hotelvak.be
EN
Platform on hotel management, interior design and design in Flanders
Almost half of the Flemish hospitality businesses saw their profits fall over the past six months, even as sales remained unchanged. The biggest pressure comes not from energy or raw materials, but from labor costs. As a result, opening an additional location is no longer on the plans of almost no one. This is evident from the Koplopers barometer by Strobbo, maker of planning software for the hospitality industry, in collaboration with Foodservice Alliance, among 219 hospitality entrepreneurs.
Almost half of the hospitality entrepreneurs saw their profits drop compared to last year, even for businesses that generated the same amount of revenue. A business can therefore sell just as much as before and still have less left over. Guests spend less per visit or come less often, and entrepreneurs have little room to pass on higher costs. Interestingly, almost no one sees a shift towards takeout or delivery. The customer still comes, but keeps their hands off.
The pressure comes mainly from the wage costs. Two out of three operators cite these as their biggest burden, much more often than energy or raw materials. Looking ahead, they also see wage costs as the biggest threat to the sector, even before customer purchasing power. Therefore, they seek growth through better margins, not through opening another store: only one in five still wants to grow.
“Many managers are stuck. It’s almost impossible to pass on higher costs, because customers will simply leave. A good turnover is no longer a guarantee of profit. They can hardly change the wage costs, but they can change the number of hours they work.” - Nick Geys, co-founder of Strobbo
The margin squeeze is not a problem specific to one type of business. In the restaurants, the largest group in the survey, half saw their profits decline. This was even true for two out of three of the respondents in the fast food and lunch restaurants. How the pressure manifests itself varies: in restaurants, fewer and fewer customers come, while elsewhere they spend less per visit. Cafés are the exception. There too, profits are under pressure, but well over half of the café owners still enjoy their business (much) thoroughly. In the fast food restaurants, that is barely one in five.
Not everyone is seeing a decline: more than one in five restaurants saw their profits increase. Those businesses also attract more customers, but that doesn’t make the job any easier. They are feeling the cost of labor even more acutely, because more guests means more hours. Their biggest concern is shifting from margin to staffing: hiring the right people at the right time.
What stands out is the entrepreneur himself. Behind the numbers are mainly small, independent businesses: almost eight out of ten respondents have one business, and almost all of them are either owners or managers themselves. They bear the pressure personally. A quarter does not spend most of their time dealing with guests or staff, but with administration. Those who do better enjoy their business more than twice as often and look ahead to growth more often.
“What touches us most is pleasure. Among those who are going backwards, not a third of them have any pleasure in doing business. Anyone who wants to keep their business healthy must also keep themselves healthy.” - Nick Geys, co-founder of Strobbo
When asked what urgently needs to be changed to make the hospitality industry healthier, six out of ten owners ask for lower labor costs or a lower VAT rate. In the case of VAT, it often comes down to the rate for soft drinks and other non-alcoholic beverages. A quarter asks for less paperwork and simpler, more stable regulations. A level playing field with pop-up bars and B&Bs and lower commission rates from ordering platforms also come up. Strobbo and his partners present those questions without taking a position on them themselves.
The research yields three lessons. Don’t just look at revenue; even with stable sales, margins can melt away. Plan for the crowds that are expected in advance, rather than trying to accommodate them at the last minute. And don’t forget the entrepreneur himself: in small businesses, mental pressure weighs the heaviest, and those who no longer enjoy their business find it harder to stay healthy.
“The businesses that are doing better don’t have fewer worries, but different ones. They’re not wondering about which costs they can cut, but how to get enough people on the floor when things are busy. That’s a luxury problem, but one that you have to solve.” – Nick Geys, co-founder of Strobbo
