Dominic Jones, director of JPRestaurants, tells Emily Moore the sector must think boldly and become more productive to survive the challenges posed by Brexit and Covid
‘A NEW normal.’ It was a phrase heard almost every day during the Covid pandemic and one which, in the past few months, has largely disappeared from the headlines.
But, as JPRestaurants director Dominic Jones reflects on the first full summer season since the lockdowns, that expression once again comes to the fore.
‘In the past couple of months, the hospitality industry has definitely hit a new normal,’ he said. ‘When you look at passenger numbers, footfall in town and revenue, a natural pattern has emerged and, while this may evolve slowly, I think this is the pattern that will remain for the foreseeable future.’
And while those numbers – which show a 40% decline in visitors from April to June compared with 2019 and a 25% drop in footfall in St Helier – may seem a little bleak, Mr Jones is keen to stress the wider role that hospitality plays in shaping the Island.
‘The big issue, if you look purely at numbers, is that hospitality represents less than 3% of GVA,’ he said. ‘However, the industry is vital for maintaining the quality of life that Islanders enjoy and for assuring transport links. At the moment, 60% of the traffic driving our transport links comes from visitors, not residents. If those visitor numbers drop, because fewer people are coming or because those who are coming are staying longer, that will impact our flight connections, which will affect both Islanders who want weekend breaks and holidays and also hinder recruitment.’
Elaborating on this point, Mr Jones added: ‘If, for example, a nurse or doctor is considering moving to the Island, they might be influenced by the fact that there are regular flights between Jersey and the UK, making it easy for them to travel home to visit family. If those flights become more expensive and less frequent, that could make the Island less attractive as a place to live and work.’
With recruitment cited as one of the biggest challenges facing a number of industries, Mr Jones is certainly not alone in calling for employers and the government to ‘think boldly’ about ways to make the Island a more attractive place in which to work.
‘Brexit has caused huge issues with recruiting people and bringing them to the Island,’ he said. ‘On a positive note, however, employers are now recruiting from across the world and are bringing in qualified staff who are offering a very high quality of service. The huge challenge, though, is that before Brexit, anyone joining the sector could have had a career spanning several years. Now, though, we are limited to employing people on nine-month permits or, at best, for three years, which means we can’t invest in the people we are bringing in.’
While Mr Jones maintains that the short-term nature of work permits is one problem facing the industry, he also says that the price and quality of accommodation is another barrier to recruitment.
‘We need to think more boldly about accommodation, particularly for people who have been here for less than five years,’ he said. ‘The Island should think about following Guernsey’s example and getting rid of housing qualifications in the rental market. Here, staff have to live in lodging houses which isn’t an attractive proposition.’
And accommodation is not the only area in which Mr Jones believes bold thinking is required if the industry is to flourish.
‘Just as the Island has reached an inflection point – as demonstrated through this summer’s elections – so hospitality has reached an inflection point,’ he said. ‘While the sector is not going to jump from generating 3% of GVA to 50%, we do need to ensure that the industry is strong enough to support our transport links and make Jersey a nice place to live. To do that, we need to acknowledge that “more of the same” won’t work. We need to start thinking pretty boldly about how we change and adapt our sector to enable it to flourish.’
A first step towards this, says Mr Jones, is making the sector ‘more productive and less reliant on staff’.
‘Since Covid, we have lost 1,000 visitor beds and I don’t see how we will build visitor numbers without building new hotels,’ he said. ‘Additionally, the challenges we have with recruitment and input costs mean that we need to find ways of becoming more productive and changing the offering. We have done that at JPRestaurants, using technology and reviewing areas such as process and opening hours to reduce the number of staff we need and to make ourselves as efficient as possible. And we are not the only business embracing technology.
‘If you look at Premier Inn, which has recently opened its second hotel in the Island, you will see automated check-in processes and customers paying for hotel rooms in advance, concepts which, ten years ago, people would have laughed at. While some businesses may be reluctant to change, we need to break away from a lot of our habits and received wisdom of how hospitality works and reinvent it if it is to succeed in the future.
‘We need to recognise that hospitality and agriculture will not look the same in 20 years as they do now, and we need to help people through that transition. In reality, I think we will end up with fewer hospitality outlets and fewer, bigger hotels but I think there is an opportunity to enhance the quality and customer offer and to provide better value for money as we become more efficient.’
The subject of value of money, and prices charged by hospitality providers, is a sensitive one, with some Islanders quick to criticise the cost of a meal out. However, Mr Jones is keen to stress that, while prices may be high, they are not indicative of a ‘rip-off’ culture within the industry.
‘As a sector, we are delivering a high-quality service but costs are an issue,’ he acknowledged. ‘Ultimately, customers are paying the price for the high input costs with which businesses are faced. These costs are in all areas from freight and imports to property prices and wages.
‘While there are no quick fixes to many of these issues, opening up freight routes to France and diversifying the crops grown locally would enhance our product while simultaneously lowering costs. I would say that many of our costs are now 20% higher than they were before Covid. As a result, profitability has gone down across much of the sector and many businesses are struggling to make a profit.’
While recognising that the higher cost base may suggest that the Island should be marketed to people with higher levels of disposable income, Mr Jones remains confident that there is room for both budget and luxury hotels.
‘I think there is a place for all ends of the market. However, given the costs of doing business here, it makes sense to target people who will stay in four- and five-star hotels and have the money to enjoy local dining experiences during their visit,’ he said.
‘On the other hand, we need to have a budget market as well, and this we can do through the less-service model, which also offers an opportunity for aspirational tourism. A lot of people will choose to visit a city or a country and book a cheap hotel so that they can spend their money on experiences.’
Identifying the Island’s target markets is, says Mr Jones, one of the biggest challenges facing Visit Jersey and those in the industry.
‘On the one hand, we have traditional visitors, whose numbers are dropping but who we don’t want to lose altogether,’ he explained. ‘On the other hand, we have to accept that this market does not represent the future. Therefore, we need to cater for them while also changing our business model to ensure longevity.’
On the topic of visitor numbers, Mr Jones says that, while there may be potential to boost the French day trip market, he expects any other increases to be ‘slow and incremental’.
‘While the summer was good, despite not hitting pre-Covid visitor numbers, I think the winter will be tough and that next year is unlikely to see any significant increase,’ he said. ‘If we can sort out the passport/ID card issue, which has hit the French day trip market, then we may see some changes there but, while that will boost footfall in town, it has a limited impact on revenue. Beyond that, I don’t think we will see a huge pick-up to make up the deficit. Travel is becoming more expensive, we are in the headwinds of a recession and more hotels are exiting the Island. As a result, increasing profit per room and profit per visitor will be more important than ever and that can only be achieved by being more efficient and making careful, targeted investments.’
Faced with such a picture, Mr Jones returns to the need for bold thinking and a long-term strategy to support not just the industry but the Island as a whole.
‘Jersey likes the idea of quick fixes and governments that can achieve change in four years but we need to look at the long-term horizon and accept that many changes implemented now will take ten-to-15 years before you see the full benefits,’ he said. ‘We need a 20-year strategy but it needs to be inter-related with education, finance, agriculture, housing, transport and the Living Wage. Hospitality needs to be recognised not just for its 3% contribution to the economy but for the role it plays in creating a vibrant island in which people want to live.
‘While we are undoubtedly going through a challenging period, this is also an opportunity to think differently and to adapt. There is a lot of good stuff going on but we need to turbocharge that and work together to make it even better.’