Mid-Year Observations For Restaurant, Cruise, And Private Club Sectors

June, 2019 - AETHOS Consulting Group’s Managing Directors in Europe and the United States have gathered their collective observations regarding leadership and talent among the Food & Beverage, Cruise, and Private Club arenas. Some of these issues transcend across borders and continents and some cross over into other disciplines of the industry too.

According to AETHOS’ London-based Managing Director and Partner Thomas Mielke, Executives and Chief Human Resources Officers in the hospitality industry are, in general, having more candid conversations about the 'sustainability of leadership'. This is to say, in an industry which is characterized by complex business environments requiring fast-paced decision-making processes, they are addressing the proverbial elephant in the room centred around improving leadership styles, avoiding executive burn-outs, enhancing engagement and fostering healthy work environments. “This is a particularly welcomed development in a sector which is defined by a high-pressure work environment,” adds Mielke. “Executives’ on-the-spot decisions can easily carry a great deal of responsibility in volume-driven and customer-centric businesses such as the cruise or the system chain restaurant sectors. Paying more attention to mental health and leadership support will certainly pay-off in the mid- to long-term.”

Other notable human capital observations from among AETHOS specialists include:

  • The restaurant sector, in particular in the UK, is experiencing a high CEO “churn rate.” Just a few months ago, AETHOS surveyed the stability of the C-Suite and the senior management at high-profile chain restaurant operators in the United Kingdom. Findings were reflective of an industry experiencing turbulent times. “Companies are battered by economic uncertainty, higher level of competition and unfavourable business conditions - with higher business rates, food costs and staff wages putting extra pressure on the operations,” states Mielke. “However, companies are also suffering from the instability, and high executive 'churn rate' at the corporate level. The CEO position in chain restaurants in the UK has not had stable, consistent leadership in general. This could be partly due to the short-term thinking of the private equity ownership groups.” Chris Mumford, co-Managing Director and Partner in London adds that the chain restaurant segment is certainly “paying the price for rapid growth, ” a notion which was shared recently in the Financial Times. AETHOS suspects continued trouble in the UK restaurant scene with private equity firms possibly starting to withdraw from the sector, maybe replaced by investment vehicles or HNWI with a more long-term, more sustainable perspective on growing a business,” says Mielke. In the US, Philadelphia-based Managing Director Andrew Hazelton chimes in, “In the restaurant space, staffing continues to be the top challenge as the prolonged economic expansion has led to a tighter labour market.  Further technology adoption in the restaurant industry, specifically in the QSR and Fast Casual verticals is also critical, especially when it comes to simplifying the ordering via the use of digital menus and social media. and payment processes through such platforms as Apple Pay. Ultimately this leads to a better overall brand experience for customers as both segments will continue to fight for market share in our highly-competitive, consumer-driven environment.”
  • Private clubs are blending with traditional hotel real estate; cross-pollination of skill sets are inevitable for employees. According to AETHOS Los Angeles Managing Director Matt Peterson, “The private club space will continue to evolve and innovate, attracting more leadership from the traditional hospitality (hotel & resort) space. In addition to the ‘typical’ private city and country clubs, and, with the influx of cash from venture capital and private equity firms, we will see new and specialized clubs beginning to appear in the near future. Data and analytics will continue to play a bigger role in understanding membership trends, desires and wants, as well as allowing the private club space to be more innovative in their offerings to the members and employees. All-in-all, it is a fascinating time to be involved, or to get involved, with the private club sector as they adopt new strategies, innovations and invest schemes.”
  • Cruises are catering to a new generation of customer, and employee. Hazelton also weighs in on the related global cruise sector, declaring that this industry will continue to evolve and innovate.  “Passenger levels continue to increase, new destinations are offered and the big brands will continue to focus a lot of their energy on Generation Z travellers who desire more authentic experiences than material items. Additionally, the recent travel ban to Cuba will take centre stage once again for this latter half of the year as Royal Caribbean, Norwegian and Carnival all announced that they will no longer be sailing there.” AETHOS partners are also finding that hospitality companies in various disciplines seek to optimize Sustainable Workforce Management, as Mielke will point out when he moderates the Sustainability panel during the September Seatrade event in Hamburg, Germany. “AETHOS is observing that in general, not only are cruise lines and other hospitality companies more engaged in social and environmental initiatives, but there is also a mind shift that has started to affect how organizations are holistically approaching sustainability measures. Yes, the public relations, marketing and operations teams are involved, but just as importantly, divisional leaders across the broad spectrum of roles are involved now as well. Firms have recognized the interconnectedness of the workforce and sustainability.”