I feel a certain sense of déjà vu as I write this review of 2024 in that, for the fourth year in a row, I must address the unprecedented turbulence our sector continues to endure.

We still face a perfect storm: new barriers to growth and recovery, myriad new taxes and costs, and all while our customers face their own challenges with less money in their pockets. All this means running a hospitality business is harder than ever, and it’s about to become even more difficult in April, when £3.4bn of cost hits the sector thanks to the planned increase in employer national insurance contributions, wage rises and reduced levels of business rates relief.

It is when you are in the eye of a storm that the guiding light, the insight and support of a strong and effective trade body such as ourselves, is ever more vital. In response to this, we’ve been loud and clear in the message we have taken to the highest levels of government – I’ve even taken it to face-to-face meetings in the last couple of weeks with the prime minister and chancellor. 

The message is this level of tax increase is unsustainable and will have a devastating impact on our teams, our guests, and investment in our communities.

As we face the negatives, however, it is ever more crucial that we look for the positives. The situation could have been so much worse but for the tenacity and tireless campaigning of the UKHospitality team and the vital support, contributions and mobilisation of our members.

From tourism and coffee cup taxes; smoking bans and alcohol pricing; planning, energy and skills reform; employment, tipping, and short term lets legislation, rest assured, we make sure the voice of hospitality is heard right at the heart of decision making. 

In Westminster, Holyrood, the Senedd and with mayors, we are making the case, presenting the evidence and lobbying for the change we need to survive and thrive. 

We have also met with hundreds of new MPs since the General Election and can assure you that, despite all appearances to the contrary, hospitality continues to be front and centre of political concerns when policy is being developed. 

That’s because hospitality remains central to delivering the government’s ambitions – growth, jobs, and investment in our high streets. Hospitality is in every part of the country, it touches the lives of every person and it creates opportunities for everyone, everywhere and that is why government must work with us, not against us, to unleash our potential. It is why we will continue to push for rapid delivery on our agenda for change, which includes:

• Root and branch reform of business rates. This has been promised for so long and is the biggest barrier to investment in the high street. We have secured a vital win with a permanent lower multiplier for hospitality, but work will continue this year to ensure that is delivered in full and is meaningful for all.

• Apprenticeship levy reform. Employers need to be encouraged and rewarded for investing in their people and that starts with changes to the apprenticeship levy to give businesses more control and flexibility over how funds are spent. However, it also applies to jobs taxes. This year we launched a career starter apprenticeship, a foundation apprenticeship, and a Department for Work and Pensions pilot for the first nationally accredited induction training programme and digital skills pilot – we need hospitality to be in the first wave of funding and support. 

• A more sustainable tax burden. The everyday economy is recognised in the government’s industrial strategy as a key enabler and facilitator of growth and we really welcome the announcement of a new visitor economy, high Street and hospitality strategy. The government needs to be ambitious, cutting pre-profit taxes and regulation that hold us back. We know a lower rate of VAT would boost demand, help us overcome costs and prevent price rises for consumers. 

Campaigning for these priorities continues at pace, alongside our work lobbying for a rethink to the changes to employer national insurance contributions, particularly the lowering of the threshold.

Hospitality is a substantive force for good, the beating heart of our communities and a vital partner to address the challenges we face as a society. Hospitality is all about making a difference in people’s lives, serving up memorable moments at the heart of our communities. Hospitality supports the cultural, social and economic life of the country. Hospitality brings light and life to communities, acting as a beacon for investment and creating places people want to live, work and visit. 

Without us, there is no urban renewal, city centre or high street renaissance. Without us there is no jobs and skills led recovery. Without us there is no growth.

People are fundamental to hospitality. This sector is nothing without high-performing teams creating exceptional experiences and happy guests. And in the current market, two things are clear to me: this is getting increasingly harder; and technology is here to help (and boy, do we need it). Yet still too often, when I hear hospitality leaders speaking about our industry, it feels like we are in the dark ages. It’s “all about people, not technology” is the cry, and it’s increasingly obvious to me that it’s the wrong answer in this game. 

