Hotel / Catering & Pub Management

The UK hospitality and catering industry encompasses a host of businesses, including: hotels, restaurants, pubs, bars and nightclubs, contract catering, holiday parks, self-catering accommodation, private members’ clubs and visitor attractions. It is a diverse sector that offers a host of opportunities to those wishing to move into it:

the chance to progress – nearly every job in this sector offers you the chance to learn, improve your skills and move up the career ladder to the next level – and, historically, Service leavers are very good at this
a dynamic and challenging industry – when you work in hospitality management no two days are ever the same, and opportunities exist both nationally and internationally
a popular second career option – many people coming into the industry have limited or no previous experience, but a Service background means that many of the skills required are already in place.

Although the sector offers a myriad of different jobs (such as kitchen and catering assistants, bar staff, chefs/cooks and waiting staff) this feature focuses on those that are most likely to be of interest to our readers.

An industry changing for the better
There can hardly be an area of the UK that is untouched by the hospitality sector, and it is one that offers job opportunities on a large scale. Despite this, it is an industry that has been affected by people and skills shortages – perhaps as the result of anecdotal evidence that perpetuates the image of an industry beset by low wages, long hours and hard work. However, another aspect of 21st-century hospitality careers is the drastic reduction (due to new EU regulations) over recent years in the number of working hours expected of hospitality managers, with responsible employers offering a 48-hour week with two clear days off. The industry, confirms Bob Cotton, chief executive of the British Hospitality Association (BHA), ‘is changing rapidly. A five-day week is now commonplace, and conditions of work can match the best across all industries.’ In addition to better working conditions, many companies offer outstanding performance-related bonuses, incentives, training opportunities and benefits.

The pub/bar and club (managed houses) sector of the industry has responded well to recent legislative changes and the current economic climate – by, for example, providing smoking accommodation and entertainment, and investing in properties to encourage family visits, offering venues for young people and developing catering offers. Some such national companies are reporting increases in overall sales and are therefore able to offer excellent employment packages. Such organisations are always on the lookout for quality candidates to join at supervisory and management levels, which is particularly good news for Service leavers. One recent example is JD Wetherspoon, the national pub chain known for its discount food, which last December announced plans to open 250 new pubs across Britain in a move that will create 10,000 jobs. There are nationwide employment opportunities for those seeking a career in this area, which does not require a classic ‘hotel school’ education for new entrants, and many national companies are crying out for good-quality applicants. So, despite the fact that the current less than sunny economic climate may be affecting many other sectors, the UK hospitality industry continues to thrive.

Hospitality and catering skills gained in the Services
As all the Services employ catering staff, it is likely that readers will already have gained useful experience of working in hospitality and catering roles. In addition, professional qualifications in hospitality and licensed retailing can be gained while in uniform, through distance learning and online, which will prove useful when thinking about moving into a civilian career in the sector.

TRANSLATE YOUR SKILLS
The skills required will depend on the area of the hospitality sector in which you wish to work, but there are some that are common to most jobs in the industry. These include:

being able to deliver good customer service
business skills
the capacity to stay calm under pressure
leadership by example
teamwork skills
commitment, energy and enthusiasm
effective organisation of people
desire for a challenge and to find ways to improve how things are done
sociability
strong desire to be successful
ability to set targets … and beat them.

Managers require the ability to think quickly and use personal initiative. New situations, changing customer requirements, and developments in equipment and work procedures require a constant willingness to learn and adapt. But, above all, your personality and approach to life are critical to success, which is why, says Kate Hempsall of Charles Wells, so many military personnel make such great licensees.

The managed sector
A manager operates premises as an employee of a company – for instance, in most high-profile town-centre national chains, large family eating pubs, and many community locals, restaurants and hotels. This sector of the industry has always been a popular second career choice for Service leavers and, with the recent changes in working practices, will continue to be so. Some national companies offer ‘fast track’, accelerated promotion to those who have completed an accredited resettlement course, and have the right attitude, motivation and ability. This grade of entrance is known as ‘Manager in Training’ (MIT). If you are selected for this, you can expect a general manager appointment in around nine to twelve weeks. Officers and NCOs may find themselves having to take a pay cut in the short term, but promotion comes quickly in hospitality management to those who are prepared to work for it.

Career progression
Career progression in the managed sector depends very much on the individual. The enthusiast who wants to get on and does well can move quickly into management. Many companies promote from within, although talented new blood is always welcome. The training available in some organisations is excellent. There are currently three main development routes:

going straight into the industry
attending a training programme run by a local college or training company
undertaking a full-time college or university programme.

Although direct entry to full management positions is not uncommon, most entrants to hospitality management, particularly with national companies, begin their careers as a trainee manager, assistant manager, shift manager or team leader. Point of entry is likely to depend on experience, ability and qualifications, as well as on how well the interview went, as first impressions count – you’ll learn all about this at your CTW event. These types of appointment (which may include relief management duties while the manager is absent) give you the chance to try out your newly acquired skills and the organisation the opportunity to assess levels of competence, and are usually a prelude to promotion to the role of general manager.

