At last, the budget cycle is over, the holidays have passed and we are sick of making predictions, but not so fast on the prediction of no more predictions!
When looking at year over year growth, 2010 will end positively on the lodging side and most of that is due to occupancy increases, not rate. From a lot of restaurants perspectives, that is good news because these travelers need to eat. Finally we are seeing early signs of what we have really missed…the expense account. Granted, it’s still being watched and scrutinized, but it is being recognized as a necessary business expense for customers and for traveling employees. They stay at the beginning of wine list and the middle of the menu pricing, but they are out and buying. Signs of hope at last!
Restaurateurs need to be cautious on how they massage their menus for price and content in the wake of this economic enthusiasm. There is real pressure from suppliers to move prices, and with the predictions on gas prices, there will be increased fuel costs, drop charges, and tried and true excuses for moving your costs upward. The customer is not ready for noticeable price increases and you will serve your own interests well by staying focused on volume, value, and relationships.
The restaurant business remains a low margin, high volume game and will be so throughout 2011. Between the negatives of what state and national politics have bombard us with as they wrestle with incredible challenges and the increased focus on DWI’s and other alcohol related issues, full service restaurants and bars must prevent the customer from wanting to stay home. Look at opportunities for new trial of your restaurant by producing affordable, value added events and specials on top of maintaining your base brand and quality.
It will be a better year for those that don’t take anything for granted, who love their customers, who are genuine in their hospitality and who are creative. Happy New Year!