 

Two things can be true at the same time, and in reality, great hospitality in today’s market means both great people and winning technology. We don’t have to have one without the other. In fact, it is essential to invest in both, to future-proof our businesses. We are living in the midst of what is, in reality, the fourth industrial revolution – a transformative age with new technologies and intelligent machines driving change across society. Just as we would struggle to contemplate life and business without the technologies of the previous revolutions – steam and water, electricity, computers and the internet – the same will be true of artificial intelligence (AI). It is already integrated into our daily lives, from our virtual assistants at home to faster medical diagnosis, through to our experiences in hospitality. 

 

Against the backdrop of a highly volatile market, what is becoming increasingly clear is that we need this technology now more than ever before, especially in the wake of the October Budget. The combined impact of rising national insurance contributions, further increases to minimum wage levels and the withdrawal of business rates relief has heightened this sense. P&Ls are being squeezed, and passing this on to the consumer via menu price increases is much less of an option as a lever to mitigate this pressure, given that – broadly speaking – most operators have put 20%-25% through on price in the past two-to-three years. If necessity is the mother of all invention, as the saying goes, right now, our businesses necessarily need to invent new ways to be more efficient. It’s my sincere belief that this need will accelerate our adoption of emerging AI-driven technologies.

 

Looking to other industries for a moment, the Swedish buy-now-and-pay-later firm Klarna is reducing overheads and investing in AI across marketing and customer service. Klarna’s AI assistant now handles two-thirds of its customer service calls – that’s around 2.3 million a month, and in 35 languages. The result is a drop in average inquiry length from 11 minutes to two minutes, with no reduction in the level of customer satisfaction or revenue. The AI assistant is doing the work of 700 full-time agents and is estimated to have driven $40m cost savings in the business.

 

Some hotel and hospitality groups are making inroads in adopting similar technology, and it is the kind of efficiency that can’t be ignored in the current market. AI can also play a role in the recruitment funnel screening of candidates, in retention, in training, in upskilling and much more. Clearly, there will be myriad opportunities for hospitality businesses to use AI to drive savings, save hours and give time back to our teams, for them to spend with our guests. 

 

It feels to me that, as a society, the AI conversation to this point has largely, and unhelpfully, been entirely dominated by the idea of machines replacing humans. Clearly, for some industries, automation is happening at a significant scale, but it is different for hospitality. Thankfully, it does seem to me that this prevailing discourse is now giving way to something more nuanced and sophisticated in our industry, and – as mentioned above – it’s clear that in this sector, we are going to need both. 

 

One of the biggest opportunities I see for hospitality is to harness AI to help tackle the industry’s productivity problem, while crucially, at the same time, building a greater experience for our teams; better scheduling, communication and culture, better training, more accurate shift patterns, happier shifts and greater job satisfaction and much more, all of which can deliver greater retention.

 

I see this first hand sitting on the advisory board at Sona, a next generation workforce management platform powered by intuitive AI. One of the most powerful applications of AI is its ability to help drive ever more accurate forecasting through its ability to analyse millions of variables and to learn how those variables drive sales. It gives hospitality businesses the ability to more accurately predict demand, creating more sales when the opportunity is there, and the ability to control labour costs when it is not. This is one example; another is the ability to poll an entire workforce, by the shift, and to be able to accurately see team satisfaction or team sentiment scores in real time, across the business, and also use that feedback to optimise shift satisfaction. 

 

Another example is the transformational ability to get closer to each and every guest. AI will personalise every consumer’s journey and revolutionise hospitality CRM systems. Tesco is already doing this with its 22 million Clubcard users and helping customers reduce their bills and waste and to eat healthier. 

