Subjects: It’s complicated, service charge is a tax – let’s stop pretending and fix tipping, the death of Dry January, still an appetite for vegetable-based cuisine
Authors: Katherine Doggrell, Gary Digby, Phil Mellows, Glynn Davis
It’s complicated by Katherine Doggrell
As fans of Mr Benn will tell you, a career is just about putting on the appropriate costume, packing your sandwich and hopping on to public transport. The French word for suit is even “costume”, as those who admired president Macron’s shades at Davos can attest.
Once you’ve costumed up and entered your industry of choice, it gets a bit more nuanced. When Mr Benn put on the chef’s hat and immediately graduated to serving the king, he didn’t get too much grief about plate cost or local sourcing. But once you look under the hood, complexities abound.
It’s increasingly apparent that the government is more Mr Benn and less detail. Even watching a few episodes of Bake Off might help. Or, for hotels, a season or two of Downton Abbey. The announcement of the recent and much dragged-out assistance for pubs ground under the heel of business rates illustrated the issue.
For the government, the pub is somewhere the Queen Mother pulled a pint once, and where miners go to have a warm pint and some pork scratchings after a hard day down the pit – probably without washing their grimy faces, certainly without changing out of their honest working man’s overalls. These miners vote and they pay taxes; they must not be irritated.
The reality of the package for pubs announced by chancellor Rachel Reeves has been covered elsewhere in these pages, so it is enough to quote John Webber, head of business rates at Colliers, who called it “a sticking plaster”. As everyone wearing a pub costume will tell you, the last thing you want floating around your venue unattended is a sticking plaster.
For restaurants and hotels, there was no reprieve. What there was instead was the admission that hotels are too complicated to deal with right now, thank you. The government is “reviewing how hotels are valued for business rates following concerns expressed”. Hotels valuations are undertaken in a different way to some other sectors.
The government is talking to valuation experts (government contract incoming for valuation experts) about which way is up in hotels, but with the next revaluation in 2029, that’s three years of talking. The average hotels business rates bill will increase by 115% by April 2029, totalling £205,200, according to analysis of Valuation Office Agency (VOA) data by the UKHospitality. Here in hotel land, we know the sector is a long-term play, but 115% is hard to sell into your investors.
What do they have to talk about? Webber said: “The VOA is supposed to be using the receipts and expenditure (R&E) method of valuation, but in reality, it uses a shortened method that appears to ignore the ‘E’. These valuations don’t seem to be taking into account that the costs for hotels have gone up considerably – even if their turnover is higher. The whole system is flawed.”
Webber’s colleague, Aurora Denyer, associate director of rating at Colliers, agrees: “It’s not that the R&E is the wrong methodology, but that the shorthand method that is being used for hotels in 2026 is no longer producing as accurate results that would or should be achieved from the full method. When calculating hotel rates valuations, the shorthand method applies a percentage to the turnover; and is based on a variety of factors and a category the hotel has been placed in. Ideally, it should incorporate all expenses and the fair income for the operator.”
The VOA’s categories take the place of assessing each individual hotel. They are, for example: a budget hotel in Central London, a standard hotel in a seaside town or a luxury hotel in the countryside. As Denyer says: “We are concerned it has not gathered a wide or representative enough sample to get accurate percentages for benchmarks.”
And Denyer is correct, because no two hotels are alike; even those with the most rigorous of branding may have a renegade general manager who has done a delivery deal with Uber. The solution appears to be to celebrate that we are all special snowflakes, and everyone in the hotel sector can get on board with that.
Our sector loves a brand but hates a cookie cutter. Our guests want consistency, but an individual experience. And yes, that sounds traumatic for operations, but really, it’s just about having the right foundations that allow for consistency, with those memorable personalisations on top. And if we can deliver that, with our 24/7 schedules, it must be possible.
Will the government strip the system back to its constituent parts and, to quote one of its favourite slogans, “build back better”? Or will it be a case of Mr Benn getting out his medical bag and sticking plasters?
Katherine Doggrell is Propel’s editorial advisor. his article first appeared in Propel Premium, which is sent to Premium subscribers every Friday. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £995 plus VAT – whether they are an operator or a supplier. The single subscription rate is £495 plus VAT for operators and £595 plus VAT for suppliers. Email kai.kirkman@propelinfo.com to upgrade your subscription.
Service charge is a tax – let’s stop pretending and fix tipping by Gary Digby
Every operator in hospitality obsesses over the welcome. The room. The food. The theatre of it all. And then we hand the guest a bill with a compulsory charge on it and wonder why the ending feels flat. The last moment of every dining experience is not the dessert; it is the bill. And right now, across most of the UK, that moment feels like a tax.
Service charge has become a levy. It says discretionary, but it never feels discretionary. Removing it means a conversation nobody wants to have. Never mind when it comes to large parties; most people would rather swallow it than sit in the awkwardness. The whole thing leans on social friction, and everyone in the sector knows it.
