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The Australian hospo industry in 2020 and beyond

Australian Hospitality

There’s no denying that hospitality changed a lot in 2020. 

Some trends have shown us new and exciting ways to change how we consume and order food (mobile ordering for outdoor venues for example) whereas other trends have been less exciting (having to isolate and reduce restaurant visits for example!).

In this article we’re looking at the hospitality industry in Australia in 2020, and how it might change in the future.

Australia’s hospitality industry was less affected vs the global market

2020 was an unprecedented year, however compared to the global fight against COVID-19, reports suggest that Australia has dealt with COVID-19 very well. This has led to a less affected hospitality industry.

In fact, a December 2020 Mckinsey report highlights that Australia has experienced lower infection and death rates than many comparable OECD countries.

Despite best efforts, employment in the food and beverage industry has declined

Despite the commendable effort to control the virus, it is no surprise that the food and beverage services industry experienced a notable decline in employment between 2019 and 2020 (from 819,800 to 579,100). This comes after two decades of strong growth which began in 2000.

That said, it’s suggested that most hospo occupations will grow in the years following 2020, with chefs and cafe workers showing the highest predicted incline.

Hotel and tourism venues took a hit

Again, no real surprise here. Reports from 2020 have shown that revenue in the Hotels and Resorts industry decreased by 25% in 2020 and are predicted to decrease by 36.5% in 2020-21.

As we all know, Australia’s response to COVID-19 has been characterised by border closure, which has led to a corresponding drop in travel and tourism.

A movement to loving local

One positive change to come out of 2020 was that people in Australia took a real interest in loving and supporting local businesses. News reports suggest that more than two thirds (70 percent) were consciously supporting local in 2020.

In 2020, consumers wanted to support local businesses, as well as know where food is coming from for both health and environmental reasons.

As Chef Arte Assavakavinvong of iconic Melbourne restaurant Longrain said: 

"People want to know where their food is coming from and want to ensure what they are eating is not only ensuring their health and well-being but also taking care of the environment for the years to come.”  

Conscious drinking

Another surprising shift in the food and beverage industry in 2020, was that alcohol consumption decreased during COVID. This may continue into 2021.

The results from several self-reported surveys suggested that a higher proportion of respondents reported that their alcohol consumption decreased since the spread of COVID-19 in Australia (27%).

This follows on from recent Nielsen reports that millennials are cutting back on their drinking. Just over half (53%) of Millennials said they consumed alcohol in the past month, compared with 65% of Gen Xers (aged 35 to 54) and 72% of Boomers (aged 55+).

Technology integration became essential

In order to keep the industry going during COVID lockdowns and isolation periods, technology became essential. This shift is set to continue into 2021 as businesses have found mobile ordering and technology a useful tool.

According to a Deloitte report, “technology vendors in the hospitality industry are delivering higher levels of software sophistication”. These mobile platforms are allowing businesses to trade in unprecedented circumstances whilst maintaining social distancing rules.

The report notes that in NSW alone, revenue earned in the collaborative economy grew 68% in one year. As they notice, “online food ordering and delivery platforms are providing new ways for businesses to connect with consumers”.

A change in the food ecosystem with more variety

2020 was the year of the hustle, and this meant that businesses in Australia had to change their tactics and offer more in order to survive. We saw grocers offering prepared meals, restaurants offering takeout and delivery, and bars delivering cocktails to your door.

Changing consumer needs have blurred the traditional boundaries between players and this is set to continue into 2021.

People spending more on eating out

A general trend that has been on the incline for years is that people in Australia are spending more on out of home eating and takeout food. This has continued in 2020 as people have adopted a ‘treat yourself’ attitude.

In Australia, money spent on meals prepared outside the home has grown from 25% in the 1980s to more than one-third of household food expenditure today.

Convenience was king

With lockdowns meaning people couldn’t leave the house, and the threat of the virus making people worried to venture into a supermarket, convenience foods have been big in 2020.

According to a Deloitte study the delivery of restaurant meals to the home has risen dramatically in recent years with one-third of consumers now using a restaurant or meal delivery service, and 7% of consumers get delivery once a week.

Mobile ordering services improved customer experience

One of the most important changes in 2020 was that mobile ordering services evolved to support businesses. They improved the customer experience and ensured that customers were able to feel safe when they dined out or were ordering delivery.

This trend is set to continue into the future, with mobile ordering having been a hit globally. At the start of the pandemic we saw a lot of businesses using app-heavy technology where a user would have to download an app to download, log in and then order food.

This wasn’t popular, so mobile ordering evolved to provide easy to use app-less mobile ordering technology. This is set to continue into the future, as health and safety will be at the forefront of everyone’s minds.

January 22, 2021

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