Hospitality basics
Once you’ve committed to becoming a freelance Creative contractor A career in hospitality offers one of the widest and varied career paths of any career routes that you could take. This is mainly due to the range of job types and services that it includes and also the varied levels of training and backgrounds of those that work within it. Hotels, coffee shops, restaurants, fast food chains, the airline industry, theme parks, cinemas, pubs, pop up food stalls, cruise ships and event planning and execution could all be said to belong to the category of jobs within the Hospitality industry.
The range of skills is clearly so varied from the highly creative but pressurised environment of a fine dining or possibly Michelin starred restaurant to an early morning barista for one of the many coffee chains expanding to meet our seemingly non-stop caffeine needs, cashiers who need to be cheerful and precise when it comes to dealing with cash in particular, through to the significant number of admin positions that such sub-sector requires. It’s an industry that does not need a high level of school or college achievement before entering it, in fact quite a lot of industry leaders in this field did not have great school grades.
However, it is an industry that requires a lot of commitment, commitment to providing standards of excellence that customers require when deciding where to spend their disposable income, commitment to the long and often unsociable working hours that these roles invariably involve and commitment to the ongoing training and development that is required to progress through to the different type of roles that the industry offers.
Industry Analysis
The scope to develop a long term and stimulating career in Hospitality can best be represented by the size of the industry. Consider the following facts provided by Industry representative bodies and external consultants regarding Hospitality fact and figures in 2015/6.
The Global Hotel Industry is forecast to generate in $550 Bil. in 2016 up from $457 Bil. in 2011.
The most expensive average room rates in the world are in the Middle East and surprisingly Africa (maybe due to the lack of supply of quality rooms) at $165.97 daily room rate on average.
The 41 largest Hospitality companies in the UK generate $30 Bil of sales per annum and employ approximately 850,000 people.
The specific ‘Food Service Management’ sector in the UK serves 4m customers per day and generates annual sales of $84 Bil. The total number of people employed by the sector is expected to increase by 10,000 in 2016 from 268,000. Street Food, low sugar products and healthy option food solutions are seen as key trends driving demand and growth in the sector.
Tax Advice
There are various very different requirements depending on whether you are an employee, freelancer or an employer in the Industry. The employee/employer arrangements are covered in the final section – the following notes are specifically relevant to those that can and do charge their services are freelancers.
A few simple suggestions that will ensure that you keep what you can with reference to your Hospitality earnings and that you consider if it’s the best long term arrangement for you…
Register a company as soon as you believe that you will be able to be paid on a fee/daily rate basis. You will be taxed on this income but you do need to start recording and paying for any expenses that are relevant to your job through that same company so that you reduce the amount that you will ultimately have to pay tax on.
Keep all of your receipts and records regarding your income and expenses in a safe place be it in paper or electronic format. Once you have started the Revenue Authorities can at any point ask to see these records and they must tie in with the any Tax Returns that you have made.
Remember that you have to provide for your own long term savings and pension requirements if you are a freelancer, these are not the responsibility of the party that you work for. You can register and pay contributions into the Government scheme via the PRSI system even as a freelancer to increase your long term state pension if you have decided to retire in the UK.
Financial Performance
Specific financial performance targets with regard to your working environment will be set by your local manager and most businesses have their own way of defining and naming specific day to day/monthly operations goals.
Common industry terms relating to Financial Performance include occupation rates in the Hotel Sector, wastage rates and the number of covers in the Restaurant industry, spend per customer in the fast food business and bums on seats for events that require seats to be sold. We will cover these and more in our more detailed section.
Understanding the importance of managing and designing the correct Key Performance Indicators (KPI’s) is vital to the success of any business and by helping you understand how these are calculated and what they are trying to measure you will further understand how your role fits into the overall Management requirements of your workplace.
Management Consultancy
A lot of people when they get to a certain stage of their career decide to take the plunge and become a resource that is hired for projects rather than a day to day employee. The variables regarding this decision are often driven by the financial incentives of lower taxation or a requirement for a change in lifestyle.
There is a lot more to it than that and even if you are to match your employer salary level, in the long run, quite a lot of relationship building and upskilling in terms of skills and responsibility needs to take place. Of course, this is not relevant if you are taking this course of action as a stepping stone to semi or full retirement but often the importance of matters such as having appropriate contracts, prominent networking and an understanding of what is required in terms of B2B Marketing are forgotten about in the rush to grab the short term Financial advantages of Contracting or spending more time at home with your coffee percolator rather than by the water cooler at work.
Employment Tax
If the move to becoming a freelancer has been part of a well-planned transition from employment or if you have defined your niche clearly, built up expertise and relationships that you can transition to your new business then you maybe in a position to hire staff of your own.
The mechanisms and how you meet your Government requirements to pay over tax, PAYE and PRSI, deducted from Employees at source will be covered in our detailed guide.