We just don't say it out loud, because the current model is convenient. We keep it because it is cheaper labour subsidy dressed up as guest generosity. Let's be honest; that is what it actually is.
We did not set out to build it this way. Labour costs climbed, margins got squeezed, menu pricing did not keep up, and service charge became the pressure valve. Pragmatic. But somewhere along the way, we broke the link between excellence and reward. And worse, we sometime poison the last impression we leave with every single guest.
We spend thousands on interiors, training, product and marketing. Then, the final 30 seconds is the guest either paying a charge they quietly resent or asking for it to be removed and leaving in discomfort. They came in for hospitality; they left negotiating a contract.
From the team side, the psychology is just as broken. If service charge is baked into expected income, it is not a reward; it is rent. You cannot tell someone it is a tip and then build their life around it.
And here is where it gets worse. Service standards across the UK have dropped. That is not opinion. Anyone working in this sector can feel it. We lost experienced people during covid. Brexit thinned the labour pool further. The teams we have now are younger, greener, harder to recruit and harder to retain. Service charge does nothing to fix that. It just lands in the pay packet like everything else.
But tipping could fix it. Real tipping. If we designed it properly. A genuine tipping culture does something service charge never will. It creates a visible, immediate connection between how someone performs and what they earn. That is a motivation system. That is a retention tool. That is how you build pride in a team that is still learning the craft. When a new starter sees that the best people on the floor take home more because guests genuinely want to reward them, that changes behaviour faster than any training manual.
So, if we want to rebuild service standards and shift the culture, we need to stop messing about. Saying it is discretionary on the bill and then building your wage model around it is not transparency; it is theatre. Guests are not daft.
This is where the US gets one thing right, even though the wider system is a mess. Tipping is normalised as gratitude. Frictionless. You add it without a conversation and skip it without judgement. We can borrow that without importing the dependency. Tips should never be the base wage; they should be the upside.
Fair pay is fair pay. Service fees support stable income, distributed transparently. One line on the menu, one line on the bill, say where it goes. Then tipping becomes what it should always have been. Voluntary. Earned. Meaningful.
But we have to meet that halfway. If your team can't tell you what your standard of service actually is, you do not have one. And if you do not have one, you are charging 12.5% for nothing in particular.
Coach the standard every day. Praise it publicly. Make brilliance visible. And stop hiding the tip pool in a spreadsheet nobody understands.
We have been trying to make one pot of money do two jobs. Wages and applause. That is why guests treat it like a tax, and teams stop treating it like a reward.
Fees fund fairness; tips reward brilliance. Get this right and we do not just fix the bill; we fix the culture. Guests leave generous, not taxed. Teams feel recognised, not entitled. We see service standards raise.
And that final moment, the one we currently waste on awkwardness, becomes the one they remember. We built this system for survival. It served its purpose. Now we can do better.
Gary Digby is the founder of fractional fixer Digby+Fox Hospitality
The death of Dry January by Phil Mellows
It was already noticeable that there was less noise around Dry January this year. A fair bit of no and low alcohol promotion perhaps, but not so much celebration of abstention, more getting over the first of February finishing line without a drink. And now, some solid signs are coming through that the fad may have peaked.
The Isle of Wight Distillery, producer of Mermaid Gin, commissioned research among more than 2,000 adults that suggests most had gone back to the booze by mid-month. That’s backed up by my random anecdotal evidence from the pub frontline, where licensees have been pleasantly surprised at how quickly trade picked up after the new year slump.
And a report from Waitrose has confirmed the trend, with wine sales at the supermarket resuming strong growth as early as January 12. It all prompted The Guardian to ask: “Is the age of abstinence coming to an end?”
Don’t get too excited. That may be over-egging the egg-nog, or possibly the pastry stout. But it’s reasonable to detect a shift in consumer behaviour that’s in line with other things we know.
There is, for instance, broad agreement that falling alcohol consumption is now driven largely by people cutting down rather than cutting out the booze completely. And it happens all year round. Mindful drinking is not just for after Christmas.
And once you’ve got into the habit of moderation, Dry January loses its relevance. In fact, it might seem a little silly to stop drinking for one month then go at it hammer-and-tongs for the next 11 months.
It was always the hope of health campaigners, of course, that having got a taste of the benefits of going alcohol free, people would continue to abstain – and I’m sure that happens in some cases. But what we’re seeing is a much broader population-wide change in the way we approach alcohol.
Pubs will be pleased if Dry January does stop being a ‘thing’ at a time of year which, for many, is about simply crawling your way through the gloom to slightly sunlit uplands of February. Or, more likely, March.
Unless you can do something for Valentine’s Day, that is. But that’s not really a pub opportunity, is it? Pubs don’t do intimacy very well. Not enough tables for two. Not enough space between the tables. Pubs are more polyamorous. Now there’s an idea for an event. I’ll leave it with you.
Anyway, I’ve always thought miserable, dull January is quite the worst time of year to stop having a pint down the pub, just when you most need a bit of conviviality and perhaps even a roaring fire to make you feel warm about the world.
