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How to Navigate the New Era of Hospitality

Research report exploring what hospitality operators need to un-learn, learn and do in order to transform and deliver new experiences.

Welcome

“What do hospitality operators need to unlearn, learn and do in order to transform and deliver the experience customers and employees are demanding?”

This White Paper sets out to answer that question.

Our aim is to inspire leaders on how to build a better, stronger and more resilient hospitality business. Together with Bizimply, we have been on a journeyover the last 6 months to learn what pioneering hospitality leaders, seasoned experts and maverick operators across the globe are doing to meet those demands. We followed the trail of breadcrumbs to understand how they are turning challenges into opportunities for the survival and success of their business and the people who work for them.

This report shares key learnings from the frontline and distils these insights into tactical and strategic changes that you can adopt and adapt to suit your own hospitality business.

  1. How the playbook for hospitality has changed forever and continues to evolve
  2. The actions you need to take to overcome the biggest obstacles holding your business back
  3. Game-changing solutions to help you execute realistic strategies and impactful tactics

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A New Era for Hospitality

It has been a brutal couple of years for global hospitality. The uphill struggle to run a business at break-even whilst navigating lockdowns, furloughs, closures, changing COVID protocols, customer concerns, staff wellbeing, your own anxiety and a slew of never-before-seen daily challenges shows no sign of letting up. The pandemic tore through common operational practise and conventional wisdom in days and weeks instead of years and decades.

Some businesses are buckling under the pressure, others have gone the way of the dinosaurs and a core of stubborn visionaries are doubling down on their efforts to adapt and survive.

Let’s be honest, the writing was on the wall way before the pandemic hit. Discerning travellers, diners and guests were becoming disenchanted with soulless customer experiences and a service that was skewed in favour of the business’ bottom line.

Decades ago, waves of change and complexity began a steady assault inside and outside the hospitality industry. From hotels to restaurants, big to boutique brands, luxury outposts to modest operations – not one escaped unscathed.

Hospitality organisations that resisted, reacted by either sticking their heads in the sand or adding more layers to company structures, increasing standardisation and rules in failed attempts to stem the tide of change.

During the pandemic, customers quickly adapted. With frightening speed and less resistance than imagined, they adopted, albeit reluctantly in some cases, different and alternative channels to interact with hospitality businesses. Hospitality leaders could do well by following their customers’ lead in adapting behaviour and embracing change.

Digitalisation is a help, but not a cure. The human factor (your customers, employees and suppliers) continues to beat technology as one of the most reliable ways to differentiate your business and stand out in a crowded and ever changing market.

These changes are here to stay! Forward thinking operators across the globe are adapting to this seismic shift by looking for new ways to create ‘difference’ and ride the changes of a rapidly advancing future of hospitality.

To create this difference, hospitality leaders need to throw out old conventional mindsets – and replace them with a creative and branded approach that combines ingenious ways to find, nurture, incentivise people to connect with and help your business survive and thrive.

But first, we need to step out of reactive mode and take stock of the situation and look at some of the data we collected.

These sorts of responses have helped to saturate the market with clunky systems, unmanageable operations and cookie-cutter experiences for which customers are losing their appetite and employees have a stomach full.

Today’s hospitality workers expect more from their employers in terms of job roles, compensation, training and autonomy, work culture, values and how the company contributes to making the world a better place. They are not afraid to blow the whistle on toxic cultures and leaders whose behaviours do not match the company’s values.

Customer tastes are changing in terms of how they want to be served, the speed and pace of the experience, what they eat, the providence of food and rising consciousness about how the business treats employees and the communities in which they do business.

Many customers are emerging from COVID-fog of lockdowns and isolation wiser and super-savvy, unwilling to settle for anything less than demonstrable value for money. They expect their hospitality experiences to be customisable, frictionless and infused with humanity.

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What We Learned from the Data

We surveyed and interviewed senior operators representing hundreds of outlets, employing thousands of staff, in the UK, Europe and the USA. Respondents came from across the hospitality sector, from fine dining and hotels to pubs and bars, coffee shops and fast-food outlets.

The survey questions asked about the reality and challenges of day to day operations now and in the near future, plans for change (including further digitisation) and the enablers and barriers for dealing with these challenges.

