Contractors back trends towards risk

28 March 2002
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28 March 2002 | David Arminas

Catering companies have welcomed the trend towards more risk-orientated and performance-related contracts.

But they say they need more data from purchasers before making proper risk assessments.

The thirteenth annual contract catering survey from the British Hospitality Association (BHA) found that caterers invested around £130 million in their clients' premises in 2001.

This points to a willingness to take on more risk if the rewards are there, said Bob Cotton, chief executive of the BHA.

"Contractors were once risk-averse but are now increasingly risk-willing," he said.

Cost-plus contracts, where the caterer charges a management fee for the cost of providing the services, accounted for 54 per cent of contracts in 1994 and are now barely 30 per cent, he said.

"That is a major change in an industry that has been reluctant to take on risk of any kind."

Robyn Jones, chief executive of catering company Charlton House, said the trend was for more fixed-price contracts where profits are shared with the client.

"Although the cost-plus contract has not yet disappeared, in the next 10 years it will certainly be under greater pressure," she said.

"But the message to clients is to give us accurate information.

"We need data, such as how long will the restaurant be open, how many people will be there and what is their male-to-female ratio."

SMmar2002

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