Hospitality Industry Insights report 2020/21
As a digital agency, we have worked across many industries with a range of clients, which allows us to develop expert insights and skills. Throughout the COVID-19 pandemic, we have produced a series of insights reports, focusing on industries we have worked closely with, which offer expert digital marketing advice and insight with the aim to help businesses during the pandemic and thrive after. In this blog, we will discuss our findings from After Digital’s latest release—our 2020/21 Hospitality Industry Insights Report.
We have worked with several businesses within this industry; from restaurant groups like The DRG to delivery services like Deliveroo and Diet Chef. In our report (which is now available to download for free), we summarize the market, key trends, economic and financial factors, and COVID-19 operational challenges. On top of this, to set your business up for success, we have detailed our recommendations across three core digital channels; SEO, PPC, and social media. The insights within the report will help hospitality brands prepare for welcoming guests once again and continue 2021 in a powerful position once the industry reopens.
Market Insights
COVID restrictions have left the hospitality sector in a state of flux after the 20th March when the UK Government ordered all of the hospitality industry to close their doors. Since then, there has been a stop-start process in place where bars and restaurants have only been able to open for a short space of time before having to close again.
This has been costly and frustrating for hospitality businesses across the UK, the effects on footfall can be seen in the table below.
The percentage change in hospitality footfall due to to the coronavirus (COVID-19) pandemic in the United Kingdom (UK) from February 20 to March 20, 2020* (Statista)
With everything that’s happened during 2020, McKinsey research suggests that recovery to pre-COVID-19 levels could take until 2023—or later. Also, in the wake of the pandemic, people have become increasingly concerned about their health, causing them to pay close attention to how their lifestyles, including their choices of food and drinks, may be affecting their well-being.
With all of this in mind, the key trends for hospitality organisations have began to pop up:
Increasing health concerns as more people are conscious of their lifestyle choices. There are studies suggesting a high BMI could lead to higher chances of reacting badly to COVID; this impacts people’s thoughts on food and drinks consumed. And, on top of this, the government continues to encourage measures for food-based businesses to encourage people to lose weight and improve their overall health. While good for the general population, this raft of measures is likely to add an extra layer of pressure for businesses that are already struggling due to the crisis; making returning to normal even more challenging..
Restricted spending is becoming a concern as many people’s circumstances have changed during the pandemic—therefore their priorities are different. Meaning consumers’ eating out habits and how these are perceived could change in the future, causing people to consider eating out as a ‘treat’ rather than the norm.
There has been a decline in the workforce that may lead to reduced footfall in the hospitality industry. The rise of unemployment is likely to negatively affect the foodservice industry, especially venues located in major cities that rely heavily on visits from consumers working in nearby offices.
How COVID19 impacted business operations
As this past year has been different and every industry has been impacted in some form, there is no doubt that hospitality has been one of the most affected with constant changes to restrictions, making it harder for business owners to operate. We are yet to understand the long term effects that COVID has had on economies around the world but this will be more apparent when the immediate threat of the pandemic has passed.
In the process of creating this report, we were also keen to liaise directly with professionals within the industry to uncover the challenges that they are facing, how they are overcoming them, and how reports like this could best serve the industry going forward. We spoke with Glasgow-based ‘Cail Bruich’ (a recent winner of a Michelin star, the first restaurant in Glasgow to do so in 18 years) and restaurant groups like ‘The DRG’ and ‘Buzzworks’.
Having these key personnel in discussions regarding the impact of COVID was a real insight into how the industry is managing to cope and adapt to the challenges they face. Another aim of these discussions was to get a scope across different businesses within the industry; from smaller, single location restaurants like Cail Bruich, who offer fine-dining experiences, to larger groups like The DRG and Buzzworks, who have to cater to a wider demographic.
In our discussions with them, commonalities in their challenges during COVID19 emerged. This included uncertainty when it came to industry survival and the ability to plan ahead, constant changes for staffing requirements and government guidelines, and the need to adapt to a more digital focus to reach and communicate with customers. We discuss these issues in-depth within our Insights Report.
For example, Chris Charalambous, co-owner of Cail Bruich said:
“There has been huge uncertainty as a result of the stop-start nature of the restrictions placed upon hospitality by the UK Government. As soon as you open you need to close again and there is a big cost to this.
Hospitality is taking a huge beating. Cail Bruich had 6 weeks off then moved to ‘at home’ services which required new processes, tech, and mindset. This was a big learning curve for the business and it felt like being a start-up again. Although this was refreshing and rewarding, as Chris and Paul had to do a lot themselves with staff on furlough, this has certainly forced us to adapt and rise to the current challenges.”
