By Amy Bostock and Nicole Di Tomasso
TORONTO — Last week, the Ontario Restaurant Hotel Motel Association (ORHMA) hosted its second annual Ontario Hospitality Conference at the Sheraton Parkway Toronto North Hotel & Suites in Richmond Hill, Ont. Over the two-day event, more than 100 foodservice-and-hospitality leaders gathered to recognize the 2023 OHI Hall of Fame inductees, network with industry peers, explore a number of vendors and gain insights into key topics, such as provincial and regional industry updates, considerations in effective recruiting, legal issues relating to employment and operations, tipping culture, industry disruptors and opportunities and food-and-beverage (F&B) profitability in the current landscape, among others.
The conference kicked off with opening remarks from MC chef John Higgins, former director of Enterprises and Brand Ambassador, the Centre for Hospitality & Culinary Arts at George Brown College, and Tony Elenis, president & CEO of ORHMA.
“A saying I coined a long time ago is: respect the tradition and embrace the future. That’s what we’re doing here,” said Higgins. “What makes me so happy to participate [in this conference] is seeing other people be successful. If you can help someone be successful, there’s no better thrill. That makes life worthwhile, and learning is the main ingredient.”
The first session of the day, State of the Industry and Understanding Ontario Key Markets, featured insights and predictions from Robert Carter of The StratonHunter Group and Nicole Nguyen, senior vice-president with CBRE Hotels Valuation & Advisory Services group in Canada.
With COVID behind us, the current landscape and the future of the foodservice and accommodation sectors is very different from the past. Carter and Nguyen shared their analysis, projections, and recommendations to make strategic planning decisions and considerations for foodservice and hotel operators going forward.
“As we look at how the market, from a restaurant standpoint, has performed over the last couple of years, and look forward to 2024, there are three things you want to take away from today’s talk,” said Carter. “One, we’re entering a condition of stabilization. We know that over the last three years there have been crazy swings and changes taking place. But as we move into 2024, we’ll start to see a much more stable marketplace. Secondly, we need to be working smarter, more strategically, really understanding your marketplace and understanding your consumer in detail. And the third one is, data-driven decisions are what allow the operators who are succeeding to really succeed, steal share and drive their growth overall.”
On the hotel side, Nguyen said the industry is now at a point where it has a little bit more stability, adding her expectation is that going forward, the market will see a lower and slower pace of growth.
“We’re still waiting for that corporate traveller to come back. It’s coming — a return to more normal travel patterns from customers — just slower than we had hoped,” she explained. “So, for the last couple of years, you’ve seen this really abnormal travel pattern; you’ve seen leisure travel outside of normal leisure times and meetings and conference business happening at times that it didn’t traditionally happed before, because everybody was trying to catch up coming out of COVID.”
She says CBRE is predicting a very moderate 2024, “but still positive growth. Our long-term forecast is that we’re at full recovery. And in terms of supply growth, the country will likely run at a higher occupancy level than we’ve ever seen for the next couple of years — likely somewhere in the 67 per cent to 68 per cent range nationally.”
Addressing the Talent Gap
The second session of the day, Shame On Us! Bridging the Gap: Understanding the Industry’s Labour Needs and Attracting and Keeping Future Talent in Hospitality, was moderated by Dr. Altaf Sovani, founder & CEO of Alzen Consulting Inc. Panelists included Mike Jackson, senior manager, Deloitte Human Capital Consulting/Workforce Transformation Consumer Lead; Adrienne Foster, VP, Policy & Public Affairs, Hotel Association of Canada (HAC); Liana Carniello, Human Resources director at The Sheraton Centre Toronto Hotel and president, Hospitality Human Resources Professional Association (HHRPA); and Jessica Carrera, Hotel & Restaurant Management student at Humber College. Together, the panellists examined why the industry’s desire to address labour needs may not be resonating with the individuals we seek to recruit and identified strategies to attract and nurture future talent in hospitality.
The conversation began from Carrera’s perspective as a student, with Dr. Sovani noting that millennials will account for 75 per cent of the workforce by 2025 and are demanding changes, such as work-life balance, compensation packages, better scheduling and organization policy changes.
“Work-life balance is important,” said Carrera. “We’re young and we want to enjoy our lives. We want to travel but we also want to build a career. The issue is [choosing a career in hospitality] forces us to work weekends and evenings, which takes away from our social lives,” adding that her decision to join the industry has put a strain on her family life as a wife and mother of two.
Carrera also mentioned how unpaid internships in particular cause tremendous stress among young professionals looking to gain experience in the industry. “We’re working and learning from these internships and it’s fair that we should be compensated for it. Social media is our friend and Millennials and Gen Z aren’t afraid to speak up. There’s a lot of videos out there talking about the best and worst companies to work for and industry leaders need to focus on that,” she said. “We also need to get to know our people more. Work-life balance, mental-health supports and compensation packages can be outlined in a job description to attract staff, but once they start working, the truth always comes out.”
The panellists also discussed a number of actions that leaders can take to create an environment where workers feel safe and comfortable speaking up.