 

As industry colleagues who have started their AI journey will know, the ability to compare data sets to drive insights is where it really gets exciting for our industry. For example, AI will be able to help us understand the conditions and metrics we need to be hitting on every shift, in order to maximise sales, maximise guest satisfaction and net promoter score, and perhaps most importantly, deliver the best experience for our teams. AI will bring to life the data we have in every pore of our business.

 

I have a passion for making things better, and I believe we are on the edge of an AI revolution that will transform our businesses. It is about efficiency, insight and opportunity (rather than robot mixologists making cocktails). I would encourage everyone to take the time now to understand it, because in a few years, we will look back and wonder how we functioned without it. 

It’s hardly news that over recent years, many shopping centres and high streets have suffered badly as retail sales have shifted online, and this led to the collapse of numerous businesses including vast department stores. This posed a bit of a problem for landlords and property developers.

 

The solution to filling these empty, often extremely large spaces, has been the new category broadly defined as competitive socialising. Rental agreements were very favourable, reflecting the keenness/desperation of the property owners for bringing in new tenants. The incomers also told a good story about how they would be strong drivers of footfall to the rest of the shopping centre or high street.

 

Needless to say, this proved attractive to investors, and we have seen an explosion of well-funded concepts – some based on what seem pretty flimsy ideas and financial prospects – emerge in the marketplace. Ideas have been cobbled together, with some food and beverage bolted-on and fundraising then ensuing to fuel a roll-out. Axe throwing, ping pong, bingo, bowling, cricket, darts, Formula 1, shuffleboard, escape rooms and even fishing. Actually, I made that last one up. 

 

The models of some of these concepts are not helped by the often high-capital expenditure required to develop the underlying technology, and in many cases, to fit-out the expansive venues. Despite this, the number of competitive socialising venues in the UK has increased by 40% since 2018 to reach around 600, according to estate agency Savills. It suggests this move represents “the biggest development the leisure sector has seen in decades” and predicts there could be more than 800 sites by 2029. 

 

This might suggest rather an over-confidence in the category, because the underlying environment is becoming a lot tougher for the operators of these businesses. One thing working against them is the improving state of the retail property market that is less desperate to fill its space and to give generous concessions to tenants. 

 

Speaking at the recent MAPIC retail property event in Cannes, Chris Gardener, head of European retail at CBRE, said: “I can categorically tell you that retail will be better in 2025 than 2024. It will be an incredibly buoyant year after the last five years, when it’s been tough.”

 

He revealed that a survey of retailers undertaken by CBRE found that 72% plan to expand, and most agreed that physical retail will be at the core of their business strategies. As an example, the operators of The Trafford Centre in Manchester suggested they have no interest in bringing in competitive socialising businesses as the centre does not require any of these footfall-driving tenants beyond its core retail and traditional food and beverage partners. 

 

The other potentially worrying aspect of the competitive socialising model is its reliance on groups, and what is clear is the outsized impact corporate bookings have on many of these businesses. For State of Play Hospitality – which operates the Bounce and Hijingo concepts – this revenue stream represents 25%-40% of its business, and for Lucky Voice, it is 30%. These figures will no doubt be representative of many other businesses in the space. And, of course, these groups will always be biggest spenders per head by some distance, because that’s the way the expense account cookie has always crumbled.

 

The high density of big-spending corporates in the City of London is undoubtedly why it is ground zero for competitive socialising. The financial services businesses in the Square Mile are, like many other organisations, continuing to bust a gut to attract more people back into the office. 

 

Their efforts have involved them being particularly gung-ho for the services of venues offering social activities that can bring teams together and highlight that it’s great fun being back in the office. Competitive socialising also ticks the box on not being simply a booze-up down the pub or wine bar. Any turndown in the appetite of corporates, including a realisation that we are now living in a hybrid working world and no amount of bribes will work on some people, could have dramatic negative repercussions.

