Introduction to Profit Growth in UK Leisure and Hospitality
In my last Insights Blog, I discussed the economic headwinds facing the UK Leisure and Hospitality sectors and the importance of strategic cost management to mitigate financial risk. This article looks in more detail at the strategic levers I would recommend all owners and operators should have on their strategy plan in order to not only ride the current storm, but to emerge stronger, with a more profitable and agile business for tomorrow, a key aim for any UK hospitality operator navigating market volatility.
The economic and commercial challenges in the sector are unprecedented, including a 16% National Living Wage increase over the past 2 years, higher employer NI burden and persistently high inflation in key costs such as energy and ingredients. Consumer spending behaviour remains cautious, with over a third planning to cut back on eating out. This combination leaves operators in what could become a precarious situation, with margins squeezed and revenues struggling to grow.
Strategic P&L management is critical at any point in a business development strategy, but even more important when external factors place additional strain on growth plans. Panic decisions and drastic cost cutting may work in the short term, but carry the risk of extrapolating into an unsustainable operating model or impacting on guest experience. From my extensive experience in driving forward leisure strategy, I advocate a smarter P&L approach, working from top to bottom, looking at a granular level at all drivers of profit and fully understanding the impact, and potential consequences of each action. Operators must act decisively to navigate the current trading landscape, leveraging targeted strategies to protect margins while seizing opportunities to gain market share.
My approach focuses on strategies I refer to as levers. The simple definition of a lever is a tool that can turn something on or off, or can change the direction of something. This is exactly how I approach establishing levers and then implementing them into an operation. A lever doesn’t have to be introduced immediately. I always see them as a bank of potential actions which should be regularly reviewed and maintained. They can be considered for implementation based on market conditions and trading and at the optimal time for the business to give maximum positive (or potentially minimum negative) impact to the company.
Below, I introduce five of the most important key levers I would generally have on my trading strategy checklist, particularly during volatile trading conditions:
- Revenue Innovation in UK Hospitality & Leisure
- Direct Cost Efficiency
- Technology and Innovation for Profit Growth
- Labour Scheduling
- Operational Optimisation
These levers are derived from a career at the forefront of leisure and hospitality strategy and I believe every business in the sector can achieve positive gains from a deep dive into each. They can be implemented either individually or through a combination of actions, to enable businesses to drive profit growth, without resorting to a default action of drastic cost-cutting. Tailored to each business’s unique circumstances, they offer practical pathways to efficiency and resilience, ensuring long-term stability and growth in a challenging economic landscape.
Revenue Innovation in UK Hospitality & Leisure
Revenue innovation can be a simple extension of existing operations or from activities which engage thinking more outside the box. It’s important to ensure strategies which target revenue growth do not jeopardise guest experience or undermine brand identity. For businesses across leisure and hospitality, actions could start with small, strategic enhancements, for example, considering dynamic pricing development, second gate or upsell strategies or curated experiences that add perceived value, without needing significant operational changes.
For example, family attractions have seen significant success from introducing premium entry (VIP) packages with perks like fast track queuing and inclusive food bundles, increasing spend per head by as much as £4 to £5. Similarly, cafés and bars have seen positive results from limited run menus and drinks promotions that showcase local producers, allowing for upsell without overhauling the offer. In accommodation settings, bundling rooms with late checkout, Food & Beverage credit or entry to local attractions or experiences have been seen to stabilise revenue during shoulder seasons.
Membership schemes and loyalty programmes, especially those using customer data to serve tailored offers, can encourage repeat visits and increase lifetime value. Under these strategies, the key driver of revenue comes from converting secondary spend. Member discounts on Food & Beverage or Retail spend has been proven to increase member spend conversion, leveraging the guest’s perception they have not physically paid for the visit on that day. Other examples could include merchandise, second gate events or behind the scenes experiences to tap into emotional engagement and diversify revenue. These initiatives work best when anchored in what makes your brand unique, creating a connection for the consumer to buy in to.
