Give an industrya bad name…

01 January 2000
Give an industrya bad name…

There is a public perception that restaurants use massive profit mark-ups, hotel bedrooms are too expensive, and hidden extra charges lurk around every corner.

Why should this belief exist? The business failure rate and return on capital investment on hotels and restaurants shows it isn't a high-profit industry. And the public seem to have no problem with high mark-ups on other goods and services.

Pricing policies have hit the news twice in the past week, each time sparking public condemnation. The first concerned bottled water in restaurants.

The BBC's Food and Drink programme highlighted a filtration system that allows tap water to be sold in reusable bottles.

The water is pure and potable, but according to its critics is too pricey. The argument concerns what the bottle of water might cost as a raw material and what the customer is being charged for it. That comparison takes no account of the restaurant's operational costs. Yet the mean words flow as freely as the water.

The second price row centred on the cost of hotel rooms in Manchester during the Euro '96 Football Championships in June. The accusation by the Football Association (FA) is of profiteering, because some hotels are not offering the huge discounts on room rates sometimes available.

Wouldn't the accusation be fairer if hotels were charging extra for a room instead of the normal, published rack rate?

There is also more than a degree of humbug in the FA complaining about inflated prices, as anyone who has bought tickets for Euro '96 knows. The FA is not charging normal Saturday prices, but that, presumably, is regarded by the FA merely as bending to market forces.

The Labour Party's shadow minister for tourism, Tom Pendry, joined in the criticism of Manchester hotels in his address at the inaugural dinner for Hotelympia at the People's Palace, London, last week.

What a pity Mr Pendry didn't know the People's Palace was one of the restaurants selling bottled tap water: he could have highlighted another price row by raising his glass.

Yet while we as an industry believe prices are fair, perception is the game. If the public choose to think of us as an opportunist and greedy industry, the danger is that some of them will begin to show their displeasure by turning away.

Bob Gledhill

Deputy Editor

Caterer & Hotelkeeper

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