Top challenges of growing a hospitality business in 2024

The last few years have been particularly turbulent for the hospitality industry, with various challenges affecting businesses of all sizes, from local hotspots to high-street chains. For hospitality businesses looking to grow and scale, navigating the current industry landscape can seem daunting. But for enterprises set up to deliver more to their customers, there are still many opportunities to succeed. And that’s where Dojo comes in. With our suite of payment tools and services, we empower enterprises to improve customer experience, increase efficiency and drive growth.

We’ve partnered with Tech on Toast, a podcast hosted by presenter and editor Chris Fletcher. Every episode, Chris talks to entrepreneurs in the world of hospitality and technology. In a series of collaborations throughout the year, Dojo experts will join Chris to share insights on how tech can help hospitality businesses thrive in the experience economy.

This month, Chris was joined by Dojo Senior Insights Manager, Cass Coulton, and Ryan Jacovides, Director at F1 Arcade & Pasture restaurants. Together they explored the top challenges of growing a hospitality business in 2024 – and the opportunities for enterprise businesses to succeed. Here are some key findings from their discussion.

Inflation is continuing to put pressure on many households and businesses

The rise in inflation and the cost of living crisis has had one of the most profound effects on the industry in the aftermath of the pandemic. Higher supply costs have resulted in price increases. However, the full costs can’t be passed on to consumers, making it more expensive to run a business overall. As a result, merchants are having to make tough decisions around closing businesses and restructuring underperforming sites.

Consumers also have less disposable income than in previous years. As households tighten their belts, eating out at restaurants or trips to spas and salons are now luxuries, so consumers expect more for their money than ever before.

Regulatory changes have affected staffing

Changes to UK immigration rules have seen a substantial rise in the minimum salary threshold for skilled worker visas. This presents a formidable challenge to the hospitality sector, where 95% of sponsored visas for roles such as chefs and managers could fail to meet the threshold. Minimum wage increases will also affect businesses by closing the gap between those seen as ‘well paying’ versus low paying – making it difficult to attract the right staff.

While there are obstacles to overcome, businesses don’t need to put their expansion plans on hold. Market conditions have created what Cass describes as a “more discerning consumer, focused on experiences versus material goods”. Hospitality businesses are particularly well placed to deliver the engaging memorable experiences customers value.

The hospitality industry has shown incredible resilience in the post-pandemic recovery

The most recent festive period was more positive than industry expectations. According to UK Hospitality , the industry grew to ￡56 billion in 2023, up from ￡43 billion pre-pandemic. Barclaycard consumer spend reported that consumer spending at bars, pubs and clubs rose by 7.9% in December 2023 vs. Nov 2023. These figures show that despite consumers now seeking even more for their money, the desire to enjoy hospitality services is still very much present.

Operational wins that lead to efficiencies are crucial to growth

Cass notes that, “Dojo research has found that the most successful businesses are focused on enhancing their everyday offer and this comes in the form of operational efficiency.” This is especially relevant to experience economy businesses. Long wait times for customers when settling their bill can have a negative impact on their overall experience. Similarly, Ryan states: “Everyone in today’s world is time deficient. Taking 10-15 minutes of their life feels like you’re taking something away from them.”

A robust, reliable payments platform is key to delivering an operational win. Integrations are the ideal solution for seamless service. Devices like Dojo Pocket enhance efficiency by letting staff take orders and payments from one device. So, with no more rushing between tables and the till, staff can serve even more customers. Integration between your EPOS and booking system can help you recognise regular customers, create rewards for repeat visits and help reach new audiences.

Those are just a few insights from Cass and Ryan on the top challenges of growing a hospitality business in 2024. To listen to their discussion in full, including further tips on improving operational efficiency and customer experience, tune into the full episode on the Tech on Toast podcast.