The goal of revenue innovation isn’t to charge more for the sake of it. It’s about creatively matching your commercial model to evolving consumer preferences. Revenue innovation in UK leisure and hospitality doesn’t need to be big, bold, or expensive. It does need to be thoughtful, smart and well executed.
Direct Cost Efficiency
In the margin sensitive environment that is leisure and hospitality, direct cost efficiency should never involve indiscriminate cutting. Efficiency should be driven from properly understanding the direct cost base, making smarter decisions about your product components, deep diving into your procurement strategy and making decisions about smarter spending. In simple terms, operators need to understand exactly where the money is going and exactly how much value is being achieved in return. Food and beverage costs, for instance, typically account for 25 to 35% of turnover in restaurants. Small adjustments here can make a meaningful impact.
One of the most effective strategies is rethinking supplier relationships. Many businesses operate with historical, sometimes outdated contracts or rely on large, centralised distributors which can easily detract from regularly benchmarking prices. Re-tendering your supplier contracts every 12 to 18 months, or engaging in group purchasing schemes with local operators have been proven to deliver significant savings. Many operators have seen improved terms just by consolidating orders across fewer suppliers or shifting to seasonal and local sourcing.
Another lever to drive direct cost efficiency is inventory management. Wastage, particularly in perishable goods, can add up very quickly. What should be an acceptable level of wastage? When an operator says to me “we accept our wastage levels will be between 2.5 and 3%” I immediately challenge this. You may accept it at that level, but what have you done to investigate levers which could improve it? Do you fully understand your stock management system? Are you properly using it to track product usage and expiry dates? Do you have flags set for over ordering? Do you have historical revenue patterns in your purchasing models?
Batch cooking, cross utilising ingredients across menus, or even reworking the menu entirely to focus on fewer ingredients with better margin performance can streamline both kitchen output and purchasing.
Another key area which is often overlooked is portion control. It is all too easy for a business to unintentionally give away profit in oversized or inconsistent portions. Clear plating guides, staff training, and standardised recipes help deliver consistency while protecting margin.
Finally, audit your direct costs regularly. Are you still paying for underused linen services, bottled water deliveries, or third-party services that no longer add value? I would always recommend at least a twice yearly review of direct cost expenditure, making sure every pound committed is a pound well spent.
Technology and Innovation for Profit Growth
When used strategically and with sufficient investment into pre-implementation planning and training, technology in hospitality and leisure isn’t just a support function, it is absolutely a profit driver. However, it has been shown many operators either overinvest in shiny tools they don’t fully use or avoid technology altogether, out of fear it will compromise their brand or take away from the human touch. For me, the real opportunity lies in applying the right technology in the right places at the right time.
When did you last step back and look holistically at your systems, your processes and your staff’s training and competency? When thinking about operational efficiencies it is so important you ensure your back of house technology, for example, digital procurement platforms, stock tracking applications and integrated EPOS systems, are fit for purpose and properly understood by those using them. Simple actions can easily assist with tightening controls or reducing waste. For example, platforms that automatically flag over ordering or track yield loss can help kitchen teams respond in real time, but only if they are properly set up, maintained and staff are properly trained and competent to work with them. Similarly, energy saving technology, such as smart thermostats, LED retrofitting, and usage monitoring can bring noticeable gains, particularly as energy remains a volatile cost pressure in the sector.
Customer facing technology, when properly scoped and thoughtfully integrated, can drive both revenue and guest satisfaction. Self-ordering at tables via QR codes or tablets can reduce the staffing burden during peak periods, increase order accuracy and even lift spend per head if cleverly implemented with additional visual upsells. A recent report I read highlighted a bar chain that introduced app-based ordering and saw an impressive 12% increase in drink add ons per round. This is a typical example of what smart investment in technology and innovation can achieve. However, this only works when the experience is seamless. Don’t try to cut corners or ignore other factors which could impact on your technology success… slow WiFi or clunky menus can very easily frustrate rather than enhance!
