How the Falling Pound is Raising the Profile of Finance Professionals in UK Hospitality and Tourism

With the recent change in leadership in the UK and the country seemingly hurtling towards a ‘no deal’ Brexit, the value of the pound is decreasing rapidly and is currently at its weakest against the dollar and euro since 2017. With predictions of it falling further as Boris Johnson continues with his commitment to fulfil the UK’s vote to leave the EU, it’s impossible to tell where we will be post October 31^st 2019.

A falling pound is seen by many as a blow to the economy, but one area that is benefitting is the hospitality sector with the UK now a more appealing destination for travellers and holiday makers around the world. The impact on UK residents? A surge in “staycations” has been reported by all major travel companies with Alexis Harrison, Head of Marketing at Wowcher saying: “Already in 2019, we’ve seen a huge demand for trips to UK destinations- mirroring an increasing trend for staycations, and the convenience of short city and country breaks. Consumers are looking to be more savvy with their spending this year, particularly when it comes to travel; it’s likely we’ll continue to see Brits buying more breaks that are a little bit of luxury, close to home.”

Over the last 18 months the difficulties felt in the ‘casual dining’ space has been felt by casualties such as Prezzo, Carluccios, Byron Burger and most recently, Jamie’s Italian. However, the other end of the industry is still pushing forward in the shape of the more independent, newer brands popping up throughout London and other major cities. As consumer’s, both domestic and international, tastes have moved towards local produce, a more personal experience with a community feel and something a little ‘out there’. Whether it be a themed menu, creative cocktails or nostalgic décor, the casual dining sector has moved ahead of the traditional one size fits all chain approach and is making waves for all of the right reasons.

This trend can be seen across the hospitality sector with the pop up scene exploding and new attractions and spaces making a consistent debut appearance regardless of what would be seen as an economy in trouble. With the UK’s pop-up industry currently worth over £2.3 billion a year and with almost 30% of British businesses beginning their entrepreneurial journey as a pop-up, whether it’s axe throwing, indoor golf, roof top bowls, cocktail tours, BBQ boats…the ideas and opportunities are endless.

So how has this effected the role of the CFO and the finance function within the sector?

The demand for more CFO’s and senior finance heads with SME and PE experience has increased with business heads now turning to finance leaders from the traditional, larger chain-based hospitality brands in order to utilise their industry knowledge to complement their new age ideas. Being close to the business and the operational side has never been so important, especially in such a competitive sector where margins must be fought for.

Increasingly, over the last 18 months we have found that this is the favoured proposition for senior finance professionals looking for new opportunities and those who are looking to be part of a new exciting wave in the hospitality space.

With the shift in the consumer mindset this has also meant a change in information required by businesses. There is now a thirst for more commercial knowledge with a focus on customer spending trends, menu analysis, produce supply, staffing and labour cost control to service key busy times while keeping waste to a minimum. The technology used for payments has changed and so better EPOS and payments systems have been introduced. All of these require new financial insight as well as experience within systems and process change and improvement.

Finance teams are now far less process based through cashless payments, automated invoice processing and improved month end and reporting processes, all facilitated by the ever-changing technology landscape. This in turn pushes further towards the more commercial and strategic finance vision of companies in the UK and around the world.

With B***it looming and the host of uncertainties it presents to the economy, the hospitality and tourism space will continue to push forwards as we and our visiting tourists demand new ways to eat, sleep and play. With the next concept always just around the corner, the visionary talent is alive and well, however without the support of an experienced and commercially astute finance leader, can they survive in a market where costs are one of the biggest factors of success? Whether it be across food, labour, rents or tech, having control over the underlining finances and future investment involved is the key to future growth.

Author: Associate Directors Sanjeev Sibal & Richard Nourse.