The Adrian Loveridge Column – Brexit Effect and a Weak Pound

As we enter the critical peak winter season, the importance of revenue management becomes even more pivotal to our economic recovery. Many financial ‘experts’ have been recently quoted as stressing that ensuring added-value in our tourism offerings is vital to our survival, but I am not sure that this is universally understood, let alone overwhelmingly embraced.

While we have had amazing past support for our restaurant initiative, it is still difficult to persuade some players that with a near all-time Sterling low currency value against the US$, that BDS$99 at the current rate of exchange is very close to GB Pounds 40, and probably more, when credit card transaction and settlement fees are taken into account.

Everyone is fully aware that costs have risen well above prices charged, but that is not the customer’s fault and they should not be penalized for our enforced problems.

There also appears to be a lack of universal comprehension about controlling revenue management. Is it better to have your restaurant completely full at 8.30pm every opening evening, or to fill otherwise vacant tables at 6 or 6.30pm for those more senior visitors or younger families, who often wish to dine earlier anyway?

Even if you limit those patrons looking for added-value by accepting a maximum of ten persons per night, six nights a week and 50 weeks of the year, that’s a mind boggling $297,000 annually in revenue, that will have cost you nothing to advertise or promote.

Surely, that goes a long way to increase your serving staff’s service charge earnings, paying the rent, land taxes, utilities, insurance and other standing costs?

It is also a prerequisite that we fully understand where our visitors come from and the increased challenges they face at home.

The ongoing Brexit saga has not only had a profound detrimental effective on currency values, but has directly impacted on disposal income with higher than anticipated inflation, rising mortgage rates, increased imported goods prices and lower house values for a substantial percentage of our cherished arrivals.

Compound this with a monumental change in our non-all-inclusive accommodation offerings with thousands of rooms now being offered through online agencies like Airbnb, Where-to-Stay and many others, opening up multiple choices of less expensive lodging.

It therefore must be patently obvious that we are marketing towards a largely less affluent type of visitor.

A recent media report by an accredited industry expert concluded that across the United Kingdom the average price of a 3 course restaurant dinner, bottle of wine, tax and service was GB Pounds 55.90 for two persons, so even our BDS$99 per person offering is already 45 per cent above that rate.

Their immediate response is often to trade down normal accommodation choices while reducing the average length of stay and spend in the destination.

Every one of these factors has a profound effect and consequence on our industry, and should be fully considered.

I also believe that there is great deal more that our food and beverage distributors can do to stimulate spending within the tourism sector, helping it become more affordable to dine out.

Monthly specials, highlighting particular wines and edible ingredients targeted especially to our standalone restaurants and smaller hotels.

This could also be supported by the more proactive diplomatic or consular missions of the various countries represented here, who currently trade significant imports.

Argentina and Chile perhaps are good examples.

15 comments

  • London Bridge falling down?

    Former PM Blair calling for a second Brexit vote.

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  • Two points: service charges are not salary. Staff must be properly paid. Second, an average of |£55 for a meal for two is very optimistic. In London alone, a meal for two in a three star restaurant comes closer to £100.
    We must compare winter bookings with bookings to Spain (even given Brexit), Greece, France and other European destinations. If we are o have a hotel corridor from |Hastings to Back Rock, it must be well thought out, not just an off the cuff statement.

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  • You should say in YOUR opinion, service charges are not salary.

    Similarly to a sales commission service charge is included in a employee’s earnings and from which NIS and PAYE are deducted.

    Liked by 1 person

  • I do not want to hijack the thread, but, Mr Goren, is a service charge a tip?

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  • Hal,

    the price of GB Pounds 55.90 per couple is an AVERAGE price across the UK and not specific to London. You have to remember not all our British visitors live in London.

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  • “The ongoing Brexit saga has not only had a profound detrimental effective (sic) on currency values…blah…blah…dribble…dribble…”

    You sound like the Bullcrap Broadcasting C***s Mr Loveridge, where any good news is “in spite of Brexit”, and usually suppressed anyway, and any bad news, real or more usually fake is “because of Brexit”, or perhaps you are a clone of that mendacious and treacherous Canadian clown mismanaging the BofE.
    Brexit is a HUGE opportunity for the UK, free from the dead hand of terminally corrupt, often drunken, thieving, undemocratic, unelected Continental bureaucrats with their snouts in the Great Eurotrough.
    You shame yourself, and your position in Bajan tourism with this rank nonsense, and I had always taken you for one of the saner voices.
    Wake up and watch the Great being put back in Britain, even if it has to be (hopefully) over the dead bodies of the rotten Remainiac political and Establishment classes, and a reconnection with Britain’s TRUE friends, the Commonweath countries who were shamefully dumped by Perfidious Albion under the monstrous traitor Heath, and perpetuated by those other pieces of political ordure, Major,Blair, Brown and Cameron.