Innovation doesn’t have to mean full automation. It can be as simple as integrating a booking system with optional upsells or offering digital loyalty cards that track repeat visits and incentivise return. In many cases, where these initiatives are enhancements to existing systems, solutions can be provided for a nominal cost, or within an existing 3rd party development agreement.
The most effective technology investments are driven by purpose, not pressure. My advice when it comes to investing in technology and innovation for profit growth would be to begin with a clear problem you’re looking to solve or a very specific, measurable goal you want to hit. Ensure you calculate the expected return on the investment and pay back period for the cash outflow. Take adequate time to scope, find and implement the solution. Then build in adequate training and rollout time to make sure your teams are fully competent and importantly fully buy into it. In UK hospitality, innovation that feels organic rather than imposed can transform how businesses operate, scale, and serve their customers and importantly, drive profitability.
Labour Scheduling
Labour, and in particular, seasonal labour, is often the most expensive line item on a leisure or hospitality P&L account and, at the same time, one of the easiest to mismanage. For businesses across the sector, staffing inefficiencies will quietly and quickly erode profit growth if they are not appropriately identified.
Overstaffing during quiet periods or understaffing at peak times both impact negatively on profitability and guest experience. Smarter labour scheduling requires being more flexible and adaptable with how, when, and where people work.
In my opinion, effective labour scheduling starts with data. In the current age of technology, any operator with any material level of variable employment should not accept a strategy of scheduling based on habit or anecdotal ‘gut feel.’ Key data, such as insights into sales patterns, historical and projected footfall, weather, and event calendars, should allow you to predict demand with a lot greater accuracy. Whether it’s a family attraction planning for school holiday peaks or a bar seeing Friday post-work surges, aligning rotas with real-time patterns matters. Even small adjustments, like staggering start times or changing the balance of full vs part-time staff, can have a positive impact on required labour hours and contribute meaningfully to long-term profit growth.
I am an advocate of recruiting multi-skilled roles where employees are cross trained to work between different roles. For example, within a cinema, one staff member could work between box office, food and beverage, and usher, enabling the creation of more flexible rotas which don’t rely on overhiring. I read a report recently which showed one family entertainment centre reduced seasonal labour costs by 12% simply by enabling core staff to shift roles during changes in demand points. In hospitality, having servers trained in bar or kitchen runner duties can ease bottlenecks without extra headcount. For these strategies to work, clear job descriptions and clear instruction during the recruitment process is key. Attempting to impose changes on staff responsibilities once they have been recruited can be problematic.
As mentioned, technology can play a significant role in efficient workforce management. Systems now make it easier than ever to plan rotas around forecasted demand, set rules for shift length and rest time, and manage last minute changes. These tools also support employee engagement and ownership, with apps that let team members swap shifts or set availability to reduce burnout and absence rates, which, as we all know, can be high in the leisure and hospitality sector. It’s a proven fact: when staff feel empowered, retention naturally improves, an often overlooked driver of profit growth.
Finally, I should stress, labour efficiency shouldn’t come at the expense of health and safety or guest service. Efficiency should protect ‘high-touch’ moments such as welcomes, personal interactions, and thank yous, and that same efficiency should find ways to automate or reduce the admin tasks that pull staff away. Strong scheduling helps maintain service standards even under pressure, while keeping payroll costs aligned to actual need. In today’s climate, that balance is key to both survival and sustainable profit growth.
Operational Optimisation
In simple terms, I would define operational optimisation as working smarter, not harder. Streamlining how your business functions so every minute, square metre, and pound works harder for your bottom line. In both hospitality and leisure, where customer-facing experience is everything, optimisation must maintain or enhance guest satisfaction, not erode it.