The self-employed option
As a free house owner or tenant licensee you are ‘your own boss’ – you run the premises your way, possibly with the support of a brewery or pubco. You plan and develop your business, employ your own staff (and pay their wages) and get to know your customers. In most cases, you can make your own pub what you want it to be – but it must be successful and, more importantly, profitable. As Kate Hempsall, Recruitment Marketing & PR Manager at Charles Wells, comments, ‘Licensees are the critical piece of the jigsaw in providing a great pub experience for the consumer and will determine how successful their pub business is, whatever the trading conditions.’ However, she cautions against entering into an agreement without doing all your homework first: ‘There are so many different options, it’s essential that you know what you’re looking for and investing in – seeking specialist financial, legal or other advice before signing up will help ensure that you are getting what you expect.’

Training and preparation are vital if you are deciding on this career option, as you will only get one shot at it. Success as a freeholder or newly appointed tenant means getting it right first time, so only those with the necessary confidence, commitment and capital should undertake this particular career option. There are several routes for Service leavers to consider, as outlined below.

The free house owner
You buy the freehold building and the business outright, and trade as you wish. (In certain parts of the UK, you may find yourself not owning the land that the pub stands on; in such cases you may be required to pay a small ground rent, but this generally doesn’t affect the purchase price that much and is quite rare.) You can normally borrow up to 70% of the ‘bricks and mortar’ value, but this depends on the economic climate, and you will need to produce a detailed business plan for your proposed lending source should you need to borrow from banks, brewers, pubcos or finance companies.

The leaseholder
Leases are either ‘new’ (a pub recently acquired by the owning company, a converted standard let tenancy – see below – or a managed house being converted to leasehold) or ‘assigned’, which means it has been in operation as a lease for a number of years and you will be purchasing however many years it has left to run. Most ‘new’ leases have conditions attached.

The lease is a legally binding contract for anything up to 30 years for a new lease, which you can sell on (assign) after two or three years, and is intended for the experienced operator only. You purchase the fixtures and fittings, the stock, pay a security bond and in most cases (new leases excepted) will be required to pay a premium (goodwill) for the value of the lease, depending on how many years the lease has left to run and how successful the business is at the time of sale. All prospective leaseholders will be required to pay valuation, legal and surveyors’ fees. You may also be asked to pay for the company’s own training programme, which may or may not lead to professional qualifications. However, most companies are prepared to waive this requirement if you have already attended an accredited resettlement course and have the relevant qualifications in place at the time of application.

Most leases operate under a purchasing agreement for stock, with some having either a full tie (you buy all of your ‘wet stock’ through the company) or partial tie (beer only and free for everything else); or they may operate a ‘total free of tie agreement’. You will also pay a rent to the owning company, the level of which will depend on the type of tie agreement in place. A similar agreement will operate with regard to ‘machine income’, and again this arrangement will be reflected in the rent being charged. Obviously, a ‘free of tie and 100% of machine income’ agreement will attract a much higher rent.

There are different types of lease available, and different conditions attached (e.g. it is a condition of most new leases that you remain in the house for a minimum period). Therefore you should seek professional advice from a good solicitor if you are considering this option. There are also things such as maintenance and repair costs to be considered, and it is essential that the company’s and lessee’s respective responsibilities are clarified in the early stages of enquiry.

The standard let tenancy
This is often considered to be the most user-friendly of the self-employed points of entry. It is the most common method used by regional brewers and pub-owning companies to operate their pubs. The incoming tenant purchases the fixtures, fittings and stock from the outgoing tenant (this finance is known as ‘the ingoing’), and pays a security deposit to the brewer/pubco. They will also need funds to cover legal and valuation costs, as well as some working capital to help them get started (i.e. pay their first brewery bill).

There is no ‘premium’ to pay as a new tenancy agreement is drawn up each time the business changes hands. This agreement will normally run for a three- to five-year term, with the opportunity to renew at the end of the term. However, many brewers and pubcos currently offer easier, cheaper and less legally binding types of agreement. These are sometimes referred to as ‘suck it and see’ deals, with the opportunity to transfer to a full standard let tenancy or lease agreement at a later date. These types of self-employed opportunity can, however, involve businesses at the lower end of the scale: small, poor location, poor reputation, difficult to let or, worse still, boarded up. They are sometimes marketed as ‘starter houses’ for newcomers to the industry or those with limited capital.

Tenants are subject to either a full or partial ‘tie’ for their ‘wet stock’. Many small regional brewers that operate tie agreements offer favourable rents in return for the tie. The tenant is usually responsible for internal decoration and the brewer/company for external. There are exceptions, though, with many brewers/companies offering five-yearly interior redecoration at little or no expense to the tenant. Should you wish to leave the tenancy, it is customary to give six to twelve months’ notice. However, most brewers/companies will make the effort to speed things up, and you could be out in 10–14 weeks with little or no financial penalty.

