How the hospitality industry weathered the pandemic and what you can learn from it
In this article written exclusively for Business Leader, Prask Sutton, CEO & Founder of Onvi discusses the impact of the pandemic on the hospitality industry and what can be learnt from the industry’s weathering of the storm.
Startup environments are exhilarating and ever-changing, and you always need to be on the front foot, ready to quickly adapt to the unexpected. Back in 2016, long before we ever thought we’d one day be required to wear masks in public spaces and cautious of this invisible enemy called Covid-19, my co-founder Jon and I set up Onvi to help tackle the technology lag in the hospitality industry. Nothing could’ve prepared us for a global pandemic.
According to a survey conducted by ERC, over two-fifths of small and medium-sized UK businesses are struggling with a decrease in sales as a result of the pandemic. Hospitality was one of the hardest industries impacted by the effects of lockdowns and Covid restrictions, and we quickly saw businesses turn to technology as a sure-fire way to remain resilient and navigate uncertainties through this challenging period.
While we knew digitalisation is the industry’s future, we weren’t anticipating the rate of growth we experienced. Over the past year and a half, we have been in a position to help pubs, restaurants, cafes, hotels and food trucks operating on our platform stay open and trading successfully despite the difficult circumstances imposed by the pandemic.
As we were experiencing our growth, we also witnessed the transformation of many of our operators’ businesses. There are many lessons to be learnt from the way they responded to change to stay afloat during the pandemic.
Make things happen rather than let things happen
In the face of a threat to a business, management that quickly responds with a proactive strategy is the difference between failing and thriving. Examining the hospitality industry, we saw companies jump out of their normal operative process and create business models to capture new revenue streams during the crisis. The pandemic has impacted many aspects of our lives, such as changing our payment habits and transforming our shopping behaviours. Online ordering and delivery services boomed; DIY meal-kits were being sold by everyone from pasta aficionados to Michelin star restaurants, and when the UK first eased restrictions in July 2020, we saw a rise in QR codes and digital menu ordering,
Those who proactively embraced innovation kept operating through the lockdowns and were able to quickly restart other operations when restrictions eased. On the other hand, those who adopted the wait-and-see approach missed the boat, which impacted their ability to reopen effectively at the first opportunity. The UK ecomony is made up of a majority of small businesses, and not everyone has enough capital to wait out the crisis, making a proactive approach to innovation and technology more critical than ever.
Data is your best friend
While essential and a big driver for those in the hospitality industry and beyond, passion isn’t enough to sustain a successful business — developing one’s business acumen is equally important, which includes operating with the bigger picture in mind. This is where business data comes into play. Understanding factors that impact revenue generation and capitalising on the behavioural trends of customers is key to making good business decisions.
In the UK, hospitality businesses were operating on notoriously wafer-thin margins long before the pandemic. Rising labour costs, business rates, rents and food costs, along with staff shortages compounded by Brexit, were all existing issues further exacerbated by the pandemic. Taking the time to analyse critical business data to inform innovation is a necessity for those wanting to future-proof the part they play within the industry.
For example, with restrictions having been lifted in the UK, pubs and bars should now be re-focussing their efforts from the challenges of operating at reduced capacity to maximising throughput of sales at peak times. Digital menus have surfaced new opportunities to track orders, collect sales data and maximise revenue — whether managing orders at the table more easily, strategically offering discounts, better servicing customers sitting outdoors or even launching takeout services for the first time; these benefits go well beyond reacting to restrictions imposed by Covid.
On-demand economy driving changes to your customers
The pandemic has brought about significant changes to consumer behaviour and expectations. The lockdown has amplified people’s digital footprint — activities such as video conferencing, online shopping, ordering takeaways and delivery, as well as Netflix bingeing are all driving the ‘on-demand economy’. People want things pronto. Keep customers waiting and they’ll go elsewhere.
One of the changes triggered by the pandemic is the increase of online orders, which hospitality ignores at its peril. The shift towards digital ordering has permeated the hospitality industry. A recent study we conducted revealed 96% of consumers are satisfied with the ease and convenience of mobile Order & Pay. This relatively new payment mechanic — for many a habit born from the pandemic — is set to be a permanent fixture. Over half of those surveyed plan to continue using it as their primary payment channel in pubs and restaurants, post-pandemic.
Aim to thrive, not survive
This was the first global pandemic in recent memory, and it’s been a lesson learnt hard that complacency isn’t sustainable. Uncertainty remains high and we don’t yet know exactly what the ‘new normal’ will look like. What we do know is — no matter what sector you operate in — taking a proactive approach, making business decisions based on the bigger picture and understanding the new behaviours of customers are all necessary to ensure we don’t just survive the pandemic but thrive far beyond it.