Published Wednesday 19th February 2020
It’s hard to argue that one of the most significant areas of concern for UK businesses over the next few years will be the sustainability drive. Led by growing public demand, expectations continue to rise regarding the current practices and future ambitions of companies regarding managing their environmental impact.
Sustainability issues will affect all industries over the coming years, but those that are more customer-facing are expected to come under the most pressure. Recent reports have shone a light on the growing sustainability concerns facing the hospitality sector. With profit margins consistently under pressure, hospitality providers must not fall behind in the race for sustainability.
Rising Expectations in the Hospitality Sector
The latest report by CGA on behalf of UK Hospitality looked specifically at the sustainability concerns facing hospitality, both now and going forward. Interviewing over 5,000 British consumers, the study begins to put into figures the long-held belief that sustainability expectations are notably increasing across the sector.
According to the UK Hospitality report, more than 83% of consumers now expect to see all hospitality brands engage in one of the following aspects of sustainability:
- Ethically-sourced food and drink
- Environmentally-friendly packaging
- Reduce carbon footprint
- Donate to social, ethical and green causes
Over 64% of respondents now expect to see ethically-sourced food and drink available at hospitality providers, through a combination of local, seasonal and sustainable foods. More than half of those surveyed expect to see eco-friendly packaging or evidence of a reduced carbon footprint.
Interestingly, 16.2% of respondents also expected hospitality brands to donate to social and ethical causes, showing that sustainability for a growing number of people goes beyond what is produced in-house.
Balancing Sustainability and Competitiveness in UK Hospitality
The hospitality sector is one of the most competitive domestic industries, with a growing number of businesses competing for the consumer’s disposable income. Many customers are also aware of this, which is driving prices down and squeezing already tight profit margins. Such a phenomenon is also apparent in the sustainability issue.
According to the survey, there is a disconnect forming between customers expectations regarding sustainability and price competitiveness. Over 40% of customers in the report stated that, despite demand for the four key aspects of sustainability, none of them would justify having to pay more.
This contradiction between more premium, sustainable practices without a premium price is causing concern for many hospitality providers. The UK Hospitality report also surveyed 130 leaders in the sector and found that 91% of those now consider sustainability to be a priority for their business. However, 33% said they are not in a position to allocate resources to the issue.
Unlocking Sustainability Potential for Hospitality Businesses
While there is currently a concern regarding the price of sustainability for hospitality providers, the survey does provide some long-term hope for companies. The recent success of ‘Veganuary’ promotions has shown that there is a growing market for sustainable food and drink, which is backed by this survey.
While some respondents don’t believe they should pay more, the report also found that there was a £10 increase in monthly spend by those who highly valued eco-friendly practices (£92.25), compared to those who didn’t value them at all (£81.73).
Evidence suggests that the market for sustainable hospitality providers will only increase as expectations continue to rise. The key for industry companies now, then, is to ensure they have the capital to invest and are not left playing catch-up over the coming years, particularly as demand meets increased government regulation.
Finding the capital to invest in sustainable practices, however, can be notoriously challenging for the hospitality sector. Recent increases in the average wage in the UK and growing concerns about the availability of low-skilled labour post-EU continue to put real pressure on the hospitality sector.
However, with the support of industry specialists like Expense Reduction Analysts, hospitality companies can begin to create the investment capital required to keep up in the sustainability race.
Here at ERA, we’ve been working with businesses across the hospitality sector for years, helping them save through effective long-term procurement. Our specialists can help to manage the cost of business utilities, personnel, or help you achieve sustainability goals through packaging and distribution. If you’re interested in discovering what we could do for you, why not contact our team today or explore our hospitality case studies.