‘Private tenancies’ are also available. These usually involve either an individual or company that has purchased the freehold as an investment and wishes to let out the business as a tenancy. Such opportunities, along with those from brewers and pubcos, are usually advertised in the trade press (e.g. the Morning Advertiser and The Publican, both of which also have websites – see ‘Key contacts’).

As you will be responsible for all the running costs of the business, it is important that you are aware of all other serious expenses: in addition to wages, you will be responsible for business rates and utility charges. The type and style of pub you choose will directly affect the level of these charges.

HOW MUCH DOES IT COST TO GET STARTED?

Free trade – Prices, depending on the area, vary considerably – from £150,000 (bargain basement) to £1 million-plus. A good average would be £250,000 to £600,000. Additional funds will be needed to cover stock and glassware, legal and professional fees, and some working capital.
Leasing – Buying a new lease could cost in the range of £25,000 to £95,000 (depending on fixtures and fittings), and an ‘assigned lease’ (one already in operation) being sold on could have tens of thousands added on to the value as a premium (goodwill); assigned leases can change hands within the £30,000–£300,000+ range.
Standard let tenancy – Ingoings can range from an average £15,000 to £65,000 for a standard let tenancy, to as low as £2,000–£6,000 for short-term ‘starter house’ agreements (in such cases it is customary for the owning company to hold the fixtures and fittings). You just pay for the stock and glassware, plus a small security deposit. ‘Starter house’ agreements are sometimes known as ‘trust tenancies’ or ‘tenancies at will’. Houses with ingoings of £45,000+ are frequently catering houses, possibly with letting accommodation and, therefore, a higher level of fixtures and fittings. The security deposit (between £1,000 and £10,000) is held against non-payment of accounts and for repairs that are the tenant’s responsibility, and is refunded when you leave the pub.

Qualifications and training in the licensed trade
If you have limited, or no, current civilian hospitality experience, it is advisable either to undertake a course with a ‘built-in’ work experience module or at least find a way to gain some practical experience in the job – paid or unpaid. Although many companies run their own courses, you could find yourself in a ‘catch 22’ situation. Ideally, look for courses that offer BIIAB qualifications (BIIAB is the professional body for the licensed retail industry).

The principle qualification suitable for new entrants to the trade is the National Certificate in Licensed Retailing (level 2), which is the most commonly accepted qualification for entry at supervisory or management level. This is a two-part qualification that includes the BII National Certificate for Personal Licence Holders (NCPLH) and the Introduction to Licensed Retail Operations Certificate (ILRO). The NCPLH is required by licensing authorities before they will grant a Personal Licence, while the ILRO covers virtually all the subject areas relevant to the successful operation of licensed premises. There is also a range of advanced qualifications, with other certificates available.

Salaries
Rates of pay in the managed sector have risen considerably in recent years, with some companies offering amazing bonuses for hitting targets (something that Service people are good at!) to attract good-quality applicants. For people working in management or supervisory roles (those likely to be attractive to and achievable by Service leavers) in large companies, typical salaries might be:

trainee, assistant or shift managers £17,500–£24,000
house, unit or general manager £25,000–£65,000.

These earnings can be enhanced by substantial performance-related bonuses (up to 100% of salary in some cases), and benefits such as food and accommodation allowances, childcare vouchers, free shares and private health cover, further training as well as, of course, rapid promotion prospects.

In the self-employed sector, as a rough guide, a tenant/leaseholder should be able to draw a net profit on the bottom line of 10–20% of net turnover, depending on sales volume and quality of management. Generally, a freeholder can expect a much higher level of net profit. Loan repayments will also need to be taken into account.

KEY CONTACTS
British Hospitality Association (BHA), Queens House, 55–56 Lincoln’s Inn Fields, London WC2A 3BH Tel: 0207 404 7744 Website: www.bha.org.uk

BII, Wessex House, 80 Park Street, Camberley, Surrey GU15 3PT Tel: 01276 684449 Website: www.bii.org

BIIAB (awarding qualifications for licensed retail), Website: http://biiab.bii.org

British Beer & Pub Association, Market Towers, 1 Nine Elms Lane, London SW8 5NQ Tel: 020 7627 9191 Website: www.beerandpub.com

BarZone (specialist recruitment site for bar jobs), Cloisters House, 8 Battersea Park Road, London SW8 4BG Tel: 0870 728 8001 Website: www.barzone.co.uk

My Pub Life (website run by a conglomerate of several pub companies to provide an impartial introduction to the industry and what it involves) Website: www.mypublife.com

Herron House licensed retail training: visit the FAQs page of the website (www.herrontraining.com/faq.html) for information aimed specifically at Service leavers

Morning Advertiser Website: www.morningadvertiser.co.uk

The Publican Website: www.thepublican.com