On 1 April 2025, hospitality businesses across England will be waking up to new business rates bills that could have increased by tens of thousands of pounds. They could be forgiven for thinking this is a cruel April Fool’s joke, but it’s the very real prospect businesses are facing if relief ends on the 31 March, as is currently the case.

It’s a financial cliff edge that would be catastrophic for businesses up and down the country. Put simply, if your venue has a rateable value of £40,000, your rates will increase by almost £15,000. A business with a rateable value of £70,000 will see an increase of £30,000, and having a rateable value of £100,000 will see that venue lumped with £40,000 in additional rate bills.

The government cannot allow that to happen. That’s why ahead of this Budget, addressing the looming business rates crisis is UKHospitality’s primary focus. We’re calling for a solution that offers stability, certainty, and lower rates bills. 

A new lower, permanent and universal multiplier for hospitality businesses will avoid this devastating cliff edge scenario next April, but it will also provide some certainty for businesses that would no longer have to worry about the year-to-year uncertainty of whether relief will be extended. 

It will allow businesses to plan for the future and increase their capability to make our villages, high streets and communities more attractive places in which to live, work and invest. It’s a solution that has been backed and recommended by the Hospitality Sector Council, a body made up of experts across the sector who worked with government to come up with answers like this. 

For the government, it would begin to deliver on its manifesto commitment to replace the broken business rates system and level the playing field between the high street and online giants. If this cannot be delivered, it’s important that reliefs are rolled over and are uncapped. Because without a solution, your business will be enormously affected. 

The increases businesses would experience are staggering, and that would be on top of five years of financial turmoil that include a pandemic, soaring energy bills, labour shortages, sky-high inflation and a cost-of-living crisis.

Should business rates bills quadruple, then venues will need to divert funds that would otherwise be used for investment and driving growth into simply paying their bills to stay in business. A lack of action would be irresponsible, threatening our growth potential and even the survival of many independent and multi-site operators. 

And next April could simultaneously mark another significant increase to the national minimum and living wage, which has already risen by up to 40% for some age bands over the past three years. There must be caution against imposing another excessive increase that goes too far, too fast. Alongside a lower business rates multiplier for the sector, there needs to be other measures to offset the ongoing cost pressures being placed on businesses. 

That’s why we are also continuing to call for reduction in VAT for the sector to bring it in line with our European counterparts and make British hospitality and tourism more competitive, stimulating demand, creating jobs and enabling businesses to grow and reinvest. A reduction in employer national insurance contributions that will help businesses cope with increasing wages also remains a key ask.

There is a raft of other things that can be implemented to improve the sector’s fortunes too: reform of the apprenticeship levy, a new planning system that includes fast-track approvals and reforming investment credits so they are offset against employment taxes rather than corporation taxes.  

All of these things can help reduce the cost burden on hospitality and, crucially, take the brakes off growth. Because let’s be clear, it’s the growing tax and cost burden that hospitality is bearing that is preventing us from reaching our potential. As a sector, we are best placed to deliver change, generate economic growth, create new jobs and help regenerate our communities. 

We’ll be making the case for action in everything we do in the next seven weeks leading up to the Budget, but you can play your part in making a difference too. Business leaders across the sector can get behind our asks in a very simple way – writing to your MP to stress the need for action. 

You can do that right here, as well as finding out more about our Budget asks. Let’s act as a collective voice to bring about positive change for our industry, because without it, there will be a very rocky road ahead if those quadrupled business rates bills come to fruition on the 1 April next year. 

Kate Nicholls is chief executive of UKHospitality 

I recently read a LinkedIn post by friend of KAM, Simon Stenning, bemoaning the lack of “follow up” after a visit to what sounded like a heavenly upscale restaurant/gastropub. As luck would have it (genuinely), I had just started writing about a recent visit I made to Thai restaurant Kin&Deum in London Bridge, which, I believe, followed up after my visit perfectly. Simon made the point that, despite the fantastic meal and overnight stay, he felt that something was missing – not something at the time of the visit, but something after. No follow up. No “thank you for coming”, no request for feedback, not even a “how was your stay?”

 

It wasn’t a cheap meal/stay, and so to hear nothing from the venue post-visit seems odd. Surely there aren’t any operators out there who still don’t ask for feedback? Spoiler alert: there are (if you’re one of them, come and see me after class). Surely not thanking customers for their stay is counter intuitive. If you know you have a great brand and you provide great service, why would you not contact the customer to say thank you and encourage a return visit? Loyalty is, after all, a valuable commodity everywhere, but certainly in hospitality in the current climate.

 

Let’s look at how important post-visit follow up is to hospitality customers. KAM’s recent Plan to Plate report, a quarterly tracking programme in conjunction with Paytronix, tells us that after looking at the food menu online, online reviews are the second most likely thing that customers will turn to in order to decide which hospitality venue to visit. So not encouraging reviews, or worse, ignoring them, really can be detrimental to your brand.

Unfortunately, in the last three months, only 38% of hospitality customers have actually left a review. How do we increase that number? Well, the ability to leave a review via their smartphone, and in their own sweet time, is what 35% of customers say would encourage them to leave more reviews – that and loyalty scheme points (31%). And 19% would be more likely to leave a review if they could do it on their phone or a digital screen in venue while paying their bill.