Challenge 1: Staffing

The data showed that the biggest headache to operations in the coming 12 months continues to be staffing to meet operational needs, which came as no surprise.

Follow up interviews with respondents confirmed labour market challenges that make it hard to recruit enough people, attract individuals with the right values and attitude, and also to retain them.

Staffing challenges and high turnover cause ripple effects in other critical areas of the operation:

  • Team performance challenges because of new employees taking time to get up to speed with a proper induction
  • Challenges with team cohesion
  • Cost of training
  • Gaps in the work schedules lead to badly run shifts, even more pressure on existing team members, and potentially even more turnover
  • Without enough staff (and the right ones), hospitality businesses simply can’t meet customer demand and may end up turning away business or with reduced opening hours.

When asked what new or additional steps they were taking to recruit and retain employees, the following were the most common steps shared survey by participants:

  • increasing training and development (32%),
  • increasing pay (21%) and
  • improving benefits (10%).

Beyond this,

  • 21% of respondents stated they were taking no additional steps at all
  • 11% were offering new working patterns (such as 4 day weeks) and
  • 13% were trying new approaches to recruitment (e.g. referral payments, new recruitment websites).

In addition, only a few respondents were taking a wider range of steps to meet the staffing crisis, such as guaranteeing PPE supplies, wellbeing initiatives, focusing on improving work culture, targeting new groups and different talent tools for hire, having more team events, launching a new organisation strategy with people at its core The trend is that training, pay and benefits will stop being points of differentiation. Furthermore, the myriad of other initiatives being touted suggests that there is no clear plan of how to tackle staffing challenges using a dedicated strategy with clear policies supporting people practices as a point of differentiation.

CHALLENGE 2: Capability Gaps

Analysis of the data identified another, unexpected challenge -critical capability gaps in different areas and levels within the organisation. When asked about the most significant obstacles being faced, some clear themes emerged:

I) Management and leadership capability:

  • 46% of responses identified management and leadership capability gaps as the most significant challenges. This overall figure is comprised of:
    • front line manager capability (22%),
    • leadership capability (15%) and
    • mid manager capability (9%).

Although no group emerges as ‘the problem’, the spread of responses across these three levels of the hierarchy points to managerial ‘blockages’ across several organisations. II) Core change capability gaps:

  • 28% of responses related to gaps in core skills required for successful implementation of change and of those core skills:
    • strategic capability (13% of responses) and
    • effective implementation of change (15%).

This means that in addition to struggling for the right numbers of staff with the right skills (capacity), there are critical capability gaps that impact hospitality organisations’ ability to meet the demands of the operation and implement change.

“Bizimply also gives us an instant view of how we’re doing on sales by restaurant and labour hours, 

and helps us to forecast upcoming needs.”

CHALLENGE 3: Cultural Factors

The most significant barriers to implementing change in operations are cultural factors.

  • Overall: 34% of all survey respondents named change resistance as a significant barrier, and
  • 17% of all respondents named organisational culture in general as well or instead.

In contrast, 53% foresee that technology to automate processes would have the biggest positive impact on their operations. Yet people factors (staffing -capacity and capability issues, and culture) are significant barriers that pose a challenge to address.

CHALLENGE 4: Lack of a People Strategy

  • Only 28% of respondents reported having a formal people strategy, and
  • just 21% said they were ‘very confident’ in the capability of their HR function to create business impact.

Given that ‘People Problems’ is reported as the #1 challenge faced by business leaders having an adverse impact on the implementation of any enhancements and changes to the operation, it is no longer an option to manage ‘people’ as an administrative add-on, human capital or depreciating asset. The rapidly changing industry terrain calls for a fresh and flexible strategic approach to address the significant ‘People Problems’ raised in this survey and report.

CHALLENGE 5: Barriers to Change – Especially Digital

Before we look at the data, let us recap why the impact of digital on hospitality is a particular issue. We have already mentioned that digital tools have evolved from being nice-to-have to essential for operational interfacing and building a bridge between remote and in-person employee and customer interactions with the business.

