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TLT Reveals Key Trends In The Hospitality Sector For 2023 / 2024

National law firm TLT has revealed key trends and notions that have shaped the hospitality sector in 2023 and which are anticipated to drive growth in 2024.

The data was disclosed in a report commissioned that surveyed 500 UK hospitality operators including restaurant groups and virtual experience operators.

Faced with cost pressures impacting consumer spending, changes in consumer demands and staffing challenges, the report suggests operators are having to broaden their offering to entice customers through their doors and think outside of the box to attract and retain valuable talent. Here we look at some of the key trends facing the sector in 2023 / 2024:

Labour shortages

The report revealed that staffing continues to be a major issue and was highlighted by operators as the biggest social economic factor impacting the sector with 56.6% of those surveyed claiming that staffing was their main concern in 2023. 65% of operators shared they are using environmental, social and corporate governance (ESG) to attract and retain staff. For example, operators have invested in ensuring the working environment is suitable for new recruits, they are turning their attention to sustainability and have introduced wellbeing charters.

Looking forward, Joanne Hennessy, business immigration partner at TLT claimed that recruitment challenges in the sector have been exacerbated by events such as Brexit and the pandemic. Joanne reflects that adding hospitality roles to the government’s shortage occupation list (sol) could open up the sector to a much wider labour market.

Growth and innovation
Adapting to the changes in consumer trends and attracting a wider client base is now more important than ever for driving growth and building a sustainable business in hospitality. Over half of those surveyed stating attracting a new customer demographic as a growth strategy in the next 12 to 18 months. The highest percentage of respondents (48.4%) choosing ‘expanding the use of social media platforms’ as presenting the biggest opportunity for growth and innovation. This was followed by ‘wellbeing’ (35.9%), ‘personalisation’ (30.2%) and introducing ‘plant based’ menus (27.8%). In addition, 42.9% are looking to expand their customer base through good business principles and value adds such as EV charging infrastructure on sight.

New openings, expanding delivery offerings and developing new brands and concepts were also sighted as top opportunities for growth. 24% stated they have been looking at new openings, 17% at delivery opportunities and 35% have already developed new concepts and brands to drive revenue. In terms of barriers to attracting consumers, cost pressures are top of the list with 49% of respondents saying they’re looking to reduce their cost base.

The report also revealed that despite the economic headwinds sustainability remains a key focus, with 33% saying they were planning to make changes within their businesses in the next 12 months. Half of operators said they were already engaged with local communities to promote the importance of ‘sustainable socialising’, while 33% said they had a net-zero strategy in place.

However, despite a clear wave of intention 54% of operators said balancing the cost of investment was holding back their sustainability goals.

Paul Crighton, banking partner at TLT, commented that for those facing cost barriers in achieving sustainability goals, green loans could be a viable option but sustainability-linked loans are only just becoming mainstream. He states that “using a green loan could be an option for those wanting to make their buildings more environmentally friendly; they’re available to borrowers carrying out green projects such as purchasing a building with excellent green ratings.”

Julian Mant, partner at TLT commented: “2023 is the year for the hospitality sector to look to innovate and grow and this report is a clear indicator that this is what will happen. This report draws on a survey of those working in or supplying hotels, restaurants, pubs, bars, and event venues across the UK, and includes direct conversations with senior leaders. I believe this report is a valuable tool for those looking to innovate and grow this year and beyond”

Download the Rethinking Hospitality Report: Rethinking Hospitality: Embracing Challenges, Unlocking Growth – TLT LLP