BY: HUW WILLIAMS
With hospitality back in business, the sector is having to work hard to keep its head above water and start to build cashflow to service loans and back rent. Without full capacity this is a huge challenge.
So, what now?
At the front of the struggles the industry is facing is the nature of their services and how successfully they will be able to offer them safely.
As the industry opens it doors to customers to eat and drink inside, social distancing rules will not allow full capacity, and this will restrict revenue. Not only will social distancing be posing a worrying problem for these businesses, but both businesses and suppliers will be questioning their ability to keep the business afloat with no way of making money.
The longer restrictions are in place, the more businesses we are likely to see facing late payments and insolvency. The industry has many indirect costs that eat away at the profits of the business and too often these costs are overlooked, or are out of contract. The tendering process is too time consuming as devotion is aimed at being covid compliant and getting covers filled.
How to combat the situation
We all know time is precious, but you should make time to look at your current contracts and note when they expire. Be diligent about the renewal process and make sure you go to tender and not just accept your current supplier’s renewal price. It could be that an improvement in the service level agreement would add value. Start with the higher spend items and work your way down the list.
But how do you know you are getting the best value? What are you benchmarking against? It could be that you are just looking at beating the last contract price, but what if you could improve significantly on that price?
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