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  • Stephan Busch

2023 the positive prospects for hospitality

Updated: Jan 14

What can be expected positively? The last 3 years have been tough enough and reading the news doesn't make it look better. That's why you shouldn't simply skip over every headline that only suggests something positive. Here some of them.

Local industry representatives still advise optimism.

The last year was quite good, but the next will be bad - that's how the mood in the hospitality industry can be described. Local industry representatives still advise optimism.

January 5th, 2023, Andre Fesser, Weser Kurier

The headline has been positive. It is the conclusion from the author's text, which is expected to be bad next year. How do you come up with something like that? Nevertheless, one advises optimism. Understood!

The same author follows up and quotes a restaurateur that makes just as much sense.

Restaurateur Rohdenburg from Lilienthal is now giving his industry colleagues more confidence: the current situation will also be overcome. It is also important to demonstrate honesty and to speak openly with the guests about the staffing situation or pricing. According to his experience, the guests were open to such tips. On the other hand, burdening them with problems and pessimism is the wrong approach: According to Rohdenburg, people don't want to hear something like that.

January 5th, 2023, Andre Fesser, Weser Kurier

So honesty! Talking openly about the bad staff situation and the sharply increased prices, but not feeling pessimism? That will certainly be an elegant balancing act.

Since, as has been learned, one still relies on optimism, the next news should not frighten us.

41,000 shops have had to close since the pandemic began

Only the Corona lockdowns now high energy prices. In the past 3 years, on average, almost three times as many retailers have had to give up as never before

14.12.2022. time

Investment banker Claus Ruppel estimates that 300,000 companies will go bankrupt and leave Germany by the end of 2023. Even if they only have three employees on average, that would be almost 1 million unemployed people who no longer come to lunch, buy coffee on the way to work or meet up with colleagues in the pub in the evening.

If you now read between the lines a little, then there are still tentative optimistic indications.

• Producer prices: According to the Federal Statistical Office, prices in business between companies rose by a whopping 45.8 percent in September 2022 compared to the previous year. (That was just the introduction, the positive part will surely come soon)

• Wage-price spiral: The minimum wage rose to 12 euros per hour in October (inflation is higher, so this is a wage cut if you look at real wages). For many low-wage sectors such as hospitality, this means an increase in personnel costs of more than 20 percent since the beginning of 2022.

• Cost reduction: Reduced opening hours, less service and colder rooms are currently in vogue, but also dangerous if guests stay away as a result.

(Honestly? No service, rarely open and then still cold? That's an invitation!)

Pricing Policy: Increased prices must be passed on to guests. There's no way around it. The time for this is propitious. Good arguments, psychological price tricks and new price models such as flat rates (e.g. Espresso House) can help. Jan 2023

Is the time good for this? What do people smoke who write something like this? No one has more money, but the time for price increases is good! Psychological price tricks? Should you put the guests in full hypnosis?

And then Noma closes too.

The best restaurant in the world? Should that give us food for thought or limit our optimism a little? Better not!

"It's not sustainable," he (Redzepi, the owner) said of the modern gourmet model he helped create. "Financially and emotionally, as an employer and as a person, it just doesn't work.”

But the kitchen culture at Noma didn't always live up to the ideals it projected. In interviews, dozens of people who worked at Noma between 2008 and 2021 said 16-hour workdays are now routine, even for unpaid workers. (Nice that even unpaid workers work 16 hours?)

And then there are the energy prices.

»Germany now has the highest energy prices in the world because of the Russian gas ban. They are eight times higher than in the USA.

For every fifth company, the increases are 100 percent or more. In individual cases, the prices would even be increased by a factor of six to ten

SPON 09/08/2022

And then we come to the winners:

The winners are the systemers, chains and gastro groups. Individual gastronomy, loved for its uniqueness, variety and cheerfulness, continues to be hit hard. (So ​​diversity - actually our culture - is sacrificed to the gastronomy system - it has already happened).

Gastronomy in transition:

Prices have been raised and will continue to rise.

Concepts have been revised: simpler, more digital, with a sharper profile.

More and more restaurateurs are discovering new areas, such as organically certified daycare (note: that's a special field, isn't it?), company restaurants (note: except for those companies that have disappeared from the market), online trade.

Profitability is what counts in the end: Profit first, i.e. profit before sales.

Aghz January 27, 2023

Winners are systemers? Fast food, rubbish is what we can still afford in the future and what is still on offer?

So diversity - actually our culture - is sacrificed for the gastronomy system - it has already happened.

Profit first – profit before sales? That's wisdom.

And a few more predictions in which I was looking for the positive:

The problem of underpayment/wage theft has not gone away.

The sudden unemployment of hundreds of thousands of workers will put people off the industry in the future and encourage them to look for safer options.

The longer the pandemic lasts, the more time people - often the best and brightest - have to reskill in other industries

By 2023 we could see:

Food is less manipulated and processed; of course, this will come at a high cost

The taste becomes easier as more people cook for themselves and discover old family recipes

Customer service, the set of transaction-based activities, will be resolutely old-fashioned as the customer experience becomes critical to building relationships that happen even when there is no direct customer contact

What will hospitality look like in 2023? - Meta Management January 2023

The headlines may sometimes seem positive, but the content makes you doubt. Best to say it with Oscar Wild: “Everything will be fine in the end. And if it doesn't turn out well, it's not the end”.

Stephan Busch has an invaluable and diverse experience in the hospitality industry ranging from senior management positions with the most renowned hotel and resort companies to the project development - launch of operations, business development- for hotel and cruise companies in Asia, Europe, Canada and Russia.

His expertise includes not only planning, opening and operating of hotels, international golf clubs, airports, resorts and cruise ships, but also successful restructuring and repositioning of businesses during the financial crisis in Asia.

Stephan Busch earned his Master Certificate in Hospitality Management from Cornell University, USA and served many years as Academic Director / Faculty of Hospitality & Tourism at the State University for Humanities RGGU Moscow as well as the Swiss International University St. Petersburg.

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