Budget prediction is now an art, not a science, says Robin Hutson
Predicting next year's budget just got a whole lot harder, says Robin Hutson
So, the extended summer and warmer than average autumn temperatures have now well and truly given way to a typically dark and wet November. Quite apart from it being one of my least favourite months of the year (pipped to the post for that honour only by miserable February, which frankly I would like to see cancelled from the calendar altogether), I have always found November one of the month's hardest to business forecast, sandwiched as it is between late summer and the festive revelry.
This year, of course, has been particularly challenging to fathom, as we find ourselves in the eye of yet more political and economic instability. Q4 is for many of us the time when we set the following year's budget, certainly this year's ‘budget crystal ball gazing' has very little to do with historical data and reference points and a lot more to do with gut feel and guesswork. It really has become an ‘art not a science'.
With every cost line of the business under pressure, many with double-digit increases over the last year and some, such as energy, touching unthinkable levels, it's hard enough. But couple that with only short-term guaranteed government support, the dismal predictions about consumer confidence and the uncertain spending power of our guests (as they too battle with inflationary pressures), and this routine process of budgeting becomes an almost impossible task.
In the past, even with our busy restaurants and high occupancies at the Pig, I have always resisted the temptation to be overly bullish with our annual room and restaurant price increases, but now we simply cannot absorb any more and will need to pass some of that on to our customers.
The many variables and unknowns can so easily unbalance the fine line equation of predicting profitability in 2023. What's more, this quandary, that all hospitality businesses up and down the country are wrestling with, has been made all the more difficult, because to find a normalised reference point we are looking back to 2019!
But enough already of this doom and gloom. The one thing our sector has shown time and time again is the positivity and reserves of resilience we somehow always find.
There have been a few high spots in the past few weeks: last Saturday we held our Annual Fine Wine Auction and Dinner for Action Against Hunger at 1 Lombard Street. The 170 diners enjoyed some really fabulous and interesting dishes from Atul Kochhar and Philip Juma and we raised an incredible £465,000 on the night to help fight malnutrition. This amount is a new record since we started the event 16 years ago. It really was an incredible effort by all involved, and though not entirely predictable, it was certainly a result that we might have hoped for from our generous guests.
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