Hospitality Industry Insights for 2024

When looking back on 2023, there is no doubt that the hospitality industry was hit with challenges, including navigating through financial ebbs triggered by inflation, in combination with labour shortages across the sector.

As we bid farewell to 2023, this blog post will guide your business through the anticipated trends set to shape the next 12 months.

Value for money

We all love a bargain; however, the UKs cost of living crisis has meant that consumers are becoming more cautious about what they spend their money on. Inflation rates reached their peak in October 2022 at 11.1% (commonslibrary.parliament.uk) but have since declined to 4.2% as of November 2023 (ons.gov.uk).

Although inflation has decreased in the past year, studies show that consumers are still wary about unnecessary spending, for example, a survey by Bidfood shows that ‘77% of consumers and operators alike see value for money as imperative to decision-making when choosing where to eat and drink out’ (morningsdvertiser.co.uk).

With the majority of consumers favouring value for money, 42% of those surveyed said they ‘would pay more attention to venues offering deals in the future.’ This data suggests that operators should be looking to consider offering deals and discounts on menu items so that consumers are more inclined to spend money on businesses that are good value for money (morningsdvertiser.co.uk).

Health

Another trend set to rise to in popularity during 2024 is a widespread preference for healthier food and beverages. Continuing in their survey, Bidfood states that 57% of consumers ‘expressed a preference toward food and drink brands that encouraged healthy lifestyle choices compared with those that did not.’ (morningsdvertiser.co.uk)

For operators, this information suggests that they should be making conscious changes to their menus so that they also offer healthier options for customers. A survery carried out by TLT shows that some are already making these changes, with 35.9% ‘aiming to expand their business by installing ‘wellbeing’ practices and 27.8% are planning on introducing ‘plant-based’ menu additions to attract customers’. (catererlicense.com)

Opting in for a few vegan or plant-based menu items can be a lucrative addition to businesses due to the volume of people in the UK who are actively looking to purchase vegan and plant-based food and beverages. An article by Restaurant states that there are ‘currently around 22 million flexitarians in the UK’, therefore catering to this demographic can help to boost profits (restaurantonline.com). Further supporting this analysis is data provided by Statista, which highlights that the revenue for the meat substitutes market reached over £769 million in 2023 and is set to exceed £900 million in 2024 (statista.com).

Sustainability

As well as vegan and plant-based options, consumers are heading towards venues that carry out sustainable practices. A survey carried out by TLT shows that 24% of people ‘would look at the ethical and sustainable information’ available about dishes.

In response to this, 33% of operators stated that they ‘were planning to make changes within their business in the next 12 months’ in an effort to practice sustainability.

The benefits of opting in for a greener approach to operations are evident in consumers’ willingness to pay more at sustainable venues. Insights provided by Simon Kucher suggest that ‘”Millenials” (ages 27 to 42) and “Gen Z” (ages 11 to 26) are willing to pay even more for sustainability. We found that 36 percent of Millenials and 50 percent of Gen Z reported being prepared to pay more than 20 percent price premium for green restaurants.’ (simon-kucher.com).

Social media

Getting the word out about your business has never been easier considering the proliferation of social media in recent years. This rise is set to increase over the next 12 months as apps like TikTok and Instagram continue to grow in popularity, not only for younger generations, but also for digital marketing of businesses.

A study by Barclay’s highlights the importance of making ones’ brand known on social media as customers are ‘willing to pay £28 more at venues that will ‘look good on the gram’. In addition to this, 41% of those surveyed ‘believe an active presence on these platforms is now the single best way to judge if a restaurant is worth visiting’ (barclays.co.uk).

You can learn more about the benefits of an online presence by reading our blog post on the importance of social media marketing in the hospitality industry here.

Conclusion

In conclusion, as we step into 2024, the hospitality industry faces both challenges and opportunities. Reflecting on the trials of 2023, marked by financial strains and labor shortages, it becomes clear that adaptability and foresight are paramount for success in the ever-evolving world of hospitality. This blog post has provided a glimpse into the anticipated trends that will shape the industry in the coming year.