How Equipment Investment Can Increase Winter Revenue in Hospitality

The summer season has ended and the leisure and hospitality industry faces new seasonal challenges of maintaining steady revenue during the winter months. However, the winter season presents a unique opportunity for growth in hospitality—particularly through strategic equipment investment.

In 2023, UK hospitality businesses reported a 55.2% increase in operating costs, with energy expenses being a major contributor, in addition to a further statistics revealing 45% of hospitality operators in the UK have been forced to cut capacity or opening hours due to shortages in staff, resulting in a 3.6% decline in employment in recent years.

Despite these challenges, leisure and hospitality businesses can maximise their winter revenue by leveraging equipment finance to enhance customer experiences, manage seasonal cash flow, and drive revenue even during seasonal fluctuations. In this blog, we’ll explore how investing in new equipment can be a game-changer for your business this winter

Enhance Customer Experience with Modern Equipment

In the hospitality industry, customer experience is everything. During the winter months, when competition for customers’ attention is fierce, the quality of your equipment can make a significant difference. Whether it's upgrading your kitchen appliances to improve food quality and speed of service or investing in modern heating systems to ensure a cosy atmosphere, new equipment and machinery can elevate the overall experience for your guests.

Benefits of Investing in Equipment and Machinery:

• Improved Service Efficiency: Modern equipment can streamline operations, reducing wait times and increasing customer satisfaction.
• Enhanced Ambience: Upgrading your furnishings, lighting, or heating can create a more inviting environment that encourages repeat visits.
• Higher Quality Offerings: Advanced kitchen and bar equipment can lead to better food and beverage quality, setting your business apart from the competition.

Attract Customers During the Holiday Season

Winter may bring a lull in general tourism, but it also offers a surge of opportunities, particularly around the festive season. By using equipment finance to fund renovations or expansions, you can transform your venue into a must-visit destination for holiday events, work parties, and gatherings.

Strategies to Attract Customers:

• Event-Specific Equipment: Consider purchasing or leasing equipment for special events, such as outdoor heaters for winter markets or sound systems for holiday parties.
• Expanded Offerings: With the right equipment, you can introduce new services or menu items, like a winter-themed cocktail menu or a festive afternoon tea service.

Manage Seasonal Cash Flow with Equipment Finance

One of the biggest challenges hospitality businesses faces during the winter is managing cash flow. With fluctuating customer volumes, it can be tough to cover operating expenses, let alone invest in new equipment. This is where equipment finance comes into play. By spreading the cost of new equipment into manageable payments over time, you can maintain a healthy cash flow while still making the necessary investments to keep your business competitive.

How Asset & Equipment Finance Helps:

• Preserves Working Capital: Rather than depleting your cash reserves, finance options allow you to spread payments over time, making it easier to manage day-to-day expenses.
• Flexible Payment Terms: Equipment finance often comes with flexible terms that can be tailored to your business’s seasonal revenue patterns, making it more affordable to obtain new equipment and machinery.
• Tax Benefits: In some cases, the interest on equipment finance payments may be tax-deductible, providing further financial relief.

Embracing Growth Initiatives For Long-Term Success

Winter can bring short-term revenue fluctuations for leisure and hospitality businesses, but it’s also the perfect opportunity to focus on long-term growth initiatives. Whether you’re planning a major renovation or expanding your services, equipment finance can provide the funding needed to execute these projects without putting undue strain on your finances.

Growth Opportunities:

• Renovations and Upgrades: Consider undertaking renovations that will enhance your business’s appeal during the peak-seasons. Read our success story about how we helped a family run-pub pub and restaurant to renovate a roof terrace.
• New Service Launches: Invest in equipment that supports new service offerings and efficiency, such as catering for corporate events.
• Staff Training: With modern equipment in place, you can invest in staff training to improve efficiency and service quality, positioning your business for success in the long term.

Is Asset & Equipment Finance Right For Me?

Asset and equipment finance is a valuable tool that can support your hospitality business’s growth, but it's important to secure the right deal for your business.

Asset finance allows you to acquire essential equipment, machinery, vehicles, or other assets without the need for an upfront lump sum payment. Instead, it allows you to spread the cost over time, making it easier to manage your cash flow while ensuring you have the resources needed to enhance your operations.

What Can Asset Finance Fund?

In the leisure and hospitality industry, businesses often require funding for various assets to enhance operations and customer experience. These assets are typically categorised as hard or soft assets:

Hard assets

Hard assets are high-value items, often types of machinery and vehicles required to keep your business moving. These are long-term assets that can retain their value for many years.

• Vehicles: Shuttle buses, coaches, mini buses, delivery vans, good vehicles, and service vehicles.
• Industrial Cleaning Machines: Floor scrubbers, floor sweepers, industrial vacuum cleaners and steam cleaners.

Soft assets

Soft assets are lower-value items that help staff perform their jobs and provide a productive working environment, such as furniture, IT and security equipment, telecoms and sector-specific tools.

• Kitchen Equipment: Commercial ovens, refrigerators, and dishwashers.
• Furniture: Tables, chairs, and décor for guest areas.
• IT Equipment: Computers, tablets, and networking hardware.
• Telecommunications: Phone systems and communication devices.
• Software: Reservation systems, accounting software, and customer relationship management (CRM) tools.
• Marketing Materials: Signage, menus, and promotional items.
• HVAC Systems: Heating, ventilation, and air conditioning units.
• Laundry Machines: Industrial washers and dryers.
• Fitness Equipment: Gym machines and wellness centre apparatus.
• Security Systems: Surveillance cameras and access control systems.
• Point-of-Sale (POS) Systems: Comprehensive sales and transaction processing units.

Funding these assets through financial solutions like asset finance can help businesses manage cash flow effectively while ensuring they have the necessary resources to operate efficiently and provide excellent service.

Benefits of Asset & Equipment Finance

• Access to High-Value Assets: Enables the purchase of expensive equipment and machinery that might otherwise be out of reach.
• Flexible Financing Options: Tailored repayment terms that align with your business’s revenue cycles, reducing financial pressure during slower periods.
• Capital Preservation: Keeps your working capital intact, allowing you to invest in other areas of your business.
• Ownership or Leasing Options: Choose between owning the asset at the end of the term or leasing it, depending on your business needs.

Conclusion

By strategically investing in new equipment and leveraging asset finance, you can enhance customer experiences, attract more visitors, and manage your seasonal cash flow effectively. Equipment and asset finance offer flexible and practical solutions to help you make these investments without compromising your financial stability.

At Millbrook Business Finance, we’re here to support your business’s growth every step of the way. Explore our financing solutions today to discover how we can help you meet your hospitality business goals. Start your funding journey to make this winter season a prosperous one today by checking your eligibility now or using our business finance calculator.