Webster’s defines Value as:

1. the price or cost of something
2. usefulness or importance
3. a strongly held belief about what is important

No thing has any inherent value beyond that which an individual ascribes to it (i.e. value is relative). The primary objective in the hospitality industry is to discover what hidden value each guest desires and illuminate (deliver) it.

The primary objective in successfully managing (leading) people is to understand the value hierarchy held by each employee and motivating/teaching accordingly. I strongly suspect that in the given economic climate, understanding and exploiting (making productive use of) definition # 3 is more critical than ever in achieving these objectives.

From an employee perspective, financial growth and security (definition #1- price/cost/wage) have become fiction. Value in this sense is dictated strictly by what is necessary to survive. The same can be argued for #2. Maintaining a roof over ones’ head and feeding the children resonates; driving a nicer car is meaningless in light of that reality.

Our effectiveness as leaders, and our ability to nurture and grow both our employees and client base will be largely predicated upon our understanding of these personal motivations (definition #3).  As leaders, we will need to listen more closely, ask more pointed questions, and pay more attention to not only what is said, but what is left unsaid.

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by Keith Schofield
Director of Operations,
The Townsend Hotel
Restaurant Consultant,
Details In Retail

One unfortunate side effect of the world financial turmoil is the proliferation of economic pundits manipulating statistics to underscore the credibility of their prognostications. A veritable alphabet soup of acronyms (GDP, S&P, ADR, GNP, FTSA, etc.) indicate either we haven’t hit bottom yet, we’re well on the way to recovery, future growth will be robust, or chaos and volatility are the new economic realities.

Having spent my entire career in the Hospitality Industry makes my success dependent upon people’s perception of their economic future. Levels of disposable income are largely determined by feelings about job security and  income potential.

The measure I use to gauge public perception of the economy is the PPB, or price per bottle. The average price spent on a bottle of wine is a clear indicator of relative optimism. Over the last two months, this “pundit” has seen the PPB rise 25% over levels twelve months ago.

It should also be noted that drinking better wines further increases one’s feelings of optimism and well being.

Drink well and prosper.

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By Keith Schofield
Restaurant Consultant for Details In Retail

The climb in oil prices has been placing enormous upward pressure on commodities across the board. Higher transportation and fertilizer costs translate to unprecedented pricing levels for rice, flour, oil, produce and every other item in a restaurants cooler and storeroom. Profit margins and the necessity of meeting targeted food costs in order to maintain them are becoming seriously distressed. How does an operation flourish amidst these uncontrollable factors?

The obvious answer is one that most restaurateurs are loathe to accept: raise menu prices. Economic reality has severely impacted discretionary spending. The concern that price increases will negatively impact cover counts is all too real in this climate. What is an owner/operator to do?

The bottom line is that rising cost of sales will eventually overwhelm the already tight profit margins in this industry, which creates an untenable situation. Short of cutting quality by utilizing cheaper ingredients, price hikes are essential for survival. The keys to successfully navigating this slippery terrain, is to ensure that the price structure is judicious and to communicate with your guests. Working the floor and listening to your clientele’s needs and concerns is always the best way to inform your decisions and allay any discomfort your guests might experience.

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