Yet this year, I’ve noted more pubs shrinking their opening hours, even closing their doors for a week or two to reduce costs during a period they would reasonably argue is going to be quiet anyway. And the government’s behaviour has only exacerbated that, of course.
I’ve also seen that hospitality businesses that have gone on the offensive with bounce-back deals and other January promotions have seen positive results. Perhaps people don’t need too much of an excuse to give themselves a treat at this time of year. Especially after they’ve been so ‘good’ to their bodies and wallets for all of 11 tiresome days.
But it’s almost like every pub visit is like that for the majority. Those of us who habitually pop out for a pint every day are dwindling in number and have been for a long time.
The death of Dry January may not mean much unless operators grasp its underlying cause – people are developing a more thoughtful approach to going out. They don’t need someone to tell them not to drink in January, they don’t need to be sponsored, they are perfectly able to manage their consumption through the year.
And that also means they’re looking for a good reason to go out for a drink. That need not involve an elaborate event, it might just be a chance to catch up with friends, but where they choose to do that could depend on the environment and offer that you can create.
There’s nothing new or particularly insightful in that conclusion. I’m wondering why I even mention it. But I suppose I think that it’s a positive thing – rather than serious drinking it’s taking drinking seriously, finding it important enough to make conscious decisions about it.
And those who make their living from selling drink and giving people a good time have to get their heads around that.
Phil Mellows is a leading industry commentator
Still an appetite for vegetable-based cuisine by Glynn Davis
Puraan is a small, family-owned Indian restaurant that serves up great value, tasty food in a friendly atmosphere just down the road from my house, so it’s been a favourite of my family’s for some years.
It’s also vegetarian. But that’s of little interest to me, because all the elements described above ultimately override the fact that it does not serve meat. Like roughly 97% of the population I’m not vegetarian – although I tend to eat only modest amounts of meat – and choose my restaurant visits based on the taste of the cuisine and the service/environment.
Over recent years, growing numbers of people have played around with eating more of a plant-based diet – sucked in by a desire for a healthier and more eco-friendly lifestyle. Sadly, this fuelled an influx of money supporting the creation of meat-mimicking products, with investment going into the production of things like fake burgers and sausages. Alongside this was funding for restaurant concepts whose menus were predominantly filled with dishes seeking to replicate meat through the use of odd plant-based ingredients that nobody had ever heard of.
These dishes have since been given the tag of ultra-processed foods (UPF), and nobody likes the idea of those. This has prompted McDonald’s to seriously strip back its vegetarian options to leave only the McPlant Burger, and Wagamama has culled various non-meat dishes from its menu. The lack of appetite for processed foods has also led to something of a car crash in the hospitality sector for many concepts including Ready Burger, The Vurger Co, Neat Burger and Wulf & Lamb.
Sadly, in the slipstream of these failures has been the closure of some genuine vegetarian restaurants that celebrated the vegetable such as Stem & Glory. Despite the tough backdrop, the market is arguably ripe for a new wave of vegetarian restaurants that elevate vegetables and plants through their natural characteristics rather than contorting them into some fake meat creation.
Among the new generation of such restaurants is Bubala, which operates from three sites and has two more units in the pipeline. Founder Marc Summers is not vegetarian and has not sought to create restaurants that cater for vegetarians. It’s wholly about building places with tasty food, which is no doubt why more than 75% of his customers are neither vegetarian nor vegan. “If they’ve had a meal with us and not realised there was no meat then it’s worked – customers are not going for a vegetarian meal, they are going for a nice meal,” he suggests.
Many of the chefs working across the Bubala sites are also meat eaters, with some having initially having reservations about cooking purely with vegetables, but they soon came to recognise it involves a high degree of creativity. This has proven attractive to many chefs who enjoy the complexity that often comes with this cuisine. Although it is prep-heavy, Summers says many dishes can be produced at scale and a major upside is the much better gross profit than can be achieved with non-meat dishes.
This approach has long been recognised by pioneering plant-based restaurant Terre a Terre in Brighton, which has been ploughing the furrow for vegetables since 1993 and represents something of an inspiration to newcomers like Summers. Another long-established presence in the field is Mildreds Restaurant Group – which operates the Mildreds and Mallow brands and which does currently have some meat-aping dishes on its menus – but the company has recognised a change in the market.
Sam Anstey, managing director of Mildreds Restaurant Group, says: “The plant-based category has become more sophisticated. Consumer preferences are shifting away from processed alternatives and towards healthy, plant-forward nutritious options.”
If there is any doubt about the appetite for vegetable-based cuisine, then consider Plates in London’s Old Street, which last year became the first plant-based restaurant in the UK to earn a Michelin Star. The place’s ethos is based on giving vegetables the respect they deserve. And if you think that’s a load of old waffle then give the food a try. If you can get in the place that is – as it’s always solidly booked up for months in advance.
Glynn Davis is a leading commentator on retail trends