The industry may have emerged from recession in 2010, but it has been a slow and gradual recovery for most with austerity being the watchword. Daniel Thomas reports on a year of cost cutting, chain restaurant mergers and Chris Hutcheson
While the UK economy officially emerged from recession in the final quarter of last year, 2010 has been another tough trading year for most hospitality operators.
In the hotel sector, there was clear evidence of a two-track recovery, with London performing well - revenue per available room (revpar) was up an estimated 9% on 2009 - but provincial properties continuing to struggle, with revpar only up around 1.5%.
There was also a clear divide in the restaurant sector, with chain operators keeping their heads above water - in many cases, driven by discounting activity - while many independents faced a difficult year.
The pub sector was marked by dispute, with the ongoing row about the beer tie, the industry hitting out at duty rises and the boardroom battle at Mitchells & Butlers playing out in a very public manner.
Things were a little quieter on the contract catering front, with the big boys posting solid if unspectacular results, although the sector was not immune to business failures.
Austerity has been the watchword since the change in Government following May's general election, with spending cuts, tax rises and widespread job losses all on the agenda.
October's Comprehensive Spending Review (CSR) had significant repercussions for the hospitality industry, most notably with the 34% funding cut for tourism agency VisitBritain.
The cuts in public sector funding are expected to lead to 25,000 job losses in hospitality, as those operators that supply the Government lose out on contracts.
There was further bad news for large hotel operators buried in the CSR, with the announcement of a u-turn on the CRC Efficiency Scheme. Under the original plan, operators had to purchase electricity allowances but would be reimbursed depending on how carbon efficient they were. But the Government scrapped the credits aspect of the scheme, leading to complaints the CRC had become a "stealth tax".
But there are likely to be some winners from the cuts, including budget hotels as the Government tries to rein in accommodation spending and contract caterers, with more outsourcing on the agenda.
Discount promotions in chain restaurants and pubs significantly changed the habits of UK consumers this year.
In June, a survey of 3,000 UK consumers by corporate restructuring firm Zolfo Cooper revealed that the number who were more likely to visit a restaurant if it offered a price promotion had grown by 39% since the start of the year.
Stephen Broome, hospitality director at consultancy PricewaterhouseCoopers, called vouchers "the saviour" of the casual-dining market.
Not all, however, were convinced. Jeremy Roberts, commercial director and co-founder at Living Ventures, says the group has shied away from discounting for a reason. "I think vouchers are a very blunt instrument and very hard to control," he told Caterer.
The fiery chef was, as ever, rarely out of the headlines in 2010. The year, which saw the departure of trusted lieutenants Jason Atherton and Angela Hartnett, started with the revelation that that Gordon Ramsay Holdings (GRH) made a loss of more than £4m in the year to August 2008 as the chef rapidly expanded overseas operations and then the news that GRH lost its Michelin star at Claridge's.
But the revelation that got the headline writers really excited was the sacking of GRH chief executive - and Ramsay's father-in-law - Chris Hutcheson, after 12 years at the helm.
The bitter fallout from the decision was played out in the media, with Hutcheson telling The Mail on Sunday that Ramsay had become a "monster", and the chef then claiming in an open letter to his mother-in-law Greta in The London Evening Standard that Hutcheson ran GRH as a "dictatorship" and hinting at issues with company expenses.
Despite the fallout Hutcheson remains involved with GRH, having taken control of Pétrus in November. It follows his move to appoint himself as sole shareholder in April.
Mergers and acquisitions
After a quiet couple of years on the mergers and acquisitions front, this year saw a number of deals, particularly in the chain restaurant sector.
Italian restaurant chain Carluccio's agreed to a £90.3m takeover offer from Middle Eastern retail and leisure giant Landmark; Nando's owner Capricorn Ventures paid £30m for Clapham House Group, the owner of Gourmet Burger Kitchens and the Real Greek; while Mitchells & Butlers swooped for Ha Ha Bar & Grill, paying Bay Restaurant Group £19.5m.
On the hotel front, Royal Bank of Scotland (RBS) sold the Cumberland Hotel in central London for £215m to a joint venture of US private equity firm Starwood Capital and property investor London & Regional. CBRE Hotels, which handled the deal, said it was the largest hotel investment in Europe for over a year.
