We’ve heard empowering stories from business owners who admitted they were stretching themselves too thin but were afraid of making unpopular decisions."
It will take many years to assess and mourn the devastating and lasting effects COVID-19 is having on our collective mental, physical and economic health. But we can already begin to understand the ways the hospitality industry has adapted for the better and created new opportunities directly as a result of the crippling lockdowns that laid waste to so many businesses and livelihoods in the past year.
Locational freedom — The conventional wisdom about restaurants and retail has always been “location, location, location.” But the effects of the pandemic have made consumers realize how much more freedom they now have in their lives after businesses adopted new ordering, delivery and communication technologies sooner than they would have without a forceful catalyst. Restaurants marketed meal kits and conducted virtual cooking demonstrations. Suppliers began selling directly to customers online to keep goods flowing. People attended more events and museums online. And the world learned that remote working was actually a legitimate option.
There will be some reverting to old habits in the coming months, but the paradigm has shifted permanently and there will be no putting the genie back in the bottle. Consumers know they can have almost anything they want from anyone, delivered anywhere, with the push of a button. Businesses have learned they can reach a broader scope of customers and expand their business model with new offerings.
Radical creativity — Plato once wrote, “Our need will be the real creator” and never was that truer than when people found themselves stuck in their homes and businesses were prevented from welcoming customers through their doors. Crazy, radical workarounds ensued. High-end experiential restaurants sold takeout dinners. Other restaurants sold groceries and cleaning supplies, opened “ghost restaurant” brands and added outdoor seating capacity. Consumers learned how to adapt their homes to be a new hub for working, teaching, cooking, hosting multigenerational families, entertaining and providing self-care. Pizza chains learned they need to mobilize a lot more drivers to keep up with exploding demand.
Hard pruning — Of course, not every business survived this transition period of transformation. Tens of thousands of independent restaurants and chain units have closed permanently and more closures are certain to happen before we reach an equilibrium.
I attended a webinar early in the lockdown where a prominent research company suggested the “good thing” about the sudden restaurant closings was the industry was overbuilt by about 10%. With too much capacity for the available consumer demand, the restaurant industry would be stronger after the closures. The calculation felt a little too cold at the time, but it was absolutely correct: When there are too many locations vying for too few consumers, the entire industry suffers. Restaurants limp along, make unprofitable concessions and delay difficult decisions in the hope that things will get better soon.
We’ve heard empowering stories from business owners who admitted they were stretching themselves too thin but were afraid of making unpopular decisions. COVID gave them permission to focus and take action that strengthened their bottom lines and set them up for success on the other side.
Pre-pandemic, all this fiscal tension was hard to perceive and address, because the world was accelerating and raising demands, not slowing down or lowering them.
Tempered expectations — Today, our economy’s continued growth depends on both monied and cash-strapped consumers opting for new things and experiences. In the pre-pandemic world, VIP treatment, upgrades and world-class service were anyone’s to demand and optimize. But as COVID lockdowns left everyone wanting for toilet paper, indoor dining and family reunions, America’s “Have” consumers became more sensitized to the hospitality sector’s “Have Not” realities of many earning low wages, plus tips.
Now, tipping has become a means for showing generosity instead of fulfilling an obligation. Longer table waits are an understood consequence of labor shortages. And friendly service is accepted graciously instead of expected. We also are more tentative with travel plans, knowing a new disruption could wipe out another year’s worth of weddings, graduations and holidays at any moment.
How long these new mindsets — freedom, creativity, pruning and tempered expectations — will continue to spur the creation and adoption of new technologies, products and services remains to be seen. But already it’s clear that countless businesses have not just persevered but have set themselves up to thrive as hospitality recovers in the coming years.