1. A bloated workforce
Hospitality workforces face problems that are largely unique to the industry. At the more junior end of the pay scale, for example, student waiting staff and cleaning staff may use hospitality jobs simply as a way to tide them over during the holidays. For a less-than-savvy finance leader in hospitality, the cost of this sort of staff turnover can easily become crippling if it’s not kept in check. The cost of all those training sessions, as well as lost staff time from recruitment, can mount up fast. As a result, investing in your hiring processes by taking the time to learn about prospective employees’ plans and their likelihood of long-term loyalty is a good idea.
2. Cash flow issues
As anyone who has ever worked in the finance function of a hospitality business can attest, cash flow is often a major issue. The first paying customers at a new hotel building don’t arrive until years after construction begins, for example. This sort of conundrum poses a choice for a hospitality finance leader: the choice is often either to take a risk and scale early, or wait for the cash to roll in and scale more slowly. By using a data-focused finance software solution, it’s possible to model this kind of issue and make an informed, balanced decision about the best approach.
3. Consumer behaviour change
In some ways, the potential for consumers to change their behaviour on a whim can work well for hospitality. Many consumers of hospitality offerings change their behaviour in a business-friendly way around holiday times, for example, when they tend to head to pubs and restaurants on a more regular basis. However, when times are hard and people find that they have less cash in their pockets, cutting out luxuries such as pub trips and holidays can be the first to go. Without a buffer or cash reserves in place, financial issues can quickly arise during tough times.
With the UK’s hospitality sector so buoyant, it can sometimes seem from the outside as though this is an industry that doesn’t have to worry about financial issues. However, for a hospitality finance leader, the problems of high staff turnover and constant cash flow worries are ever-present. By thinking carefully about these problems and being prudent, however, it’s possible to get a handle on them and lead your hospitality business to success.
As a hospitality finance leader, there are plenty of reasons to switch to a data-focused financial software package in order to tackle these problems more effectively. Find out more about managing financial problems in the hospitality sector in this guide or discover how Access Group can help here.