Digital capability and readiness lie at the heart of many of the changes that are underway and ahead for the industry. It is one of the key levers to creating operational efficiency and capability and by extension will have an effect on the survival of many hospitality businesses. Therefore, the capability and capacity of leaders to embrace the change that is happening, implement digital tools and embed them seamlessly in the operation, will undoubtedly influence the chances to achieve a Return On Investment and turnaround the business.

So what did the data tell us?

The three top challenges implementing digital strategy are;

  1. Capability issues
  2. Buy-in (as in change acceptance/support)
  3. Cost

Barrier reasons include capability gaps, pressure for immediate implementation without the capacity to execute, the weak infrastructure around internal communications, overlooking the impact of the human aspect of change to sustain this continuous improvement and implementation.

36% of organisations reported that there was no one with overall responsibility for digitisation. Amongst those who do have an ‘appointed’ person, there was no consistency. Responsibility varied between IT, the Founder, Front Line Managers, Operations Director, CEO.

The absence of a plan for how to approach the implementation of digital change, and a dedicated person or team with the authority, resources and capability to run with this, will only become a more pressing burden.

The survey findings revealed another potential pain point. Only half of all respondents reported having a formalised and documented integrated operations strategy in response to COVID-19. And only 13% said that their people know the 12-month plan for the business.

CHALLENGE 6: Funding as a Challenge

It is also interesting to note that funding emerged as a challenge:

  • 30% of respondents identified capital and funding as a significant barrier to change implementation
  • 28% identified cost and funding related issues as the biggest obstacle to implementing a digital strategy in their business (such as capital and initial operational costs), and
  • Just over half (55%) agreed that their organisation had invested enough in digitisation

Whilst funding is an ever-present factor, there are other fundamentals which require priority attention in order to weather this storm.

Fix The Fundamentals First

By now, you have probably started to form some of your own ideas about how these challenges show up in your own organisation. It is imperative to turn those ideas into action. And for that, you’ll need to identify your tactical and strategic priorities:

  • Tactical: because there are a number of short-term, burning issues that need fixing first
  • Strategic: because beyond the burning platform, differentiation is going to demand medium and long term focus and effort

This is an industry that has over-relied on reacting to short-term issues and glorifying fire-fighting. Achieving strategic priorities will require a shift in mindset and approach in order to thrive in the new era of hospitality. And the survey data showed a strong consensus about some of the strategic priorities that would most impact operations. For example;

  • More automation through technology (53%)
  • Devolving decision-making power to front line employees and managers (40%) and more data and information transparency at all levels of the organisation (36%) representing a big cultural shift
  • Less time on meetings and admin (36%), which creates time, focus and opportunity for different ways of working, and overall, 
  • Working with more agile approaches (49%).

Agile hospitality is the golden thread in this white paper. Agile leaders maximise time, energy, resources by managing their teams to focus on executing tactical (foundational) activities whilst planning strategic (differentiating plans) simultaneously. 

The missteps and wins in the tactical operation create the learning to inform a robust yet flexible strategy.  This non-linear approach allows leaders to create a living plan that can flex between immediate tactical response (e.g. suddenly issued COVID protocols), capitalisation of new possibilities and incremental improvement.

 It’s quite a journey – and taking steps to truly understand any issues that your organisation is facing around staffing and people strategy, and implementing change, are the first steps in the right direction.

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“The trend towards digital and contactless services has gained new momentum since 2020. .”

The Need For Agile Hospitality

So how can organisations start transitioning to agile hospitality?

The survey data has helped to shine a light on several challenges embedded deep in many hospitality organisations. As the introduction to this report outlines, the hospitality sector has been met by multiple threats and challenges over recent years. Organisational cultures, rigid orthodox practises having evolved into the status quo which now risk inhibiting desperately needed change.

For example, many are still caught up in the industrial mindset of top-down and command and control leadership, of knee-jerk reactions to the red boxes on that week’s dashboard, of treating frontline employees like units of labour on the spreadsheet, or of seeing suppliers and customers as cogs in a machine. Whilst revenue, operational efficiencies and year on year growth are important metrics for a viable business; pursuing them at all costs, disconnected from purpose-led values has led to shortcuts in the wrong areas and allowed questionable business practices to take root in some organisations.