“When we think about safety at work, traditionally, we think of physical safety but that’s simply entry into the dance. Everyone expects to come into work and not get injured, but the conversation is really about psychological safety,” said Carniello. “To create a sense of safety and belonging, I ask leaders to look at themselves and their teams. We always hear about how the hospitality industry is so diverse, but mostly at entry-level positions. So, what are we doing to make sure that the C suite looks more like the rest of our population?”
Carniello then shared a staggering statistic. Young workers are 30 per cent more stressed than workers over 40. “That’s a problem,” she said. “Mental health needs to be a daily conversation. Your workers need to see that you can be vulnerable and talk about your bad days inside and outside of the workplace in order to have that trust and empathy with you as their leader.”
The panel wrapped up with a rapid fire question about re-thinking employee value propositions and the key takeaways from the discussion.
“Look at your own leadership first because that’s where a lot of the answers are. That’s where you can control change in your immediate work team or in your leadership style to be a better advocate for this industry,” said Carniello. “Get involved with your educational partners whether that be training action centres or local colleges and universities. Lastly, invest in your HR professional. You will see a massive ROI.”
“It’s cheaper to retain than it is to recruit,” said Jackson. “There’s no magic pool of people to recruit from, so it’s important to focus on retention efforts. How do you upskill? How do you create the skills that you need? And, there’s a role of technology. Don’t worry if it doesn’t work. Test it out on a small scale and see if you can create meaningful improvements. Lastly, don’t do things in isolation. Don’t look at retention or automation without including your workforce because they’re closer to the problems than you ever will be.”
Jackson added that many organizations offer tuition reimbursement programs, but, statistically, only two per cent of employees take advantage of those programs. “If you offer that, push that lever because that’s one of your retention strategies.”
“Uplift and highlight the voices of [students]. Having Jessica here has been an eye opener for all of us,” said Foster. “Our commitment at HAC is to highlight those voices more often.”
“We want to see leaders mentor students and we want to see leaders as guest speakers at our schools. Give students hope that they can achieve your position one day,” said Carrera. “And pay students for the work they’re doing. Many students have families and need to pay rent, so anything helps.”
Maximizing Food-and-Beverage Profitability
The first breakout session, Maximizing Food-and-Beverage Profitability in an Era of Rising Costs and Labour Challenges, delved deep into this complex issue and provided actionable solutions that can be implemented in various hospitality settings. Presented by David Hopkins, president and founder of The Fifteen Group, and Jeff Dover, president and founder of fsSTRATEGY, key topics included analyzing the impact of rising costs, labour optimization and workforce management, menu engineering and pricing strategies, streamlining operations and supply-chain efficiency and innovations in revenue management.
Dover started the presentation by outlining the three major costs for restaurant businesses: food, labour and occupancy. Hopkins added that “inflation is a golden opportunity for restaurants once the marketplace has a good understanding of it.”
The duo proceeded to present four opportunities for success: pricing, service periods, tipping and delivery.
About a year ago, Hopkins said his organization completed a survey asking general consumers if they would support a price increase in restaurants. “Approximately 74 per cent said they would support price increases, which is unheard of. If this survey was done in 2018, I doubt many people would support it. This gave restaurants the green light to increase prices, which is a phenomenal opportunity.”
Dover said the revenge spending phenomenon that took hold as the world climbed out from under the pandemic contributed to the survey results, adding that today, consumer confidence has dipped slightly.
To raise prices wisely and reverse the negative consumer impact on restaurants, Hopkins and Dover said margin-menu pricing and menu engineering the right way is critical.
Next, the duo said navigating the busy service periods in the restaurant industry can be challenging but with the right strategies, it’s an opportunity in disguise. Based on job vacancies and other factors, “assess the dayparts that you can add and grow, but make sure the math works out. Do the analysis,” said Dover.
“The most important thing about restaurant success is guest experience,” added Hopkins. “In a labour market that’s now incredibly challenging, why devote energy, time and resources to a daypart that’s going to make you $0 when you can focus your efforts on delivering an 11/10 guest experience on a Thursday, Friday and Saturday night?”
Third, tipping is a huge opportunity that isn’t “utilized by restaurants effectively,” said Hopkins. “Tips are increasing compared to 2019, according to data from Toronto Sun. What this means for a typical $2 million food operation is people are tipping higher, so there’s roughly $60,000 more tip money coming into the restaurant, and there’s another $54,000 coming in from the price increase on the total bill. Overall, this restaurant has $114,000 more money in their labour ecosystem.”
Lastly, Hopkins and Dover said restaurants should be maximizing delivery. “Off premise is more profitable revenue because you’re serving customers but you’re not cleaning the tables or the restaurant and there aren’t as many servers,” said Dover. “I recommend limiting your menu for delivery to items that you know will sell.”
“There will be product costs, extra labour, delivery fees and a few other expenses but it’s still a winning formula,” said Hopkins. “It’s hard to say no to incremental revenue, however, it’s not necessarily for everyone. The quality of your food and how it travels reflects on your brand. It’s another revenue stream but if it doesn’t align with your brand and you don’t need it to make your overall profit model work then don’t do it. But, if you feel that you can do it effectively, it’s a great way to layer on extra money.”
For more coverage of the Ontario Hospitality Conference, check out the October 17 edition of Hospitality Headlines.