and error. Here are some key points to know:
Human Resources
It is more than likely you will have more than one employee, and with staffing, there are a ton of new laws and regulations you need to know. Some overlooked items in HR might cost you big in the long run. Many well-known restaurateurs have failed because they failed to invest or learn about HR issues. It can be something as simple as not having an updated write-up policy that might cause a lawsuit followed by a bankruptcy. There are many classes and resources to educate you on the topic. Just take your time and ask a lot of questions to people that have experience in this field.
Accounting
A CPA will help to place numbers on the table, but you will still need to understand basic accounting and what numbers fit and what they mean. Knowing what food and beverage costs are inline for your type of restaurant is the key to growth, including how you will be able to collect this data though inventory management. A QSR will have a much different number than a fine-dine restaurant with valet parking. Knowing a daily number that will be needed to break even should not be overlooked, as sales most likely will be inconsistent at different times during the year depending on your location and a break-even point must always be known for adjustments to be made.
4. Understand your role, duty, and lifestyle.
What your role is as a restaurateur is important, as many duties need to be assigned to you or management. Some restaurateurs like to take a backseat approach and seek answers from their management and weekly or monthly reports. Others like to take a hands-on approach and work the floor and sometimes the kitchen, building rapport and work relationships with their staff and management. Just remember that you’re the leader and micromanaging is like a dog chasing its tail. Building a strong management team is a must if you want to take a day or week off. The staff and management need to know they have your trust with a watchful eye.
One of the first questions I ask a new restaurateur is, “Do you have a family and do you know the time you will need to invest in your restaurant?” Most often they say, “Yes, I do,” but the part they don’t know is that even during the time you’re with your family, you will most likely have some type of attachment and duty to fulfill for your restaurant. This might be a new lifestyle for many that have never had their own business. Some do well, but others find this lifestyle lonely. Knowing that you must be the go-to person might be too much for some, but many find it rewarding knowing that at the end of the day, staff and customers appreciate their vision and relentless dedication.