As well as the challenges in running operations, pressing and urgent shifts in changes in the external environment mean that new demands of the sector are emerging and picking up pace:

  • Labour market challenges are not only creating staffing challenges, but exacerbating employer brand and culture issues across the sector.
  • Shifting policy agendas and public perception is pushing sustainability issues to the forefront, and growing expectations of ethical corporate behaviour.
  • Traditional hierarchical structures and role relationships, are no longer meeting the needs of disengaged front line managers and employees who rather than act empowered, wait for their bosses’ or Head Office approval. These do not help hospitality organisations adapt, innovate, and enact change quickly and effectively.
  • The growing importance of suppliers and 3rd party providers to the operations mean that a more fluid, flexible and partnership-driven approach to leadership and management and different skills and mindsets to the ones deployed by managers and leaders in conventional hospitality organisations.

How can Leaders Unlearn and Relearn to Navigate Change?

The circumstances we now face means that standing still and refusing to adapt is the riskiest action a hospitality leader can take right now. These turbulent times call for a break from the old paradigms and conventional rules of engagement and rewrite the terms of what a sustainable and successful hospitality business means. 

In an increasingly complex world, conventional wisdom falls short. Old rules are meant to be broken and an agile approach to hospitality can help.

What is Agile Hospitality?

Agile Hospitality is the term we have given to the framework of thinking and approaches we see pioneering hospitality leaders, seasoned experts and maverick operators using to adapt, build resilience and navigate their people and business through these turbulent times. We have identified this framework on the basis of our own experience, understanding the survey data and researching other organisations (including several in the hospitality sector). Every organisation we have studied, even those that are part of the same industry and impacted by many of the same forces, has its own unique way of working, and there is no single, correct approach. This is not fluffy management theory. For decades, successful companies have transformed the way they organise themselves, treat their people and deliver a unique customer experience. Think; Patagonia, Apple, Zingerman’s, Union Square Hospitality, Honest Burger, Zappos, Southwest Airlines and the like. Each embodies one or more of Agile Hospitality principles in how they work and lead their business.

What are the principles of Agile Hospitality?

1.Release & Realign

Release mindsets and practises that no longer serve your organisation’s purpose nor up to the task of driving the business forward. Realign your people and operation to the mission and values of the business. 

The environment in which hospitality operates has changed permanently. Accept that you cannot continue as if the business will ‘return to normal’, frequent adjustments and change are now a daily reality. 

The business landscape is littered with the broken and sad remnants of companies whose leaders failed to adapt to change. They have been condemned to history as a cautionary tale about organisations that were deemed too big or special to collapse, refused to see that their place in the world had shifted, woke up to that reality too late, or desperately clung to what made them successful in the past.

  • Where are the blockages in your organisation? What mindsets does your organisation need to let go of?
  • What’s the culture that has evolved in your organisation? Is it serving the organisation’s needs
  • What opportunities lie outside and ahead of that your organisation may not yet have identified?
  • What other shifts need to take place for your organisation to thrive and differentiate itself?

2. Put People First True

Hospitality is not about selling a product or a service as a reason to set up your business. You build the business and set up the operation to meet the needs of your employees so they can serve and delight your customers. To survive in the hospitality business, you need to treat your employees and suppliers with respect and fairness. In turn, they will provide you with the opportunities to delight your customers again and again. Profitability and success are earned by putting people before profit. Yet very few operators master this principle. Honour this code and you gain your biggest differentiator. Because what you do can be easily replicated but not the way you make your people feel.

  • What do your people want and need to thrive at work? How do you know?
  • Does your organisation have a people strategy that goes beyond increasing pay and training new staff?
  • How is people strategy aligned with organisational purpose, mission, vision and goals?
  • What changes need to happen to help front line managers and leaders to put people first?
  • How capable are your organisation and key people within it of working in partnership with suppliers?

3. Use First Principles Thinking

To seek out and clarify the complex problems impacting your operation and help you to find the right solutions for your business. Question everything and leave no stone unturned. Get back to basics. Put your whole operation under the microscope.

Deconstruct systems and processes, test assumptions, the way you have always done things. When you declutter your thinking and strip back the operation, you improve your chances to see what is new and possible.