    BREXIT WILL MAKE BRITAIN GREAT AGAIN, AND WILL HASTEN THE COLLAPSE OF THE FOURTH REICH OF THE EUSSR.

    “The most puzzling development in politics during the last decade is the apparent determination of Western European leaders to re-create the Soviet Union in Western Europe.”

    ― Mikhail Gorbachev

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  • @ David – the slithering into view of the serpent Blair is a boost for Brexit – the loathsome creature and his foul harridan are like poison the British.

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  • @Adrian,

    I acknowledge that is a national average, which I consider optimistic, and gave an example of a London average. I visit Blackpool often and lunch/dinner for two comes to more than that on average. A meal for two at my local chippie comes to about £20/25.

    Liked by 1 person

  • “Similarly to a sales commission service charge is included in an employee’s earnings and from which NIS and PAYE are deducted.”

    Robert Goren

    You are correct.

    Service charge payments are INCLUDED in an employee’s salary/wages “from which NIS and PAYE are deducted.” Each employee that is entitled to service charge is allocated a specific number of “service charge points,” which varies according to their level of employment…… and depending on the status of the hotel.

    For example, a Bellman at a luxury such as Sandy Lane may be allocated 6 points, while a Bellman at a “five diamond” hotel such as Royal Pavilion may be allocated 4 points and 2 points allocated to a Bellman working at a lower ranking hotel. Using the same hotels as examples, points allocated to a Restaurant Supervisor, may be 8, 6 and 4 respectively. Note, these are only examples.

    A service charge of 5%, for example, is added to the price of food and beverages. Total service charge collected for the week is calculated and after 2% for breakage is deducted and with-held for the hotel, the remainder is recalculated to ascertain the amount one (1) service charge point would pay. A breakdown of this calculation has to placed on a notice board for employees’ perusal.

    Supposed the service charge paid $25.00 per point, an employee with 10 points would receive $25 x 10 = $250, in addition to his/her salary. So, if his/her weekly wage is $500, then he/she will receive $850.

    “Is a service charge a tip?” is more or less, engaging in “semantics”…… how we construct the meaning and interpretation of words.

    Whereas a “tip” is something that is left to the discretion of guests……. and could be considered as a “personal transaction” between a guest and an employee, which that employee keeps for him/herself………

    ………. service charge is “automatically” added to the bill and is basically guests paying a fee for services rendered, which is subsequently distributed among eligible employees.

    I believe the thinking behind this system was to move away from having guest “tip” employees. Supposed guests dined in the hotel’s restaurant and is served by “Waiter A,” who after the meal, may be given a “tip” of $50, which he keeps for himself. The argument is the many other employees are involved in the process of preparing the meal……. from the Stewards (cleaning the wares and preparing the kitchen); Kitchen Assistants (preparing the ingredients)…. to the Cooks (cooking the meals). Therefore, they should also have a share in the “tip.”

    Liked by 2 people

  • Robert Mac Donald

    Artax: I understand in Canada at many restaurants the “tip” is like your point system in that management allocates the tip to the various other employees, the waiter/waitress getting a larger portion. Of course there is no service charge except usually for groups which a percentage is attached to the bill.

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  • The whole so-called tip business has been hijacked. The original intent of rewarding your waiter (NOT backroom staff) for exceptional personal service, and withholding the favour for indifferent attention has been lost. The application of a ‘service charge’ is an affront to the customer who has already paid for the service in the often exhorbitant price of the meal. We are mugs to be intimidated by such blackmail.
    I prefer the French ‘tout compris’ where everyone knows where they stand.

    Liked by 1 person

  • Robert MacDonald

    Is that Canadian system similar to having a “tip jar” in which patrons are asked and waiters/waitresses are required to place all tips?

    45govt

    In all fairness, is it not the waiter’s job to offer “exceptional personal service,”…… just as it’s the job of the Chef to write a “exceptional menu”…….. for the Cooks to prepare an “exceptional meal?”

    And does not an “exceptional meal and exceptional personal service” complement each other and is viewed, collectively, as offering an exceptional service?

    Plates or cutlery found to be dirty or an inedible meal is often considered by patrons as an awful experience and terrible service…….

    ……….no matter how much “exceptional personal service” the waiter offers. And because of this, patron may be unwilling to “tip” him.

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  • You are quite right Artax, which is why I prefer the French system and why I will NOT pay a service charge. Why should you pay again for what you have already paid for?
    On the other hand, come Christmas do we not all find something for the postie, the stuffbin men and others?

    Liked by 1 person

  • PS – I have never understood why one should pay extra for a group. It should be a discount not a premium.

    Liked by 1 person

  • Is so difficult to maintain the area along Trevor’s Way? Isn’t this where thousands of cruise ship passengers traverse daily?

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