What lies ahead in 2010

07 January 2010 by
What lies ahead in 2010

The past 12 months have provided a tough time for everyone within the hospitality industry. Daniel Thomas looks ahead to this year and tries to predict what is in store.


It will be another tough year for hotels, but the rate of decline is expected to slow with revenue per available room (revpar) dropping by an estimated 2-3% - compared with the falls of 10-15% seen in 2009.

Hotels will continue to be flexible with room rates - quietly, of course - and add value to attract customers, while many will look to financial restructuring to ease cash-flow problems.

The sector may see more of the interesting trend that developed last year, where some four- and five-star hotels moved to reduce their star ratings in order to cut unnecessary expenditure in areas not valued by guests.

The hotel property market will begin to recover, without getting anywhere near the level of transactions seen in 2007. The market will be driven largely by single-asset deals, with many sale decisions taken by banks.

The Savoy in London should finally reopen this year after a series of delays that have plagued the £100m refurbishment; Starwood will introduce its luxury W brand to the UK, with openings due in both London and Manchester; and the Dorchester Collection will open Coworth Park, a country house estate and spa in Berkshire, and 45 Park Lane in London, a stone's throw from the Dorchester.

Domestic tourism is expected to provide another boon for hoteliers, with VisitEngland research showing that nearly three-quarters of UK consumers plan to holiday at home this year.


The climate will also remain tough for restaurants, certainly for the first half of the year, so value and quality will remain the watchwords for operators.

Chefs will once again be challenged to be creative with ingredients, making sure absolutely nothing goes to waste, paving the way for exciting new dishes to appear on menus.

Expect restaurateurs to dig deeper into the roots of the cuisine they are serving, so not just Italian but Venetian or Roman, for example. Mexican food is expected to be a growth area, with the opening of Chipotle and expansion of Wahaca.

The Mandarin Oriental will welcome six Michelin stars-worth of talent to its roster with both Heston Blumenthal - making his London debut - and Daniel Boulud set to open restaurants at the five-star hotel. John Campbell, who won two Michelin stars at the Vineyard at Stockross, will be in charge of the kitchen at Dorchester Collection's new Coworth Park hotel.

Another two big names from the chef world, Pierre Koffmann and Eric Chavot, have confirmed their intention to open in London, although whether this will come to fruition within the next 12 months remains open to question.

Within the chain restaurant sector, many of the leading operators are on the acquisition trail and aggressively looking for sites. Will this be the year that Clapham House Group is finally sold?

Technology will play a bigger role than ever in helping consumers decide where to eat, with the likes of Toptable launching location-based services to capitalise on the popularity of mobile internet devices such as Apple's iPhone.


The increasingly bitter dispute between the major pub companies and a number of their tenants over the controversial beer tie shows no sign of dying down this year.

The involvement of the notoriously aggressive GMB union ratcheted the dispute up to a new level towards the end of last year, resulting in the slightly surreal situation where self-employed business people - tenants - were being urged to threaten strike action.

The Government will, at some point in the coming months, issue its response to last summer's highly critical select committee report on the pubcos and the beer tie which will, at least, give some more clarity to those on both sides of the dispute.

Expect another tough year of trading, with consumer spend still impacted by the ongoing recession and supermarkets continuing to offer rock-bottom prices on alcohol.

Pubs will continue to offer discounts on food to encourage punters to come through the doors, but they will need to guard against normalising these price reductions - discounting will have to be just part of the overall marketing package and highly targeted.

This year's General Election will see politicians from both main parties promising to crack down on problem drinking - whether these vows come to fruition after May is very much open to question.

It's not all bad news for the trade, however, with research consistently showing that consumers are determined to continue going out - it is up to operators to make sure that customers choose them when they do so.


Contract caterers will continue to shout about their use of local sourcing and sustainable practices, with food quality remaining high on the agenda.

The tough economic climate means caterers will have to continue to keep a close eye on costs to help both their bottom line and to meet demand from clients.

The risk that has been gradually transferred from the client to the caterer on business and industry contracts in recent years will come to fruition this year, with the contractor taking on virtually all the risk on the majority of contracts.

Along with that comes the need for a focus on quality and service to ensure that customers don't migrate to the high street. This will be reflected in the increase in focus on "grab-and-go" type food, rather than the traditional main course, although this will still be important in non-city contracts.

There will be plenty of jostling for position as caterers look to jump on the Olympics bandwagon, following December's publication of the London 2012 Food Vision.

School meals caterers will be keen to keep the issue high on the political agenda in General Election year, with the end of the Government's transitional funding in March 2011 fast approaching.

Take-up remains dangerously low - sitting precariously at 36% - and the entire school meals system remains in danger of collapse without support from all sides. But there have been some encouraging signs, with the chancellor announcing plans to extend eligibility among children for free school meals in December's Pre-Budget Report.

For a preview of the legislation changes due in 2010, see Employment law changes in 2010 in our Infozone section.

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