The deal formed part of RBS's exit strategy from the hotel sector, with the iconic Grosvenor House and a portfolio of four Hilton properties - the London Hyde Park, Avisford Park in Arundel, Bracknell and Maidstone - for £600m and £67m respectively.
School Meals Matter
Months of concern over the future of the School Lunch Grant were laid to rest after it emerged from the CSR that funding will continue beyond the grant's expiry date of March 2011 as part of the expanded baseline budget for schools.
The announcement marked a success for the Caterer and Hotelkeeper School Meals Matter campaign, held in conjunction with the Local Authority Caterers Association (LACA).
Caterer launched the campaign ahead of the general election, calling on the government-elect to demonstrate a firm commitment to the importance of school meals.
Good month/Bad month some of the highs and lows of 2010
Alain Ducasse The French chef's eponymous restaurant at London's Dorchester hotel is awarded three Michelin stars. The news emerged early as the results were - for the second consecutive year - inadvertently leaked on to the web.
Simon Laffin The Mitchells & Butlers chairman is ousted from the company's board after losing his battle with billionaire Joe Lewis.
El Bulli fans Ferran Adrià quashes speculation that the iconic restaurant will close for good, revealing it will reopen as a non-profit foundation in 2014, following two years of planned closure in 2012.
River Café Rose Gray, 71, co- founder of the acclaimed London restaurant, with partner Ruthie Rogers, dies after a prolonged battle with cancer.
Pub sector The industry reacts angrily to the Budget announcement that duty on wine, beer and spirits is to rise by 2% above inflation.
Competition Magnuson Hotels launches into the UK hotel market with free membership, promising to shake up the world of hotel marketing consortia.
Chris Corbin and Jeremy King The Wolseley owners reveal plans to develop an 85-bedroom boutique hotel in Mayfair, fulfilling their long-held ambition to enter the hotel market.
UK tourism Volcanic ash disruption costs London alone £102m in lost tourist spending, with hotel occupancy down by as much as 25%.
Jason Atherton The Michelin-starred-chef opens his first independent restaurant venture, at the Waterhouse at South Bund hotel in Shanghai.
School Food Trust The Government slashes the SFT budget by £1m, leaving overall funding of £7.65m, with 40% saving required before the end of the year.
Pierre Koffmann The iconic chef makes his highly anticipated return to the UK with the opening of Koffmann's, located in the site previously occupied by Gordon Ramsay's Boxwood Café in London.
British Hospitality Association Budget hotel group Travelodge follows Compass Group's lead and resigns from the BHA, saying that it can best lobby the Government as an individual company.
Jamie Oliver The chef is named the most powerful and influential person in UK hospitality, as the Caterersearch.com 100 returns. Oliver beat Andrew Cosslett, chief executive at InterContinental Hotels Group, and Heston Blumenthal to top spot.
The Restaurant The BBC decides not to commission another series of Raymond Blanc's reality show, weeks after the second winners of the show quit their business less than a year after opening.
South Wales hotels Hotel bookings treble as golf fans rush to book accommodation ahead of golf's Ryder Cup, with room rates 162% ahead of last year.
Birmingham restaurant-goers Figures reveal food poisoning cases at restaurants and take-aways in the area have rocketed by 25% during the past year.
George Goring The hotelier receives the Lifetime Achievement accolade at the AA Hospitality Awards 2010. Goring, who was at the helm of London's Goring hotel for 43 years, was recognised for his "pursuit of perfection".
TripAdvisor Hundreds of hotel and restaurant businesses launch legal action against reviews website over what they claim is unfair treatment.
The Savoy The iconic London hotel finally opens its doors after a much-delayed refurbishment programme.
Restaurants at Work The independent contract caterer goes into administration, with BaxterStorey acquiring the trading assets of the former business.
Andrew Stembridge The managing director of Chewton Glen is named the 2010 Hotelier of the Year. He is the fourth hotelier from Chewton Glen in New Milton, Hampshire, to win the coveted award.
L'Autre Pied The Michelin-starred restaurant falls victim to scammers who left without paying a £572 bill after pretending to go outside for a cigarette. They were later arrested.
London hotels There is an unprecedented level of enquiries and bookings for the week of the Royal Wedding next April, with some hotels charging up to 200% more for rooms than at the same time last year.
2018 dreams Hopes of a net £3.2b boost to tourism in 2018 are dashed after England loses its bid to host the football World Cup.