 

The UK looks to me like it is past its best for competitive socialising, as it is going to prove increasingly tough for many of these concepts. There will be some failures, and consolidation will undoubtedly prevail. But all is not lost. There are opportunities elsewhere, notably in the vast expanse of the US, where investors are interested in taking some concepts across the pond to inject some footfall-driving operators into their vast number of troublesome shopping malls.

Had a bit of a knees-up at one of the locals last week – as far up as my knees will go these days, anyway. It was great to be in a busy pub with a touch of festive euphoria rippling through the air. Indeed, it was so busy that, unusually, I found myself standing at the bar.

Whether it was the full view of the back-bar or the atmosphere of devil-may-care that caused it, I hit the fridges. While I normally stick with draught, two or three bottled beers had caught my eye and, hey, it’s Christmas, so why not?

The first 500ml bottle appeared on the bar alongside a pint glass. I was outraged, and with perhaps a little more urgency than required, insisted on a half-pint.

But why? I was carried back 30-odd years to a time when Newcastle Brown Ale was briefly fashionable in London circles, and the done thing was to drink it as the Geordies do (or so we were told) – in half-pint glasses. A pint glass exposed you as an amateur.

Another thing I insist on is a “straight” glass as opposed to a dimpled jug. This is a generational matter. When I started drinking in pubs, jugs were preferred by the “old geezers”. Now I’m an “old geezer” myself, I’m irrationally dismayed to see dimpled jugs are back in trendier establishments, where they act as signifiers of a reclaimed “tradition”.

Perhaps I’m more obsessive about this than most, but choice of glassware is an underrated element in licensed hospitality. It’s an integral part of drinking, and plays its part in that semi-conscious process by which customers determine how good a time they’ve had.

This applies to all kinds of drink, but beer is a special case. Clear glass became preferred to pewter or china only after developments in brewing technology meant the beer looked brighter and clearer. Being able to see right through it became a test of quality.

Aesthetics is another consideration. Serious British drinkers used to look enviously upon the Belgians, who had already cottoned on to the way branded glassware, elegantly shaped to optimise the presentation of a beer, could enhance the experience – and, of course, premiumise it.

On these islands, Guinness led the way, making sure pubs understood that pouring it into the correct glass really could boost their sales and, at the same time, justify a higher price point. Other brewers followed with varying degrees of success. There are social media channels dedicated to calling out pubs that use the wrong glass.

Licensees grumble that they don’t have the space for all these different glasses. That may be a case for getting their priorities right. Or it may call for what I think can be the ideal, if costly, solution in which pubs and bars customise their glassware to promote their own brand.

We see this pushed furthest among specialist venues that thrive on offering a great variety of brews and a frequently changing beer menu. 

And, if anything, craft beer has made glassware even more important – although not all beer is supposed to be clear now, of course. The craft revolution has brought hazy brews, thickened by grain proteins and hop polyphenols suspended in the liquid rather than yeast particles betraying dregs, an unsettled cask or dirty lines.

New England IPAs especially can be perfectly opaque, flavoursome and vibrantly coloured, like a fruit juice. Other unfiltered beers can look like murky dishwater, but they’re falling out of fashion now, thankfully.

Size is important too. Craft beers, particularly the stronger ones, benefit from being served in two-thirds of a pint. Or if it’s north of about 8% ABV, a third. The smaller measure not only encourages exploration and experimentation: in the correct glass, built to carry two-thirds of a pint – a tulip shape, perhaps, with or without the stem – it signals that you’re drinking a craft beer, and it’s meant to be that way. 

It’s also worth noting that drinkers these days like to take a photo of what they’re drinking and post in on social media, and they can’t avoid including the receptacle it comes in, a receptacle that simultaneously speaks of the quality of the brew, the good taste of the consumer and the seriousness with which the pub or bar takes its beer.

And I haven’t even mentioned how vital it is that the glass is clean. But you’re all over that, of course. I’m sure they’ll be sparkling like tinsel tonight.