December 14, 2020

Rising from the ashes – the revival of hospitality

We talk with Peter Lederer, Chairman of Hamilton & Inches, The Royal Edinburgh Military Tattoo and Taste Communications, to gain his insights into the hospitality and food sectors and the impacts they are experiencing currently. We look at the opportunities that these challenges may present, and the necessity for innovation to keep a vitally important part of the economy alive.

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From an early career working in hotels in Canada to his return to the UK to join the world- famous Gleneagles Hotel where he stayed for 30 years rising to Managing Director and then Chairman, Peter has been a pivotal figure in hospitality – and he is a true ambassador for Scottish and UK hospitality on a global stage.

We talk to Peter to gain his insights into the hospitality and food sectors and the impacts they are experiencing currently. We look at the opportunities that these challenges may present, and the necessity for innovation to keep a vitally important part of the economy alive. We consider food production across the UK and the demands on supply chain and why and how innovations can be embraced to ensure availability without any compromise on quality.

Q) We cannot ignore how the past year and the fallout from the COVID pandemic has impacted the hospitality sector around the world, in ways that might have been unimaginable in the past. Can you share some of your own observations – looking at your broad areas of experience – as to what this has meant for hospitality and leisure industries both in the UK and internationally?

Firstly, internationally it’s a bit of a mixed picture. If you look at places like China, for example, and areas in the far East, they are getting back to where they were pre-COVID. That gives a positive view going forward that we will come out the other side. If you look at Europe and parts of North and South America, it’s still pretty tough going. I’ve never seen anything as dramatic in my career or lifetime.

In the UK, in cities – we talk about Edinburgh, Glasgow, London – they’re hugely affected.Whereas in the countryside, pre this latest lockdown [interview conducted in November 2020], hotels have been doing very well because as people can’t travel abroad, discovering your own country becomes more important. Travel will come back, it’s just how it’s going to come back that will be the issue.

‘Transformation’, ‘change’, a ‘new normal’ – do those terms and phrases even go far enough to sum up the dramatic evolution that these industries are having to adapt to?

I think it will be a mixed picture, as it always is. There will be the innovators and the people who see everything as an opportunity and will look at the hospitality and catering industry and say what has this taught us and where are the opportunities to grow now? There will be a large group in the middle who will muddle through. Our industry – the hospitality industry – is not typically the most innovative in the world, but this may cause them to be a bit more innovative. And then there will be those who lose completely. The scale of that will be the interesting thing to see.

It really depends how quickly things come back, and that’s the big unknown. Will we see recovery in 2021, or is this going to continue through a good part of next year, in which case the situation becomes much more difficult.  On innovation, in the last six months I’ve reflected on the fact that as a leader when you have time to think, how much good stuff comes out of that. When you’ve got time to think deeply and look at what might happen, the innovations that might be possible and where the opportunities might lie then the smart and the innovative people will push on and push forward.

"The innovative people will push on and push forward."

It’s interesting to hear a broadly positive perspective as you look to the future. I suppose that is what you would hope from a leader, but I think it’s difficult sometimes as we’re presented with such a quagmire of negative stories around these sectors. It’s very refreshing to hear a really positive view that highlights this need for innovation.

How important will technology be in driving forward innovation in the food and drink and hospitality sectors?

It will be critical, I think. If you take my old haunt at Gleneagles, for example, and look at what the late Andrew Fairlie – a wonderful chef – was doing with his kitchen garden. That has filtered through to how the hotel thinks about food and how important that is to their whole offer: how they can innovate and have products that are consistently of the highest quality is what they’re interested in.

They will want to see how their suppliers are both improving quality and being more consistent in the quality of that product. Can they get absolute consistency at the very highest level so that they don’t have to worry about the ups and downs that you used to have in restaurants? Some days you would be able to get the product and some you wouldn’t. I think technology will iron out some of those inconsistencies but also potentially drive down costs. If that can be passed onto consumers, meaning that people can have higher quality food at better value, then all to the good.

With severely restricted travel access, tourists and customers have reduced, but supply chains have also been affected. How has this had the greatest impact?

The moment things are opened up, I think there will be a huge push for people to travel wherever they can.

As far as supply chains are concerned, I think it’s a similar situation. One of the concerns I’ve got is that we’re building and revolutionising the food and drink industry in Scotland and there are amazing artisan suppliers making wonderful produce, and protecting them and trying to ensure they survive is a real priority. I’m just not sure how possible that is. If the government doesn’t focus on this area of the food supply chain much more then we are going to lose a lot of suppliers who have built up very high-quality businesses – both domestic and export.

Will new innovations in food production require greater education of consumers?

It’s a subtle process. If you look at what’s happened to UK food, drink and the wider hospitality industry, we’re now world leaders in a lot of these areas. We’ve got to build on that leadership and ask: “what’s next?”. Whether it’s supply or innovation or technology, there are opportunities in all these areas for the UK to show the world what can be done.

It’s fascinating when you look at how chefs have changed people’s understanding and views on food and how they think about food at home. Chefs have also had a huge influence on supermarkets, which have in turn influenced the consumer. That education and level of influence is really important.

Having said that, we also have to tell a better story about the true cost of food. Supermarkets have done a great job, but in a way they’ve almost devalued food. People have to understand what it really costs.

Will there be greater requirements for staff to retrain or reskill as a result?

This is my biggest worry at the moment. Someone told me recently that 48 per cent of hotel jobs in Edinburgh have gone already. There are some frightening numbers in terms of what’s happening to the industry and whether hotels and restaurants can survive through the winter.

Having said that, the industry is very resilient. It is absolutely dependent on good people, and however good the technology is, in hospitality it is there to support customer service which by definition means great people looking after great customers.

That will be a bit of a shift in the industry. The skills needed to get a job in a restaurant are going up all the time, and what COVID has taught us is that we will require very good people who are very well trained but will also need continuing development. There may be fewer of them because of technology and the way we reinvent the industry, but the skills part of it will be key.

"What COVID has taught us is that we will require very good people who are very well trained but will also need continuing development."

Finally, Peter, despite the considerable setbacks of the pandemic, and with the consideration that Brexit is fast approaching – do you see opportunities and areas for excitement across the UK food, drink and hospitality sectors?

It’s amazing, isn’t it: if COVID hadn’t come along, we’d all be panicking and talking about Brexit! Yet it still will have huge impact. There will be threats and there will be opportunities but again, it’s a bit unknown.

Before COVID, I was hoping that Brexit would force the UK to really look at itself and get out of this slightly complacent attitude towards exports, building businesses and entrepreneurship. I think that both Brexit and COVID will create a more entrepreneurial UK.

"I think that both Brexit and COVID will create a more entrepreneurial UK."

If it shakes us out of complacency, makes us far more entrepreneurial, far more focused on exports, more creative and generally better salespeople – in the UK we don’t really know the word ‘sell’ – I think there’s lots of opportunity. But if we carry on the way we were, then I think we’re in for some very difficult times.

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