As the CEO of a predictive analytics company, I have seen first-hand the immense pressure facing the hospitality sector. Staff shortages, rising costs, and the ever-growing need for sustainability are creating a perfect storm that threatens to capsize even the most established businesses.
In this blog we explore how predictive demand forecasting can help businesses effectively navigate these challenges.
The big “4” challenges and the solutions
1. Staff Shortages and Retention:
A staggering 92% of UK hospitality businesses reported staff shortages in Q4 2023, with the situation expected to worsen. (Source: [https://wsta.co.uk/facts-figures/])
Solution: Predictive analytics can help forecast staffing needs based on anticipated occupancy. This allows businesses to schedule more efficiently, avoiding overstaffing during quiet periods and understaffing during peak times. This not only reduces labor costs but also improves employee morale and the overall guest experience.
2. Cost of Living Crisis:
Inflation in the UK hit a 40-year high of 10.5% in December 2023, putting immense pressure on already tight profit margins. (Source: [https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/previousReleases])
Solution: Predictive analytics can help businesses optimise their pricing strategies by taking real-time demand and competitor pricing into account. This allows them to maximise revenue without deterring customers by setting prices that reflect market conditions.
3. Increased Running and Ingredient Costs:
From rising energy bills to higher food prices, businesses are facing significant increases in running and ingredient costs. (Source: [https://www.businessgrowthhub.com/blogs/2024/01/challenges-and-opportunities-for-the-hospitality-sector-in-2024])
Solution: Predictive analytics and predictive demand forecasting can help businesses optimise inventory management by forecasting demand for specific items. This helps in reducing waste and allows businesses to purchase only what they need, leading to lower overall costs.
4. Environmental Considerations:
Consumers are increasingly demanding sustainable practices from businesses, with 78% of UK consumers willing to pay more for sustainable travel and accommodation options. (Source: [https://www.ukhospitality.org.uk/2146-2/])
Solution: Predictive analytics can help businesses optimise energy consumption by forecasting occupancy and room usage. This allows them to implement energy-saving measures more effectively, such as adjusting heating and cooling based on real-time needs. This not only benefits the environment but also helps to reduce energy costs.
Conclusion
In conclusion, the UK hospitality sector is facing a complex landscape in 2024. However, by embracing predictive demand forecasting, businesses can gain valuable insights and make data-driven decisions to navigate these challenges and emerge stronger.
By optimising staffing, pricing, inventory management, and energy consumption, businesses can not only lower operating costs and improve efficiency but also enhance their sustainability and attract environmentally conscious consumers.
Predictive analytics is a powerful tool that can help the hospitality sector weather the storm and chart a course towards success in today’s dynamic market.
Investing in the Future:
Implementing a predictive analytics solution (predictive demand forecasting) might seem like an additional expense at a time when cost reduction is crucial. However, consider it an investment in the future of your business. This technology can be the difference between struggling to survive and thriving in a competitive and ever-changing landscape.
At Predyktable we understand the unique challenges faced by the hospitality industry, and we are committed to providing solutions that are affordable, easy to implement, and impactful. We offer a variety of flexible options to cater to different business needs and budgets.