How has COVID-19 effected the Hospitality Industry
19 August 2021
It has been a tough year, and every business has been affected by the pandemic in one way or another. It must be said, however, that the food and accommodation industry has taken an especially large hit. Restrictions on trading have massively impacted business turnover, and ongoing fixed costs alongside accumulating debt have been major issues for the sector.
As a customer-focused, fast-paced and trend-sticky industry, the restaurants and hotels have been quick to adapt to the changing needs among consumers. Some of these changes may linger after the pandemic declines. Restaurants and hotels have learnt their lesson and will most likely keep measures to ensure the prevention of future outbreaks, despite national requirements. The industry is emerging as an entirely different animal to what it was before.
So, what are some of the trends that are likely to stick?
Rise in takeaway and delivery services
The COVID-19 pandemic caused a huge demand for food delivery services. Prior to March 2020, millennials and gen Z would be the demographic to swipe their phones using various delivery service apps whilst older generations would be happy to dine-in or ring up their local takeaway for an occasional treat. However, due to the pandemic, everything has changed. Businesses have responded to this by offering takeaway services to keep their businesses afloat during times of covid-19 restrictions.
“If we compare January 2020 to October 2020 with the equivalent period in 2019, delivery has increased 14% in frequency of visits to 804 million. There has also been an increase in spend by 40% to £5.7bn. Indeed, delivery now accounts for 16% of the foodservice industry’s £41 billion spend, which has nearly doubled from its pre-Covid proportion of 9%. The big three delivery platforms, Just Eat, Deliveroo and UberEats have profited from the pandemic, seeing their January to October (2020) business expand by 20%. They have increased their share of the market’s spend nearly threefold and now account for more than 8% of the total foodservice industry.” Charlotte Collins, Jellybean
What’s more, in just over a year, hundreds of ‘ghost kitchens’ (also known as a delivery-only restaurant, virtual kitchen, shadow kitchen) have cropped up over the country, either through existing companies or by new, standalone ones. According to Euromonitor, ghost kitchens are expected to create a $1 trillion global market by 2030!
Rise in digital forms of ordering and payment processes.
Restaurants and bars have been quick to innovate, rapidly resorting to digital solutions that help them implement table service and app-based ordering.
Victoria Mazengarb, Digital Partnerships & Marketing Manager at Mitchells & Butlers, comments:
“From a technological point of view, there have been huge shifts. We (M&B) have launched apps that allow customers to order at the table. These were already in-the-making, however COVID-19 definitely accelerated the roll-out of these and there seems to have been an extremely positive take-up from guests. The use of QR codes is now so commonplace across all demographics and we have seen an increase in acceptance of digital technologies in general. The ability to order online and pay as you go gives the customer freedom to leave when they wish, instead of waiting to pay at the end of their meal. Another huge shift is the switch from cash to card payments. This is yet another form of digitisation that the pandemic has accelerated. From a business perspective, these changes enable good data capture and opportunities for marketing.
I don’t think these changes are going to disappear. What will be key for us going forward is getting the balance right between using technology to enhance the guest experience, whilst still maintaining a front-line team that provides fantastic customer experiences. We mustn’t replace the personal touch.”
The hospitality industry has adapted with fighting spirit, with online ordering systems, improved take-out and delivery options. Even local business owners are now redefining their products and services whilst prioritising health and safety for everyone involved. Now realising many of these changes are here to stay, businesses are preparing themselves for a post-COVID world. Covid has changed us all in one way or another. What will be our new normal?
Here at Orion, we offer many products and services to the hospitality sector. We have developed and created the COVID 19 Track and Record System which allows businesses to keep track of individuals entering their premises to avoid their sites becoming a COVID19 infection hot spot. Visit here for more information.
Alternatively, contact us to find out how we can help your hospitality business with its evolving fulfilment requirements!