 

Back to my post-visit experience of Kin&Deum – what made it so special? Well, they made me feel special. Before I received the thank you for visiting and request for a review email, I received an email from an actual person (not a hello@ address) thanking me for my visit and giving me a direct link for any future bookings. I’m sure this goes out to all customers, but regardless, it made me feel like I had exclusive access. It also made it very easy for me to immediately book another visit – which I did.

 

Interestingly, when we ask customers what they would like a pub, bar or restaurant loyalty scheme to look like, we see a demographic split, with higher earners wanting “exclusivity”, something that the average customer doesn’t get (not just a link to book, but that’s a start), and lower earners preferring to gain points towards vouchers/future spend. It all comes down, again, to knowing your customers and knowing what floats their loyalty boat.

 

Let’s talk briefly about loyalty schemes – something that retail (think Tesco/Sainsbury’s etc) does incredibly well, but we just haven’t aced in hospitality as of yet. Just 24% of hospitality customers have been part of a pub, bar or restaurant loyalty scheme in the last three months, according to Plan to Plate. Participation in loyalty schemes is up from 20% to 24% since the previous quarter, driven by an increase in the 35-54 age range, so there’s definitely a thirst/hunger for them. But do operators understand the return on investment they can bring?

 

We often hear from clients that a loyalty scheme is just “giving money away”, so has a loyalty scheme influenced a customer visit to a pub, bar or restaurant? Almost a quarter (23%) of the people that KAM spoke to said “yes”, and 85% of all customers would use a loyalty scheme if it was available. Not exactly giving away money, I think you’ll agree.

 

But, just like post-visit contact, loyalty clubs need to be personalised to the customer. Understanding what the individual wants and delivering accordingly will drive visits, dwell time and spend. For example, as alluded to earlier, we conducted a project for a super high-end restaurant group several years ago. Its hypothesis was that its well-off clientele wouldn’t want a loyalty scheme as it all seemed a bit “cheap” (its words, not mine, I’m an absolute demon when it comes to points collecting).

 

What KAM’s research showed was that even the top 1% like a loyalty scheme, it’s just that the way that they like it presented doesn’t include money off and so on. It’s about exclusive access such as invite-only events, and specific drinks or menu items only available to “black card holders”. So, there really is a loyalty scheme for everyone, but you do need to really understand your customers to make it work – and that means following up post visit.

For many of us who benefit from increased trade through the summer months, the beginning of September is a tough time. The kids go back to school, the summer holidays are over and trade takes a dip.

 

I have been reading all the company results that say turnover has held up, but profits over the last year have not. I am reminded that the run from September to Christmas is a key trading period, and it also amounts to nearly a third of the year. Like January, September is a pivotal trading period and is the time to make sure the key business targets are set to achieve the level of profitability we require. 

 

Food and drink gross profit, and what we call operations costs, all need to be well-managed through this period. As, of course, does labour, which I am going to talk a bit more about. My first piece of advice is to spend a decent amount of time getting a good base rota for this time of year, with a cost against it that meets the needs of the business. 

 

For us, ten of the 12 weeks were all within a 15% range, so if we pick the lowest number in that range, we can set a rota that works for each week. This means we can work hard on creating the perfect rota, which focuses on the following areas:

 

Minimum staffing levels: It is too easy to decide that you need three people front of house when two will work better. The same applies in the kitchen. Setting minimum staffing levels for quiet days or quiet times of busier days is one of the most important activities.

 

Manager hours: It is critical that we move away from someone having an administration day. It is much better if we have administration afternoons, where the manager can work lunch, do administration in the afternoon, and then step back to the floor for the early evening until the end of the shift.

 

Slack tasks: We need to determine which tasks can be done within normal working hours and do not need specific hours against them. Kitchen prep is the toughest one, but it is also important to focus on how the staff can do all the closing tasks before the customers leave, saving valuable hours after the business closes.

 

Staffing for peaks: While we might want to focus on costs, it is still essential to ensure we have enough staff on when we are busy. Cutting staff at the wrong times just damages service levels, and thus in the end, sales, which is counterproductive. I am a massive believer that we all need to make sure the peaks of the weeks are well staffed as this is fundamental to growing our business.

 

If we do all these things, we can create an amazing service led by a cost-effective rota. As I have written elsewhere, overstaffing is the enemy of good service, and we all need to ensure we do not creep into overstaffing as sales drop in September. But the great thing about this process is that you can agree a rota, and a cost, with the relevant people for a whole series of weeks, and it should be easy to manage. But what are the management risks?

 

Ground up rotas: It still surprises me how often people write rotas from a blank sheet of paper rather than using a well thought through template. A template rota delivers a lower cost, better service and takes less time to write. The only adjustments then need to be for any events or unusual trading patterns.

 

Managing the costs before the week starts: It is essential that as management teams, we stay on top of this during this period and catch anything early and well before the week starts. The perennial problem with labour is drift, with teams tending to want more to drift back to the old, easier ways. Pressure from teams as to when they want to work is normally the biggest factor, and we need to stay strong and help embed new habits.

 

Adding one on: Many managers can look at the rota for the day they are running and think they are short, either through a misguided belief that service will be better or because they want an easier shift. We must train these people not to do it and really look at how the costs move in the week.

 

Making our business processes work in the long periods of average sales and engineering our businesses to deliver the desired level of profitability at these stages is the way we will improve our profitability as an industry. In the long run, we need an appropriate level of profit to pay down debt, reinvest and to grow.