  • What are the complex problems impacting your operation? How do you know? What data confirms this? What might you have missed?
  • What assumptions are baked into the way your organisation is run, and how change is tackled?
  • How do the leaders and managers in your organisation make decisions? How do they use data to inform this?

Stepping Stones to a Stronger Future

Agile Hospitality is a path to a stronger and more resilient business. Beyond the three principles above, we have identified five steps to help you break free from ‘obsolete practises’ and create a culture in which change initiatives are more likely to stick.

They are stepping stones to guide you on your way to building a better and stronger future for your hospitality business.

Step 1: Purpose, Mission, Vision and Values Health Check

Whether you are (re)opening your doors to customers, welcoming back employees after a COVID pause or pivoting your operation, skip this step at your peril. In the tumult of recent months and years, purpose, mission, vision and values may have slipped down the priority list. If that rings true for your operation, this is the time to revisit them. Resist the urge to copy what seems to be working for your competitor or operation you admire or simply tweak the vision and mission strategies you have always followed.

Be clear about your ‘why’. Revisit your purpose and values. Do they ring true and are you willing and able to be held accountable for ensuring that business practises and all employee behaviour are aligned with the organisation’s purpose and values? Go beyond serving customers or making money. See your organisation as a vehicle that delivers a positive impact to help fulfil a higher purpose that goes beyond the founders’, the customers’/guests’ and employees’, shareholders’ needs – they help make the world a better place.

Step 2: Evolve into Agile Working

What does it mean to work in an agile way? 

It is not about operational managers being a taskmaster, administrator, process enforcer or the ‘policy-police’. It is about cultivating an environment where employees act empowered instead of waiting for permission or approval to take action in favour of the customer and their co-workers. 

The survey data had identified that many organisations have some capability gaps around different levels of operations management and leadership, and an evolution in how these are developed, managed and performance rewarded is very much due. Agile working is about bringing people, processes, connectivity and technology together, without the constraints of time and location, to find the most appropriate and effective way of working. It is working within guidelines (of the task) but without boundaries (of how you achieve it). With many organisations reporting an absence of defined and unifying strategies in the areas of people, operations and digital, along with barriers to change, this is an area that is going to demand leadership time and attention. True success will not be achieved without the engagement and buy-in from employees at all levels of the organisation.

Relevant technology that is designed with the ease of the user experience in mind first reduces friction in adoption and increases the chance for agile mindsets and work culture to take root successfully. Hardware and software need to be implemented to ensure that employees have the tools they need to stay connected and perform their tasks outside of the office, or away from the desk and off-property. 

Agile work cultures create opportunities to leverage your employees’ capabilities and provide fertile ground for the organic growth and development of your teams. 

Take care to agree to clear guidelines, objectives and performance indicators within which your employees are free and trusted to operate. 

With agile working, employees are given the latitude to be more innovative and productive; with that comes improved job satisfaction and a source of a better work-life balance for your team. With staffing and retention the number 1 issue that hospitality organisations are facing, agile working can be a competitive advantage in the labour market, providing a more compelling reason to stay than an increased hourly rate and job-related training, which competitors are offering too. Once retained, motivated employees working in an agile way leads to better customer satisfaction, and ultimately better bottom line profit for your organisation.

Step 3: Unlearn. Learn. Relearn

There is a saying that “Old ways will not Open new Doors”. To differentiate your business and achieve extraordinary results, hospitality leaders must create a culture where people actively and constantly unlearn and learn. Creating an environment where people feel free to make mistakes and learn-unlearn and then relearn from them. It calls for a move away from reframing mindsets and processes that was effective in the past, but now limit the breakthrough and success of the future.  

It’s not forgetting or disrespecting knowledge or experience. Only carry the best and most useful forward. It is a conscious act of letting go of outdated information and actively seeking and gathering new information to make more effective decisions and better actions. 

Beyond letting go of mindsets and past learnings that are no longer serving the organisation, there will be a need to adjust the infrastructure that is holding it in place, including policies, processes and structures. Change resistance and capability are challenges to many hospitality organisations, along with the strategic intent and capability needed to formulate a coherent plan. Re-learning includes taking action and acquiring new skills and capabilities and translating thinking into change. 

