Business Trends

How Hospitality Businesses Are Adapting to Survive and What We Can Learn From Them

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The sudden downturn in the hospitality industry caused by the global spread of coronavirus has resulted in fear for the future of a sector that relies on face-to-face interaction and in-person experiences. However, these unprecedented circumstances have also given rise to some inspiring and inventive initiatives to keep businesses afloat and communities healthy and connected throughout the pandemic.  

Here, we explore some examples of businesses that have made difficult decisions and adjusted their business models in order to survive.  

Vouchers: A Source of Income While Doors Remain Closed 

Many hospitality businesses have turned to vouchers and other pre-payment initiatives in the hope that this will inject enough cash to keep them afloat while the lockdown remains in place.  

#StillLocalStillOpen, an initiative launched by Paramount House Hotel in Surrey Hills, Sydney, has been designed to support neighborhood businesses while they remain closed. The hotel brought together a collective of local independent businesses to offer two passes at two different prices. Each pass incorporates something from the ten local businesses involved which can be claimed once everything re-opens. This collaborative approach recognizes the importance of a thriving and varied local economy for all businesses to succeed. Rather than competing for customer loyalty, this strategy enables local people to support and protect the unique character of the neighborhood they know and love.  

Travel app startup Porter & Sail usually thrives on income generated by hotel guest occupancy. Inspiring would-be-travelers to #TravelTomorrow, they’ve responded to plummeting guest numbers by starting another hopeful voucher scheme. Hotel credits enable guests to purchase future trips to stay with independent boutique hotels around the world, without having to specify the details. This allows customers to book in full confidence that they’ll be able to enjoy their future trip; it’s a question of when, not if.  

In the UK, BE A LOCAL HERO supports local businesses of all types, from bars and cafes to gyms and locksmiths. Their aim is to preserve community businesses by facilitating a voucher process on their behalf – businesses apply to use the services, local people purchase vouchers through BE A LOCAL HERO and the customer can redeem the voucher when businesses are open once again. The initiative, which has only just been launched, recognizes that many local businesses won’t be able to set up a similar service themselves. BE A LOCAL HERO bridges the gap between local people wanting to support their locals and local businesses in need of clients.  

In a similar vein, “Open and Trading” in the UK and “Help Your Hood” in the U.S.A. are new directories that have been established to enable local people to find out which businesses are still operating, details about the services they’re offering and how they can help to keep them afloat while doors remain closed.  

And Pivot: From Restaurant to Grocery Store 

In Mexico City, acclaimed restaurant Pujol has become a middleman, connecting its suppliers to local households. It has continued to receive regular produce deliveries, making supplies available for locals to order via WhatsApp. The initiative is not currently profit-making but is an effort to support the community, including people living in the restaurant’s vicinity and those who grow and supply the high-quality produce that usually goes into its dishes. Founder Pujol Enrique Olvera’s approach is a generous one, prioritizing the survival of his network of producers. It will also, undoubtably, earn the restaurant some well-deserved new customers due to the attention they’ve received. Hopefully, this will enable Pujol to bounce back after lockdown measures have been lifted.  

In a similar move, London’s Seven Dials Market and KERB have collaborated to turn the usually busy food market into a (delivery only, of course) corner shop. They’re taking fruit, vegetables and other essentials to local residents by bicycle twice a week and are working with London-based small-batch producers to keep as many independent businesses going as possible. This is just one of the few initiatives launched by KERB, a street food incubator and market that usually pops up all over the city.  

Community is again the driving force here with new initiatives popping up all over the world that aim to support entire local ecosystems. The complex hospitality network needs to survive as a whole; no one piece can make it without the others, so it is business savvy, as well as neighborly, to work as a team.  

E-Commerce: Connecting Customers to Familiar Flavors They Love 

In London, Singaporean restaurant Mei Mei opened in December 2019. The small restaurant in busy Borough Market received rave reviews early this year and business was gathering momentum when, overnight, everything changed. Restaurateur Elizabeth Haigh considered and then discounted running a delivery business; the commute to work wasn’t safe and she was concerned that demand for delivery would not provide enough income to pay her staff. Instead, she has rapidly pushed forward a nascent plan for the e-commerce arm of her business, offering ingredients for sale on her website and sharing recipes from Mei Mei’s menu to enable customers to recreate the dishes from home. The initiative appears to have got off to a flying start as the four items for sale are already out of stock. This quick and clever business pivot directed energy towards developing an always-planned arm of the business which will continue to grow long after we emerge from lockdown.  

Small independent restaurant Smoke & Bones usually operates at the aforementioned KERB street food market. Since the market closed, founder Meriam has had to find another way to keep her business afloat. Selling the smoked meat she uses in her dishes direct to consumers has provided a small income stream which will hopefully enable Smoke & Bones to survive. This had never been part of her business plan. However, Meriam is considering continuing sales post-lockdown as she doesn’t want to disappoint the new customers she’s gained all over the UK, who would otherwise not be able to engage with the London-based business. Customers can find recipes to recreate the flavors of the restaurant at home via the Smoke & Bones Instagram page.  

Lots of restaurants have started sharing recipes during lockdown, recognizing the importance of maintaining connection with their customers. Sharing secrets from the kitchen and selling unique ingredients direct to customers further increases the chance of keeping the loyalty of regulars, while bringing in some much-needed cash.  

Hotel Quarantine 

Several hotels have responded to the measures brought about by coronavirus by offering stays to guests who need somewhere to self-isolate, or who would like access to medical care without entering risker hospital environments. 

Le Bijou, a luxury Swiss hotel business, is marketing their apartments as the perfect place to stay during lockdown. Self-styled re-inventors of the hotel business, the company was at an advantage when it came to altering their services to comply with Swiss guidelines and changing customer needs. Their apartments are already tended to by a digital concierge and, although some services such as daily housekeeping and beauty treatments have been suspended, theyve quickly launched contactless check-in and a suite of new optional extras including coronavirus testing and the care of private medical staff. 

A similar, more affordable, initiative from Novotel Sydney Brighton Beach invites guests to spend their fourteen days of quarantine at the hotel. They’re offering a complementary upgrade to a balcony room overlooking the bay, all-inclusive room service covering breakfast, lunch, dinner and morning and afternoon tea, and a 40% discount for long stays of 14 days or more.  

These two examples consider the benefits of a hotel stay in the light of the impact of coronavirus and have aimed to fill gaps in the market. At Le Bijou, clients able to afford their high-end private care can ride out their quarantine in the utmost luxury, while people in Sydney who need to isolate away from friends and family now have somewhere safe and comfortable to go.  

Thriving in an Uncertain World 

Without a doubt it’s a tough time to be operating a hospitality business, but there are plenty of interesting adaptations now in play that demonstrate that humans are capable endless creativity and innovation. To borrow the words of famed elBulli chef Ferran Adrià: “to speak of creativity today is to speak of business”.  Looking ahead to a challenging future for the industry requires bold confidence, infectious optimism and strong business sense.  

To take advantage of the opportunities the changing business landscape presents, you’ll need to develop a sound knowledge of the fundamentals of business and a practical understanding of how to apply this in the real-world. At EU Business School, our faculty of business professionals and entrepreneurs teach theory alongside trends and insights from the cutting edge of business, sharing their experiences and case studies to enable our graduates to hit the ground running.  

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