For me, operational optimisation starts with process mapping, aligned to internal procedures and any specific regulatory or health and safety requirements. Walk through your customer journey step-by-step: how many staff touchpoints are there and are any duplicated? Are you starting your pre-opening activities at the optimal time? Are you scheduling your cleaning tasks to start too early or to finish too late? Spend time observing the current resource levels in operation and monitoring to what extent they meet the business need. Never accept the notion “it’s worked like this for years so therefore it must be right…” The reality is, it has probably worked like it for years because it has never been properly reviewed. Optimisation here can directly translate into enhanced profit growth.
Flexible facilities utilisation and therefore flexible staff requirements can also make a big difference. Do you need every space open, every hour? Adopting show times or rotating space utilisation is a simple and effective way to drive efficiency. I am aware of a soft play centre which made a noticeable saving on its utilities and staffing costs by closing an underused party room on off-peak weekdays without any adverse effect on guest experience.
From my extensive experience, technology can play a supporting role in driving efficiency, but it should not be considered a silver bullet in isolation. I would always advocate systems that reduce administration or empower teams. For example, POS setups that streamline ordering, automated reporting tools, or real-time dashboards which show KPIs such as waiting times, spend per head data, or guests on site. The goal isn’t for systems to just provide visibility but to give your team the right information to make the right decisions and to act fast, all adding to sustainable profit growth.
Most importantly, optimisation should be continuous. Those regular walk-throughs with your senior team asking “Why do we still do it this way?” can, and in most cases do, reveal surprising inefficiencies. In a volatile landscape, tightening up operations not only has a positive impact on cost exposure, it also supports agility, resilience, and protecting the experience that keeps customers coming back. That consistent operational clarity is a foundation to achieving sustainable profit growth in hospitality and leisure.
The Benefits of Fractional CFO Support in Driving Profit
In a sector as dynamic and margin-sensitive as leisure and hospitality, financial clarity should never be seen as a luxury, it should always be seen as a necessity. But I recognise not every business needs (or can justify) a full-time CFO. That’s where fractional support can make a significant difference. The outputs you should expect are high impact, strategic financial leadership delivered flexibly, affordably, and with the insight and precision to drive meaningful change and long term profit growth.
As a fractional CFO with deep, hands-on experience in this sector, I help businesses cut through the noise and focus on what truly moves the dial. That means diving deep into your P&L, walking the walk, experiencing the operation, not just reviewing numbers, but understanding what they’re telling you operationally. I’ve overseen the financial strategies for businesses that average 1,000 visitors a week to ones that average 40,000 plus visitors a week. I have developed revenue models, re-written operating strategies, implemented systems to support efficiency and drive guest experience, and have decades of real-life experience of where profit growth can be found.
Fractional support gives you access to tailored expertise at exactly the right level. I can work with you to optimise pricing strategies, dynamic forecasting, operational procedures, system implementation, or supplier negotiations.
Beyond numbers, I act as a strategic partner to founders, General Managers, and Boards, helping turn instinct into insight and gut feel into evidence. I don’t bring templates. I bring a toolkit, shaped by decades working inside leisure groups, hospitality chains, and venue based businesses, to help you design systems and processes that are focused on driving profitability, but also that fit your team, your offer, and your pace.
Whether you’re restructuring, scaling, or simply trying to stay one step ahead of cost pressures, fractional CFO support helps you understand your real position and build the kind of financial infrastructure that keeps you agile, resilient, and ready to grow.
Closing Insight
Driving profit growth in today’s leisure and hospitality landscape demands so much more than just an exercise in cutting costs. It calls for a much more holistic approach that considers all elements of the P&L and that provides management with tools to enable clarity, creativity, and control. The businesses that will thrive are those that innovate with revenue strategies, continually review operations, and use data to inform and lead, not to react.
I do firmly believe, from my experience, all businesses can obtain benefit from considering the levers I have presented in this Insight. I would hope you see it as an opportunity to sharpen your offer and to take action to strengthen your bottom line. The key is not to try and do everything, but to do the right things for your business, in the right order. With the right financial partner by your side, that becomes a whole lot easier. Sustainable profit growth isn’t found in spreadsheets alone. It’s built through insight, intention, and relentless focus on what matters most.
