As the UK hospitality sector continues to face challenges, 45% of Brits in North East England think hospitality venues aren’t trying hard enough to encourage them to visit. The research, commissioned by independent finance broker Charles & Dean, highlights that almost half (45%) now expect more from hospitality venues if they are to visit, as 3 in 5 (60%) would visit a restaurant that invested in new developments and 44% admit spending more in recently renovated venues.
What’s more, the difficulty of the last few years and a lack of recent investment hasn’t gone unnoticed: 45% say their local restaurants look below par and in need of an update.
In its ‘Feeding Growth for F&B’ report, Charles & Dean has mapped potential investment areas and developed a Hospitality Investment Index, outlining the investment areas likely to drive most ROI in restaurants and bars.
|Top 10 areas of investment to drive ROI|
|1. New menu offering|
|2. Outside space (i.e. a garden or terrace)|
|3. The decoration or aesthetic of the veunue|
|4. Self-ordering technology (i.e. on a screen, a touch-screen table or via an app)|
|5. New chef|
|6. ‘Intuitive’ dining rooms (i.e. lighting, type of music and volume that adapts to how busy the venue is, the temperature or time of day)|
|7. Modern or recently updated branding|
|8. Payment technology (e.g. paying through a QR code at your table)|
|9. Music or entertainment in a venue|
|10. Sustainable or green credentials (i.e. no-waste policy, systems that convert waste to energy, use of only local and seasonal produce)|
Crucially, the research reveals that consumers are not only willing to visit hospitality venues due to these investments, but they will spend more when there. The data reveals that in the North East, on average, they would spend £20.41 extra per person in venues with music or entertainment and £21.27 in a venue with outside space. New and innovative technology also looks to be a winner: Brits would pay an average of £23.37 more at venues with features such as self-ordering or technology that pours drinks, and £27.89 more at venues that incorporated AI or machine learning into the experience. Even the most futuristic-seeming features have appeal, with ‘robot’ waiters or chefs likely to result in a spend uplift of £24.26 per person.
Tom Perkins, Director and Co-founder, Charles & Dean, commented: “Long-term uncertainty has plagued hospitality businesses, who have been holding back on innovation and investment. Our research has shown that even introducing a new menu or incorporating new technology is likely to help attract and retain customers and so, while this may require some extra thought, planning and investment, it can also be the key to unlocking further revenue.
What is crucial is that hospitality businesses, often sidelined by traditional lenders, are supported with the finance they need to make such investments. It can often be difficult to secure finance through the traditional routes if businesses have to demonstrate three years of profitability – there are very few hospitality businesses that remained consistently profitable between 2020 and now, for obvious reasons. However, there are workarounds: looking beyond the traditional channels of overdrafts and fixed term loans can reveal a wealth of finance options available. An example is the Business Cash Advance (BCA) which is perfect for businesses like restaurants that have uneven cash flow due to seasonal fluctuations in revenue. These alternative options can open new channels for obtaining finance and can empower hospitality businesses across the North East to thrive and meet their ambitions this summer and beyond.”
Find out more and download Charles & Dean’s Feeding Growth for F&B report here.