Flat, fickle, fierce - a universal truth?

Flying into a country like Argentina with an inflation rate hovering around 200% does, I have to admit, instil a certain level of nervousness. What economic chaos will be there to greet us on our long-planned New Year trip to South America?

With the volatility of the Argentine peso, all the advice was to take US dollars as a back-up currency. But there are four or five official or unofficial exchange rates and when you do change a single 100 dollar bill you receive a wad of notes in the local currency that wouldn’t be out of place in a second-hand car salesman’s trouser pocket. None of this does anything to improve confidence.

But the truth is that life for most in Buenos Aires appears to go on much as normal. Things work.

We might have expected empty bars and restaurants. Far from it. Getting a reservation in even mid-ranked restaurants was almost impossible - so it was good we’d booked a few prime spots in advance.

The very best establishments - and there are some seriously high-quality places to eat out in the Argentinian capital - were full at least two months out. The country has just been awarded its first Michelin stars.

It wasn’t just the top end. Finding a seat at the numerous food stalls in the bustling San Telmo market on a Sunday lunchtime was equally as challenging, as locals and tourists jostled for a space. Put simply, it was rammed.

Make no mistake, the Argentine economy is in a precarious state, and there are plenty of signs of real poverty on the streets. But those with money are spending it - and, it seems, much of it on going out to eat and drink.

And yes, you know where this is leading.

No matter how dire the world may look, going out to socialise and break bread remains a strong universal desire.

Hospitality has strong roots - and globally. That may not be much solace for those struggling to stay in business, whether here in the UK or down in the southern hemisphere. But there is an inherent resilience to the market - it isn‘t going away anytime soon.

Before Christmas, it was interesting to hear from UK Hospitality‘s CEO Kate Nicholls that she still talked to people about a ‘flat, fickle and fierce‘ market - a phrase first coined back in the now defunct Peach Report in 2013 to describe the then state of eating and drinking out.

Despite the ebbs and flows of the marketplace, and changing fortunes of those working in it, the hospitality arena remains fundamentally the same. It is essentially flat. Real growth across the sector is hard to find - although individuals can and do gain market advantage. That also means that it is relatively stable.

Competition remains ‘fierce’ - it’s the nature of an open market - and consumers ‘fickle’, as tastes, habits and spending power shift. They all bring their own form of volatility to the table - but within an enduring framework.

That in itself reveals the strength but also the weakness of the market - especially when arguing for more support for the sector, say from Governments. Why does a market that is essentially stable - and where there are plenty examples of success to pit against the stories of business casualties - need help?

But as Paul Flaum, CEO of Bourne Leisure, a company doing well from a boom in domestic holidays, argued on Radio 4 this week, a specific cut in VAT for hospitality, for example, would only boost the sector and, in his case, tourism even more. And it can only do that because it has a stable base on which to build.

It also highlights the dilemma hospitality has in whether to focus on the negatives - the human cost of business failures - or the positives of a business sector that can endure and prosper, even in the tempestuous economic climate that is Argentina.

It’s not easy - but people want what restaurants, bars and food markets have to offer, right around the planet.

Where’s the innovation?

Eating and drinking our way around Argentina and Chile, there was no lack of innovation to see - from high-end intimate dining experiences at places like Aramburu, Don Julio (rated 19th in the World’s 50 Best Restaurants) and Fogón in Buenos Aires, to popular restaurants welcoming food tours as a promotional channel, to the almost universal use of WhatsApp as both a marketing and communications tool. Cutting out websites and aggregators and encouraging the public to book direct on their phone for restaurants, hotels and taxis - despite the loss of data and CRM benefits - was the rule.

All of which does make you worry a little for the UK market with so many independents going to the wall. Where will the next disruptors and innovators come from if they don’t have the financial resources to make it to the market? Answers on a postcard, please.