Recommendations for the core digital channels
As a digital agency we find using a combination of SEO, PPC and social media drives the best results for our clients. With this we want to provide an overview of our best recommendations for those channels based on key learnings from our work within the hospitality industry;. We believe it will provide valuable insights and help your business plan ahead for reopening, with an aim to have informed marketing campaigns in place when that time comes.
SEO
Research shows only 5% of traffic follows through to the second page of search results. Therefore, when choosing to invest in SEO, aim to achieve position #1, 2 or 3 in organic search engine results pages (SERPs). To get the highest ROI from your website with a good ranking on organic keywords, SEO is an extremely valuable tool in your marketing toolbox. Even though SEO takes time to get results the end result is worth the time.
For the hospitality industry, we recommend:
Ensuring your website is optimised in terms of keywords which match the users’ search intent.
If you are not already writing blog content, we would strongly recommend reviewing your content strategy to include answering the questions from real searches.
PPC
Pay per click advertising can be a powerful tool to target your customer base based on location or activity on your website. PPC ads can allow for your business's locations to be added to improve the chances of local bookings and getting a higher footfall. According to WordStream, the average CTR (click-through rate) for PPC ads in Google is 2% across industries.
For the hospitality industry, we recommend:
Investing in PPC to ensure your page makes the top four.
Utilise geotargeting, allowing you to target the right consumers and position yourself above that of your competitors.
PPC is an effective marketing tool when you have multiple locations but if you have a single location and limited budget, social media can be much more cost-effective.
Social media
On top of the struggles of the past year, 50% of consumers have admitted to feeling ‘uncomfortable’ at the thought of returning to cafes, restaurants, and bars because of COVID-19. However, with people spending an ever-increasing amount of time on social media (just under 2 and half hours daily) it is an enormous opportunity for hospitality businesses. You can use social media at a fraction of the cost of traditional marketing to increase your brand awareness and make customers feel safe when your business can reopen; showing them the measures in place to ensure their safety within your establishment.
Social media is an incredibly useful platform for the hospitality industry and has helped businesses adapt quickly to ensure survival, whether it’s running polls to find out what their customers would like to see from the company or simply engaging in conversations with their audience. Social media acts as a benefit for consumers too as they can see pictures of hotel rooms and popular dishes that may be updated more regularly than on their website.
In our 2021 Hospitality Report, we have 3 recommendations for social media.
Rely on reviews
92% of consumers say they trust earned media when it comes to hospitality booking and 72% of customers have used comments and images on social media sites like Facebook to make purchasing decisions.
Reviews and word of mouth are still incredible forms of marketing and social media has only accelerated that – look to your reviews and tagged posts to find a wealth of positive experiences that you can harness.
Focus on your visuals
Across the majority of platforms, high-quality image content does well for the hospitality industry – particularly restaurants and hotels/resorts; with the latter achieving twice the engagement when compared to any other type of post on Facebook.
Cultivate an ‘experience’
Millennials are now the largest consumer demographic and, more and more, we’re seeing businesses adapting to meet the needs of them and the generations that follow them. One key element of that being that they value experiences over material goods – meaning, what you offer has to be ‘picture-worthy’ to compete.
If you have something to take advantage of, like a unique landmark or a special dish, then do it. If you don’t, it may be time to think about how you can make your space or your business more attractive to the generations who want to post about their experiences.
95% of viewers retain messages when displayed as video content, as opposed to other formats – this makes video promotions a great brand awareness piece. On top of that, they also open up a wealth of retargeting ability.
Consider how to compete post-pandemic
Taking our suggestions and industry trends, and incorporating them into your social media content will be key, but so will small considerations like ensuring your posting at optimal times for your audience.
Investing in a paid social media strategy should also be something you consider to compete. Ongoing awareness and employing a marketing funnel are essential to keep your business in the mind of consumers – doing a one-off ad won’t cut it.
How can After Digital help?
Our team of experts take key learnings from our work within the hospitality industry to provide valuable insights and create efficient digital marketing training programs to assist our clients in driving ROI.
With years of experience across a wide variety of industries, we’re well-versed in working with organisations to support their online marketing and deliver tangible results.If you would like to discuss how AD can help you reach your business goals, please get in touch!
Alternatively, if you would like to read more of our insights reports, you can find our premium drinks industry report blog here, our arts and culture report blog here and our luxury watch report blog here.