Rising costs in hospitality have reached crisis levels. 31% of operators ran their businesses at a loss in Q1 2025 (UKHospitality), with nearly three-quarters struggling financially when you include those breaking even or seeing reduced profits.
Since the latest budget alone, 69,000 hospitality jobs have been lost, with projections reaching 200,000 (nfff.co.uk). But some operators are thriving despite these pressures by using data to control what they can.
Industry experts Simon Blackbourne (Ometis Business Development Director and Tahola Co-Founder), Chris Fletcher (Tech on Toast founder with 45,000+ community members), and Jon Townsend (former New World Trading Company operations leader) share exactly how smart operators are fighting back.
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The numbers are stark. Rising costs in hospitality aren't just about one or two areas - they're compounding across every aspect of operations.
"These challenges are evergreen in hospitality," explains Chris, who spent 20+ years running operations for major brands like Carluccio's and Hard Rock Cafe. "What we're seeing now is consolidation where operators are looking holistically at their businesses."
The unavoidable cost increases:
Jon, who recently joined Ometis from New World Trading Company, puts it simply: "You can't control the increases in national living wage or energy costs. You've got to go back to basics and control what you can control."
The operators surviving this crisis have figured out how to optimise labour, inventory, and operational efficiency while others struggle with manual processes that amplify every cost pressure.
Here's what most operators don't realise: their technology is making the cost crisis worse, not better.
"The biggest problem we see is people building tech stacks on top of old tech stacks," Chris observes. "There's problems with integrations, and automation not being built in."
Picture your typical Monday morning. Your area manager logs into the POS system for weekend sales figures.
They check Teams for operational updates. They Open another platform for customer feedback scores. Then they manually compile everything into a spreadsheet for the weekly report.
This routine wastes 8-12 hours weekly across the team - time that should be spent on cost analysis and operational improvements.
But the real damage goes deeper. When forecasting fails because systems don't talk to each other, you end up overstaffed during quiet periods or understaffed when busy. Both scenarios cost serious money.
GDK restaurant group faced exactly these challenges. Their finance team was drowning in manual reporting, spending entire days each week just collecting data from different systems.
The solution? They eliminated 35 spreadsheets from their weekly process and automated the entire workflow. The result: over 300 hours saved annually. Read the full case study here.
"Rather than someone sitting there for hours pulling reports and sticking them into one, automation does it for them," Jon explains. "What they can do with that time is analyse it and provide insight to the business."
That's 300 hours their finance team now spends on actual cost management instead of data compilation.
Managing 300+ restaurants, PizzaExpress had a different problem. Their reporting systems crashed regularly under data volume, making cost control nearly impossible.
After implementing integrated Qlik architecture, wen helped them achieved:
"That's the linchpin of the hospitality business," Jon explains. "You get your forecast right, you've got your staffing based on that forecast, you've got your stock based on that forecast."
When your forecasting improves by even 10-15%, the labour cost savings alone can make a significant dent in rising operational expenses.
See more of our work here.
Getting labour forecasting wrong doesn't just waste wages - it creates expensive ripple effects that hit every part of your business.
Jon knows this from experience: "The danger is if you just take a hatchet and start cutting hours. The only person that really suffers is the customer."
Understaffing consequences during busy periods:
Overstaffing costs during rising cost periods:
Modern forecasting systems analyse weather patterns, local events, historical data, and real-time booking trends. This typically improves accuracy by 15-25% compared to manual methods - savings that directly offset rising costs elsewhere.
New World Trading Company discovered something surprising when they started analysing their data properly. Jon shares the story: "40% of all olives across 35+ sites were being sold by one individual in one site."
Nobody knew this was happening until integrated data revealed the pattern. But here's why it mattered for cost control: understanding what this person was doing differently allowed them to train the technique across all sites.
The drinks-per-cover analysis proved even more valuable for fighting rising costs. Some locations averaged 1.2 drinks per customer, others achieved 2.1 drinks for similar demographics.
"We really struggled to get this information out of the EPOS system," Jon explains. "We built logic that said this is what we classify as a drink, this is our cover count. Give us one number and let us track it by site, by day of the week, by hour."
That single metric helped identify which teams were maximising revenue per customer - crucial when every transaction needs to work harder.
When you're running 100+ sites and every cost increase hits your bottom line, you can't afford to review everything manually.
"Maybe there's a few people that want to know everything," Jon observes, "but operators just need to know who's performed exceptionally well and who's performed below where we were expecting."
This "exception management" approach transforms how teams respond to rising costs:
One customer told them recently: "Having the system in place, I can now track my NPS score against my sales over time. I can look at it by individual site or multiple sites and see correlations that would be impossible with separate systems."
This type of insight helps optimise both customer experience and revenue simultaneously.
Chris highlights a crucial shift in hospitality management: "The leaders running businesses today grew up with an iPhone. Their expectations of having data mobile-first ready at the touch of a button is now standard."
When every cost increase threatens profitability, managers can't wait until they're back at the office to spot problems.
Modern operators need:
"If you've got mobile-first data ready in seconds, you are going to win," Chris predicts. "It's going to be a competitive advantage."
Here's a cost most operators don't even realise they have: communication chaos.
"How do teams communicate?" Jon asks. "Is it Teams? Is it Slack? Operators work like WhatsApp in this uncontrollable bubble."
With Meta's workplace platform closing, there's immediate opportunity to fix this. Professional collaboration tools integrated with operational data can eliminate:
Not all technology helps with cost control. Chris warns against unfocused implementation: "If you haven't got a real use case where you can apply it and see a real result, it's fairly dangerous and distracting."
AI applications delivering measurable cost savings:
Jon sees AI's greatest value in "machine learning, including predictive analytics, helping operators manage businesses rather than asking your system what were my sales yesterday."
Chris shares a story from Carluccio's that illustrates how data fights rising costs: "We took off pasta fagioli based on feedback from five or six sites. When we analysed the data properly, we'd taken away one of the best-performing dishes in the company."
The lesson? Even experienced operators can miss crucial patterns without proper data analysis. "It sounds really stupid to do that," Chris admits, "but we were focusing on margins and costs" rather than overall performance data.
With food costs rising everywhere, this type of insight becomes crucial for menu optimisation.
"Being able to understand exactly what we're selling by location and by day part is absolutely invaluable," Chris emphasises.
At Prime Minister, they had 16-20 different pie varieties that looked identical to customers but had different costs and margins. Chris explains how ranking them by actual performance data transformed their menu strategy completely.
The operators succeeding despite rising costs share one thing: they've stopped accepting manual processes that waste time and money.
"People are asking for help, which is very different to 12-24 months ago when it wasn't really on the agenda," Chris observes.
Quick wins that deliver immediate cost savings:
Simon explains: "We don't just deliver technical implementation. We consult on the most viable and ROI-focused action plan and help choose the right vendors unbiasedly."
After working with 250+ UK hospitality businesses, they've seen that successful cost control starts with honest assessment of current pain points, not feature shopping.
The technology exists to help operators regain control despite rising costs. The question is whether you'll implement these solutions before the next round of cost increases arrives.
Rising costs in hospitality aren't going away. But the operators using data to optimise what they can control are not just surviving - they're positioning themselves to thrive when conditions improve.
Learn more about our hospitality solutions - see how we've helped 250+ UK businesses control costs and improve efficiency
Check out Tahola-AI, a fully managed reporting solution for hospitality operators looking to eliminate manual processes and delivers insights automatically.
Speak to an expert - book an informal call to discuss your specific cost challenges and see how we can help: