By Peter Dougherty
This time last year, the future of the Canadian hospitality business — and hospitality in general — seemed unsure.
Fortunately, things have changed. The hospitality industry is re-emerging to serve Canadians who are excited to be back at their favourite restaurants, coffee shops, and bars.
But we’re not out of the woods yet. In an uncertain time, it’s always a good idea to look at the data. The good news is on the other side of the world, Australia can teach us a thing or two about how the hospitality industry might fare in the coming months.
Technology helped restaurants cope
In Australia, restaurants are seeing reservations and prepayments become the norm. A renewed sense of respect for the hospitality industry after 2020 highlighted just how much the people of Australia took these experiences for granted. Set menus and sittings have become increasingly popular, allowing venues to manage service and waste more efficiently.
We’re also seeing hospitality venues implementing processes, systems, and technologies that allow them to adapt to snap lockdowns and restrictions, but also meet and exceed the expectations of the post-pandemic customer.
Notably, adoption of QR code technology that allows patrons to order-at-table has grown significantly: by May 2021, there were more than eight times the number of venues using this technology as there were in May 2020.
What initially stemmed from COVID-19 compliance has now become an integral part of the new consumer experience, and hospitality operators are reaping the benefits. Orders placed through digital channels showed an average increase of 22 per cent in transaction value when compared to traditional orders paid by card, since QR code mobile ordering allows patrons to snag an extra round or appetizer without waiting for their server to ring it in.
QR code adoption grew in the U.S. as well: an industry report conducted by the National Restaurant Association noted that half of the full-service operators have added digital menus accessed by scanning a QR code.
For most consumers, scanning QR codes to check-in, order, and pay has quickly become second nature. While COVID-19 has been the biggest challenge the industry has faced in decades, it’s also brought about a significant acceleration in the adoption of technologies that will allow hospitality operators to run more efficiently, future-proof their businesses, and shift their focus back to what motivates the majority: building connections with their customers and creating beautiful experiences.
Major cities no longer the epicentre
Generally, in Australia, major cities were more significantly impacted than regional areas due to localized lockdowns, and central business districts were hit harder than surrounding suburbs as people adapted to working remotely and spending their discretionary income closer to home.
Recent data from Roy Morgan shows that Melbourne’s business district foot traffic has plunged to 20 per cent of pre-pandemic levels, while Sydney’s is sitting on 38 per cent and Brisbane has about half of what it used to be.
In Canada and the U.S., we are already starting to see trends of prominent restaurant groups and restaurateurs and chefs looking to the suburbs and beyond for new culinary operations. According to the Wall Street Journal, up to 25 per cent of the 160-million-strong U.S. labour force “is expected to stay fully remote in the long term,” changing the foot traffic of major cities.
Bars are bouncing back
In Australia, bars found it harder to adapt to takeaway and delivery channels and had a ‘lower low’ to rebound from. Therefore, their year-on-year growth has been more significant.
Now, it’s fantastic to see the whole industry enjoying a revival, with venues riding the wave of post-lockdown excitement, as Australians rediscover their communities and reconnect with friends and family over a drink. In May, Sydney bars enjoyed four times more business than the same month last year, and Melbourne bars had 10 times more business.
The loosening of state governments’ legislation around the service of takeaway alcohol and outdoor dining limits have been catalysts for this revival, and we hope these changes are permanent and reflected elsewhere.
Revenue growth exceeding pre-pandemic
April 2020 was the worst month for the Australian hospitality industry, much like the rest of the world, as venues lost close to half of their monthly revenue (-47 per cent) almost overnight due to lockdowns.
While Canadian provinces and American states have since experienced sustained or snap lockdowns, some more than others, May 2021 saw average revenues across bars, cafes, and restaurants exceed pre-pandemic levels, highlighting the extent of the industry’s recovery.
Michelle Widjaja, owner of Japanese restaurant ILKO Mazesoba in Haymarket, was hit hard early in the pandemic by lack of foot traffic and the disappearance of students and tourists. But as of June 2021, business is better than before the pandemic, with takeaway and delivery still popular. Widjaja told the Sidney Morning Herald that the pandemic had accelerated the adoption of technology such as QR codes, table-ordering systems, and loyalty programs. “We have found that the majority of people choose to work from home on Mondays and Fridays so we found that the middle of the week is now our busiest weekdays,” she said.
Trevor Simmons, co-owns CBD cafes in Brisbane and Melbourne. Industry Beans’ revenue was up 60 per cent from last May when the first lockdowns hit. He told the Sydney Morning Herald that his revenue is now up 85-90 per cent from pre-COVID-19 numbers, and they are planning for that to increase in the coming months.
In Australia, our hospitality merchants are seeing an increase in transactions despite challenges in the hospitality sector. We expect positive trends to continue in Europe, and in North America as well.
Peter Dougherty is the Global GM of Hospitality for Lightspeed. He has worked with the company in a variety of roles since 2011 and was previously VP of Partnerships and Head of Sales for Hospitality.