The COVID-19 pandemic has thrown the hospitality industry into turmoil, and with Sydney still in lockdown and rapid closures still a part of life, businesses in space remain some of the hardest hit by the crisis.
But the virus is likely to have long-term effects for hospitality businesses, both good and bad.
Hotel recruiting and training startup Barcats recently raised $ 2.4 million for its platform that connects potential staff members to the places that need them.
Despite the challenges of COVID-19, the platform is growing, with some 95,000 workers and 24,500 locals now on its books.
This has always been a tough industry, founder and boss Jeff Williams tells SmartCompany.
Before the pandemic, between 55% and 60% of workers in the sector reported some anxiety around their job security, he says. But in the last 12 to 18 months or so, that has increased to 92%.
There is a lot of casual work around, and a lack of confidence in the industry in general, he explains. That’s something Barcats strives to address.
“This is a great industry when it’s up and running,” says Williams.
“We really want people to enjoy and be a part of it.”
The challenge in Australia is twofold, he says.
Lockdowns are still a part of life, and the situation in Sydney shows that we have not passed the era of prolonged closures.
But we have also seen a “mass exodus” of around 25% of workers from the industry. Skilled foreign workers like chefs, managers, baristas, and more returned home.
There are also 147,000 fewer backpackers around, Williams notes.
Therefore, even when venues are able to operate, the shortage of staff means that they cannot operate at capacity.
Talent within reach
It is this personnel problem that could be the most damaging to the industry in the long run, predicts Williams. But there are creative ways to tackle the problem.
The borders are not likely to be fully reopened for at least another 12 months, she notes, so the emphasis should be on the talent that is already here.
Barcats is working to create pathways to hospitality careers for people leaving school and college, and also to improve the skills of seniors to join this workforce.
The startup is also asking the federal government to step in here, both in terms of more crisis support, and to help bolster the workforce.
We have “a country full” of working vacations and temporary visa holders, she notes.
One thing the government could do instantly is offer you some clarity on your right to stay.
“Giving them a little more security around their long-term ability to stay in this country just means that they will have a different attitude.”
That could lead them to improve their skills, look for long-term jobs, and start spending more for themselves, too.
“Turning vacation visas into permanent residents I think is going to be really key, and it will really help the industry.”
Seven hospitality trends
While clear challenges remain in hospitality, a report from the ordering and payment platform me & u suggests that it is not all doom and gloom.
Working with its headquarters partners, me & u has crafted some positive trends that could ultimately help shape the industry for the better, after the pandemic.
From increased tech adoption to premium spirits, here are seven tech trends to watch out for:
Technological rebound
This report also notes that hotel companies are struggling to find staff. That means they are increasingly adopting technology to help teams operate as efficiently as possible.
In fact, since the beginning of the crisis, we have seen startups like Mr Yum, Ordermentum and HungryHungry raise funds for their technology solutions for the sector.
me & u has seen a 643% increase, year-over-year, in the number of places using its platform, which it says shows that business operators are embracing the technology, and so are customers.
The me & u report also states that customers who order through their own app spend an average of 27.5% more.
Big spenders
There is no doubt that lockdowns are difficult for everyone involved. But me & u found that after Victoria’s long lockdown ended in 2020, people were desperate to get out and willing to spend more when they did.
That meant hospitality spending for the whole of Australia jumped 28%, compared to pre-lockdown levels, despite capacity limits. We also became a nation of night owls, with orders placed between 10 pm and 11 pm tripling.
Boozy sundays
There has also been a change in the way people socialize. When restrictions were relaxed in NSW in June last year, Saturdays suddenly surpassed Fridays as the busiest trading days, and me & u also saw an increase in trading on Sundays.
“Boozy brunches, long Sunday lunches and weekend drinks after dark are where companies should focus their attention,” the report said.
Local support
People are also more inclined to stay close to home and support their local bars and restaurants. Suburban pubs, in particular, have seen an increase in business.
Strong things
The report also found that consumers are interested in a stronger tip, with spirits orders increasing 400% in March 2021, compared to March 2020, with vodka, rum and whiskey leading the way.
Cocktails are also seeing an increase in popularity, now making up nearly 20% of all drink orders at me & u.
The good The report also found that when it comes to spirits, consumers are more inclined to treat themselves, opting for more premium beverages. For example, around 70% of vodka orders through the platform request premium brands such as Gray Goose or Belvedere.
One place in Sydney reported that about a third of its customers who ordered gin were also opting for a premium brand.
Big hearts, deep pockets
And finally, customers feel more generous when it comes to tips, with a bar in Queensland reporting a 50% increase in tips.
