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The Caterer

Caterer's predictions for 2008

01 January 2008 by
Caterer's predictions for 2008

How will the changes to capital gains tax affect the hotels sector? Who's in line for a Michelin star? What will the Government do about binge-drinking? And will school meals recover? The Caterer team takes a look at the year ahead

Hotels - by Daniel Thomas

If you believe some of the media hype, consumer spending is going to collapse this year. But most experts believe the hotel sector will carry on as normal in 2008, particularly in London where the market has been very strong.

There will, no doubt, be some pain for hoteliers as people become more careful about splashing the cash, but this could work in the favour of branded hotels: consumers will look to names they trust if things get hard financially.

Although there are likely to be fewer deals in the sector, property experts believe those expecting to pick up hotels on the cheap will find little to buy. Instead, there will be good opportunities for cash-driven buyers, with deals at sensible prices - rather than the "trophy prices" that were being paid in early 2007.

We can expect a spate of hotel deals in the run-up to April, as investors look to sell before 10% taper relief is scrapped under Alastair Darling's controversial capital gains tax changes.

Hoteliers will also be keeping a close eye on the chancellor's first Budget in March, which should contain further details of the abolition of Hotel Buildings Allowance by 2011 - but hopefully no more pain for the hospitality sector.

Restaurants - by Kerstin Kühn

Last year saw a number of high-profile restaurant openings, including Alain Ducasse's long-awaited eaterie at the Dorchester, and 2008 is set to be equally busy, despite the fears over consumer spending.

New London openings include former St Alban head chef Francesco Mazzei's L'Anima, Alan Yau's Cha Cha Moon, and eco-friendly Acorn House's sister venue the Waterhouse. Outside the capital we have Michelin-starred chef Simon Rogan's new venture in Henley, Oxfordshire, and Paul Heathcote's new fine-dining eaterie, the Elliott, in Manchester. And, after more than a year of speculation, Richard Corrigan is expected to join London's Grosvenor House hotel in the spring.

Jamie Oliver is spreading out into the high street with the launch of his new restaurant chain, Jamie's Italian, the first of which is set to open in Bath in March. Gordon Ramsay is expanding his restaurant empire further with the launch of Angela Hartnett's new restaurant in London and his first venture in France in the spring.

Michelin star predictions include a number of newcomers such as London's Wild Honey, sister venue to Arbutus, and Glynn Purnell's first solo venture in Birmingham, as well as established names including Galvin at Windows and Theo Randall in London. Foliage at the Mandarin Oriental in London is tipped to pick up its second star, while Hibiscus is widely expected to retain its two stars after its relocation to the capital.

Pubs and bars - by Christopher Walton

The smoking ban dominated the pub landscape in 2007, changing forever the way that operators work. In 2008, alcohol will become the new tobacco as the Government continues to crack down on binge-drinking.

Pubs and brewers are calling for a tax freeze on beer to help boost flagging sales, while temperance groups are calling for a tax rise to stop binge-drinking. The Government will have to decide which side wins in 2008.

The debate won't help pubs, which are already tackling a wide range of legislative issues from the smoking ban to the Licensing Act. Liberal opening hours may well prove to be a flash in the pan if the Government decides there is a link with alcohol abuse.

It is hard to argue that the smoking ban is not transforming many pubs for the better, improving locations, outdoor areas and menus. These efforts will begin to pay off during 2008, attracting high-spending females, families and over-50s. Those that refuse to change their businesses will continue to struggle and see sales fall.

However, the uncertainty over consumer spending will be a big worry. Pub companies want a return on their investment for improving their offerings, but if customers are feeling the pinch, pubs won't get the money in the tills.

Contract catering - by Chris Druce

This year kicks off with a fifth major player joining the established forces of Compass, Sodexho, Aramark and Elior in the £3.8b UK contract catering sector, after the takeover of Holroyd Howe by BaxterStorey.

The combined company, with turnover approaching £180m a year, will no doubt elicit a few nervous backward glances from Elior, which has had a tumultuous 12 months, with its business restructured into three operating divisions and a slew of redundancies.

While Elior will be looking to put the challenges of 2007 behind it, Compass, which has been wooing investors and analysts alike recently, still has unfinished business. Chief executive Richard Cousins admitted in November that, although good progress had been made in reshaping the company's £2b UK business, work remained to be done.

School meals uptake hit rock bottom in 2007 but is on the up, at least according to the Government and Jamie Oliver. However, not all local authorities share this optimistic view and huge concerns remain about a lack of clarity over the nutrient-based guidelines for school dinners that will come into force in primary schools in September.

Care caterers will also expect to see results from the Government's stated commitment to tackling malnutrition in care homes.

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