The growing importance of suppliers and 3rd party providers to the operations mean that a more fluid, flexible and partnership-driven approach to leadership and management and different skills and mindsets to the ones deployed by managers and leaders in conventional hospitality organisations.

Step 4: Give People Freedom to Operate

A great hospitality organisation starts and ends with trusting frontline employees’ ability to do what is right for the business. Leaders need to leave behind fixed industrial era mindsets and relearn and accept that they do no longer need to have all the answers -their people do. 

It starts with you. Remember, you as the leader throw a shadow on your organisation and your behaviour and mindset will impact the negative or positive transformation of your team. With change resistance and cultural factors creating barriers to change in many hospitality organisations, positive transformation is unlikely to be a quick fix, and teams need to trust that the change is both authentic and here to stay. 

Build your team like a Jazz Band by bringing together skilled and committed individuals around a clear purpose (WHY – cause, belief, passion, the reason for existing). 

Be prepared to learn new skills and manage differently from the way you have in the past. Like a jazz artist, each team member has the freedom to improvise and create their own riff on their assigned role. Welcome individual thinking and respect work style quirks and combine withholding each individual accountable to the group/team.

Be ready to rip up the script. Be simultaneously planned and spontaneous to fulfil the organisation’s purpose. Give your team the latitude to do so as well. 

Guest experience and service delivery are equally informed by feeling and knowing. 

Assign dedicated yet fluid roles. Develop the skill to manage the tension between planned and spontaneous states. You will need to practise the art of improvisation to get the best from your Jazz Band style team. 

Your role as the leader is to ensure the context of what needs to be achieved is understood and why it matters; then build a framework for how people do their best work and achieve the goals for the organisation. 

Give autonomy to the frontline - less top-down control and fewer management layers with fewer rules and bureaucracy.

Step 5: Let Digital Tools Do The Heavy Lifting

Across all industries, you see an increased focus on building digital tools to support the workforce with the aim of achieving more productivity through automatisation of time-consuming transactional tasks.

Let digital tools do the heavy lifting. It’s an approach where the business understands how digital tools can help their leaders and employees enhance their productivity, so they can spend more time on what matters; having a real human connection with either team members or customers.

We know this has been a priority of many hospitality organisations and is seen as a top enabler of future performance, but it faces barriers of change capability, change resistance and the need to make a compelling case for funding, and successfully obtain this. Digitisation and automation must also be aligned with other strategies, and supported by tactical actions.

For example, the investment many operators already have made in improving the digital experience sends more customers through the doors. This is great; but what if your operation is not ready to take on this influx of business?


Do you have the capacity or support systems in place for your employees to deliver your promise to the customers? Digital tools can help the business make sure that there is the right balance between delivering a great customer experience and employee experience.

Lead Your Business Through Uncharted Waters

Many leaders are planning the future of their business, but operating with their minds rooted in the past. An overconfident reliance on false assumptions about their customers’/guests’ expectations and employees’ desires lays the groundwork for their demise.

 They are tempted to use success as a positive indicator of what works and what to keep doing. In reality, most past success hides the seeds of their business’ demise. They are likely to let their guard down, blinded by past glory. Comfortable in their groove, they abandon the creative maverick thinking that helped them to blaze a trail to success in the first place. Sadly, untended success has a shelf life. 

Don’t be one of them! Your hospitality business’ survival depends on it. 

Visionary hospitality operators who have accepted the challenges of the times, never allow themselves to get comfortable. They are willing to abandon what has worked in the past but is no longer fit for purpose, adapt, and create new opportunities that have relevance and value in a changing world.

The road ahead is not easy, but meeting the challenges head-on with conviction is the first step. 

Be patient – there are no quick wins. You need to commit for the long haul.

 “Imagine that your job is to put a small boat in the ocean. You have to get past those first waves to get out onto the wider ocean, which is often the hard bit. And then when you finally are on the ocean, you find it much easier to move forward as once you are past those choppier first waves of the transformation.” 

This is your call to action. 

Draw inspiration and guidance from some of the ideas, actions and Agile Hospitality framework shared in this report and you can take the next step to transform your organisation and the hospitality industry for the better – stronger, more resilient, and agile.

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