Spotlight on: Hospitality – is the future digital?

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Written by Catherine Martin

Published September 2021

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The Covid-19 pandemic impacted almost all industries, but few had to adapt as quickly, or were hit as hard, as the hospitality industry, with a staggering £80.8bn wiped off sales in just 12 months. Businesses were forced to navigate a complex period of lockdowns and increased trading restrictions, on top of which, they had to find new ways to keep their businesses running and manage changes in consumer behaviour.

Yet, despite the upheaval, they showcased a level of adaptability, resilience, and innovation. They adapted to their changing working environment with speed and agility, pivoting from restaurant sales to offering deliveries and takeaways and, when they were allowed to reopen, moving to contact free ordering and payment options.

The revival of the QR code

Pre-pandemic, the hospitality industry had dipped its toe into using digital technology, but usage mostly focussed on utilising apps to engage with customers and encourage repeat sales through timely and targeted offers. Then the pandemic hit.

For an industry that placed huge importance on human interaction, this forced separation of staff and customers meant businesses had to find a new way to interact with their customers and many turned to technology help do this – namely the QR code.

Originally launched in the 90s, the QR code had gone the way of many 90s trends and seen a drop off in usage. But their ability to provide customers with access to menu information, the facility to order and offer a seamless payment experience, and more importantly, a touch-free customer experience, saw hospitality quickly moving to install QR code systems, turning to software developers and their payments providers to support them. The use of QR codes was also found to have additional benefits. As ordering and payment was driven by the customer, the speed of service and table turnaround increased, businesses found they were able to cover more seats with fewer staff, queues reduced, and the overall customer experience improved. In addition, when not having to order through a staff member, customer spend increased, with some establishments seeing a 15-30%* rise in individual spend.

The new ‘normal’

While we may be yet to find our ‘new normal’ as the possibility of ‘Plan B’ still remains, hospitality businesses, now confident in their ability to cater for varying scenarios, are planning for the future and looking to understand which of the trends seen in the last year reflects a permanent change in customer behaviour and which were a temporary response to the pandemic.

It’s clear that the pandemic accelerated the use and adoption of new, or re-emerging, technology across the whole customer base. Recent research by YouGov for Pay360 has shown that some groups have embraced these new digital services more easily than others.  

Perhaps unsurprisingly, electronic payment methods look to continue to be the go-to option for the under 35s, with the 18 to 24 age group particularly intent on the continued use of QR codes with 66%* expecting to use QR codes to pay in hospitality venues moving forward. Over 55’s are slower to embrace this new technology, with only 16%* expecting to use QR codes in the future and 12%* stating that, moving forward, they would still prefer to use cash over electronic means.

When opportunity knocks

The pandemic has seen the rapid adoption of electronic ordering and payments in the hospitality sector that’s taking service to a new level. And with the hospitality industry also facing recruitment and staffing issues, many businesses are looking to see where they can utilise this technology moving forward to not only help manage staffing levels, but to also improve the end-to-end customer experience. This brings with it a significant opportunity for software and payments companies who can provide these services. Where once doors were closed to new technology ideas, they are now actively being opened.

 

 

 

 

*Research conducted by YouGov for Pay360 – July 2021