8th December 2020Future of hospitality – navigating prolonged uncertainty

It’s been a difficult year for our clients and friends in the hospitality industry. Businesses across the sector have had to push the boundaries of creativity, finding new ways to drive trade and give consumers a level of confidence to continue dining out as much as they can.

With areas across the UK continuing to come in and out of lockdown, continuing to adapt has never been more important.

Russell Nathan, head of hospitality, shares his thoughts on what’s next for the industry and where businesses can go from here:

Consumer habits and lifestyles have changed as a result of the pandemic, what do you think this means for the future of the hospitality industry?

Data from Deliveroo has revealed that Friday and Saturday night orders are up 36% across Europe compared with pre-lockdown numbers. There has been a fundamental shift, but it’s closely connected to the restrictions and I’d expect these numbers to drop back as restrictions ease.

However, I do think changing work patterns will have much more of a lasting impact. While working from home may negatively affect restaurant foot traffic, especially in office-heavy areas, it can also create new opportunities. During April, May, and June, delivery firms reported a 50 percent increase in breakfast orders and an 80 percent increase in lunch orders. Office life may start to return, but I think flexibility and home working will continue and this will have a lasting impact.

Could a delivery only model prove successful for some businesses?

Data suggests a large influx of venture-capital investment into funding “dark” or delivery-only kitchens (a shared workspace-style solution to kitchens) is rapidly boosting their growth and offering a radically different operating model for restaurants to consider.

Are there lessons to be learnt from the global financial crisis of 2008?

There are always lessons to be learnt, and it’s good to be reflective. McKinsey research found that during the global financial crisis, restaurants that were leaders in customer experience delivered approximately three times greater cumulative return to shareholders. Spending will fluctuate over the coming months, and consumers will be much more cautious – the focus should be on quality experiences.

What do you think the restaurant of the future will look like?

I believe voice technology is the future of business –businesses will accelerate this adoption post-covid and voice-activated technologies will be essential to remain relevant and competitive.

I also think there is great potential for businesses to connect and build innovative partnerships. There is a huge opportunity for businesses to play to their strengths and work together – during covid we’ve started to see this, for example food brands and car rental companies for food delivery etc.

How big a challenge is Brexit for the industry?

In some respects, Brexit has been overlooked during the pandemic. The end of the UK’s transition period for leaving the European Union is less than a month away and it will likely exacerbate the industry’s already fragile financial situation. From managing supplier relationships to the mobility of employers, a lot of confusion remains! We’re doing our best to help clients navigate through the uncertainty and there is a lot of work to be done to understand new legislation.

If you would like to have an extended discussion about your own circumstances, get in touch – our partners are here to support you through these challenging times.

Key contacts

Russell Nathan
Senior Partner

020 7380 4971
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