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Is technology coming to the hospitality sector’s rescue?

Posted on 4 March 2022

A shifting industry

Prior to the pandemic, we had already seen some significant shifts. With online retail expanding, high street footfall declining, and an already oversupplied market, the casual dining sector was in serious decline. The pandemic accelerated this – in the period between 2019 and 2021, London recorded its lowest restaurants' growth in 30 years with an average annual closure of 125 restaurants (against 117 closures in 2018 and 113 in 2003). The controversial CVA (among other government backed measures), has prevented these numbers from being significantly worse. 

Premium restaurants have fared better in terms of closures, but they still carry significant debt and rent arrears which will need attending to.

Opportunity

Overseas operators see the current market as a once in a generation opportunity to get a foothold in the lucrative London market, and there has been significant interest. However, while the high streets have suffered, premium sites remain rare and as expensive as ever. Some foresee a £65 billion investment surge in commercial real estate in 2022, the highest in the past five years.

A declining workforce

Staff shortages is something that was never foreseen as a consequence of the pandemic, but it seems many have left the industry for a variety of reasons. 

Significantly, the effects of Brexit are starting to take its toll. EU staff made up 15% of the UK hospitality work force at the end of 2018, pre Brexit (40% in London jumping to 75% of EU workers pre-pandemic). Many of these workers returned home during the pandemic, and will not be coming back. Last summer, over 93,000 EU workers were reported to have left the hospitality industry leading to a considerable growth of vacancies in the sector. We are told the English don’t like to serve, which is an issue where the service sector makes up (80% (out of which 3-5% is contributed by the hospitality sector only) of our economy.

The role of technology

Will technology come to the rescue of the hospitality sector, and if so, how?

Again, this is a space where the pandemic has seen the rise of the pay platform, which was happening regardless - but also remote payments and hygiene issues around cash made this an obvious opportunity for these platforms. 

But perhaps more can be done still. In 2020, a study found that 44% of customers' biggest complaint was the wait to pay their bill. An app can allow you to book your table in the same way you choose a seat in a cinema. On arrival at the restaurant you can check into your table by simply tapping your credit card on a tablet at the table. That same tablet will take your order and payment when finished. It may not be for the premium end of the market, but for pubs and the casual dining sector this might just be the future, for reducing already short supplied staff and increasing table turnaround. 

Similarly, an increased number of restaurants use 'pay-at-the-table' technology allowing guests to order and pay for their orders by a quick and simple scan of a QR code. Contactless technology is becoming a significant part of our dining experience, and the need for investment in automation and digitalisation is undeniable, especially given the ready availability of these technologies.

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