Can EPM Solutions Save the UK Hospitality Industry?
The UK hospitality industry stands at a crossroads. For executives, finance leaders and business analysts across hotels, restaurants, pubs, theme parks, spas and every other hospitality venue, the statistics paint a bleak picture of an industry under unprecedented pressure.
I shared the numbers in my previous article, but it’s worth recapping here in case you missed it.
Although closures slowed from eight sites per day in 2023 to four per day in Q1 2024, the underlying challenges remain formidable, with 2,657 hospitality businesses shutting down from January to September and another 750 between October and December as reported in the Hospitality Market Monitor.
Looking ahead, the PwC Hotels Forecast suggests growth in demand for UK hotel accommodation is expected to stall in 2025, while RSM notes that 2024 proved challenging as operators grappled with increased staffing and operating costs, as well as cautious consumer spending.
This isn't just a cyclical downturn. It's a systemic crisis rooted in fragmented financial planning, razor-thin margins squeezed by inflation, post-Brexit cost pressures, chronic labour shortages and fundamentally shifting consumer behaviours, like fewer people choosing restaurants over home dining.
It’s not hopeless though, as EPM (Enterprise Performance Management) solutions are helping to change the course for a lot of businesses, putting them back on the road to success through more confident, accurate, quick decision-making.
Why Traditional Approaches Fail
The modern hospitality landscape has evolved into a web of variables that traditional financial management systems cannot navigate.
Look at the complexity facing hospitality executives:
Workforce Evolution: The post-pandemic labour market has fundamentally shifted. Deloitte's 2024 European Hotel Industry Survey identifies rising costs and labour challenges as key immediate risks threatening growth. Skills shortages, wage inflation and changing employee expectations around flexibility and work-life balance have created a perfect storm of staffing challenges.
Economic Headwinds: Inflation hasn't just increased costs but also created unprecedented volatility across every input from food and beverages to energy and maintenance, driven by factors such as the global geo-political landscape. Interest rate fluctuations directly impact capital investments and refinancing capabilities, while currency volatility affects international tourism and supply chain costs.
Consumer Behaviour Shifts: The rise of experience economy expectations, sustainability consciousness, technology integration demands and the permanent shift toward hybrid work patterns have fundamentally altered when, where and how customers engage with hospitality services.
Regulatory Complexity: From health and safety compliance to environmental regulations, data protection requirements and evolving employment law, the regulatory burden continues to expand while penalties for non-compliance intensify.
Technology Integration: The need to seamlessly integrate point-of-sale systems, property management systems, customer relationship management platforms, inventory management tools, staff scheduling systems and financial reporting creates a web of interdependencies that traditional financial planning just cannot handle.
Enterprise Performance Management: The Strategic Response
An Enterprise Performance Management (EPM) solution is designed to help organisations plan, budget, forecast and report business performance. Unlike legacy systems that operate in silos, EPM consolidates data from various sources, enabling the kind of integrated, real-time visibility that modern hospitality operations demand.
For executives, EPM addresses the fundamental disconnect between finance and operations that has plagued the industry for decades.
Think about the potential across different hospitality segments:
Hotels and Accommodation: Instead of reactive pricing based on historical patterns, EPM enables dynamic revenue optimisation that considers real-time demand signals, competitor positioning, operational capacity constraints and cost structures. Your front office can instantly understand exactly how to price and allocate rooms based on live demand trends, competitor rates and actual operational capacity.
Restaurants and Food Service: Rather than ordering inventory based on intuition, your kitchen management team can access real-time insights into actual demand patterns, seasonal variations and profit margins by menu item. This enables precision inventory management that minimises waste while ensuring availability, optimises menu engineering based on profitability analytics and aligns staffing schedules with predicted demand patterns.
Pubs and Quick Service: EPM provides granular visibility into peak period analytics, enabling optimal staff allocation and inventory positioning. You can identify which products move fastest to prevent stockouts of high-margin items while reducing waste on slow-moving inventory.
Theme Parks and Attractions: Complex operations with seasonal variations, weather dependencies and capacity constraints benefit enormously from EPM's scenario planning capabilities. You can model different attendance scenarios, optimise staffing across multiple venues and time periods, and dynamically adjust pricing and promotional strategies based on real-time conditions.
Spas and Wellness Centres: Service-based operations can leverage EPM to optimise therapist scheduling, manage treatment room bookings, track customer lifetime value and integrate retail sales with service delivery for comprehensive profitability analysis. Data allows you to optimise data for even marginal gains that add up in the long run.
This proactive capability becomes critical when you consider the research showing that nearly one in four hospitality businesses entered 2024 with no cash reserves, and a further one in three had less than three months' worth. In an environment like this, early warning systems are survival tools.
Strategic Implementation for Hospitality Leaders
For executives considering EPM implementation, remember that it will transform how your organisation approaches performance management.
For Finance Leaders: EPM enables the shift from reactive reporting to predictive analytics, from departmental budgeting to integrated planning and from monthly financial reviews to real-time performance monitoring. You become a strategic partner rather than a scorekeeper.
For Operations Executives: Instead of managing by exception and intuition, you gain visibility into the operational levers that directly impact financial performance. Resource allocation becomes data-driven, and performance optimisation becomes systematic rather than ad-hoc.
For Business Analysts: EPM provides the analytical capabilities to conduct sophisticated profitability analysis, customer segmentation, operational benchmarking and predictive modelling that traditional systems simply cannot support.
The Path Forward
The UK hospitality industry can’t continue operating with 2015 financial management approaches in a 2025 business environment. With restaurants and food service making up 52.41% of revenue share in the UK hospitality market and quick-service operations capturing 37.85% of the market, the stakes are too high and the margins too thin for anything less than excellence in performance management.
As industry analysts note, only those with advanced marketing, revenue management and operational strategies will remain competitive. Enterprise Performance Management provides the foundation for these advanced strategies through integrated planning, real-time visibility and predictive analytics.
The time for reactive management has passed. The future belongs to organisations that can see around corners, adapt rapidly and optimise continuously. Enterprise Performance Management provides the tools to make this transformation possible.
Reach out if you’re ready to explore how EPM can transform your hospitality operations and we’ll develop a phased implementation roadmap that aligns with your business objectives.
