![[Survey] State of Hospitality Business in 2021](https://assets-global.website-files.com/640a2dd38b26e6890f8956a0/64248311327e7c28c5c9bd69_Instawork%20-%20Happy%20Hour%20-%202021-4.jpeg)
With the hospitality industry poised to bounce back in a big way, we wanted to hear how companies are gearing up, where their heads are, and how we can be ready for them in 2021 and beyond. We partnered up with the International Caterers Association to surveyed over 100 catering and hospitality businesses in April 2021—here’s what they had to say.
What happened in 2020
2020 was just plain awful. It was no surprise to hear that hospitality businesses struggled big in 2020.
- Businesses generated on average 45% of 2019's revenue
- 17% reported ceasing all operations
- 75% of respondents furloughed more than 25% of their staff
A shift to “entrepreneur mode.” Of those who remained operational, businesses launched on average 1.8 new lines of business last year. The most common expansions included pivots to meal delivery (43%), small social gatherings (43%), and packaged foods (30%). Some notable ventures included virtual classes and event boxes for remote get-togethers.
San Francisco-based pizza restaurant, Square Pie Guys, extended their brand, even while their business grew through the pandemic. This included a limited-time fried chicken brand and wholesale inventory service. Learn how they were able to manage different lines of business using technology here.
Most took the time to "clean house". During downtime, 65% of respondents invested back in their companies, including sales and marketing efforts and general process improvements.
For instance, Chef Jesse at Whim Hospitality shared with Instawork that he spent the downtime re-establishing service standards and redesigning menus. Read more here.
2021 hospitality outlook is cautiously positive
2021 is starting to look up. A quarter of the way into 2021, we heard 30% of respondents reporting say they’re doing regular business. 55% expect business to return after July, with a peak likely in September.
New lines of businesses (LOBs) are flourishing. The new services launched last year are proving sustainable as regular operations resume. On average, companies are generating revenue from 2.4 offerings (vs. 1.8), revealing that many are adding on regular business instead of shifting back. Meal kits (71%) and meal deliveries (56%) continue to be the top two services.
Growth is on the horizon. Businesses are bouncing back, with 41% reporting they expect to earn 50% or more of 2019’s revenue. Another 10% are growing their business from 2019.
Even though hospitality businesses don't expect to be at full productivity, they continue to help others. 38% of businesses will continue to donate meals to give back.
The hospitality workforce is a top challenge. Finding enough staff is the biggest challenge for 36% of respondents surveyed— less challenging than booking new business. It’s the second-highest “top challenge” behind booking business (which 52% reported as a top challenge).
Additionally, 55% report that they expect less than 50% of their staff to return. This is true for example, San Diego caterer, The French Gourmet, shared that only 7% of his staff expressed interest in returning.
Temporary staff is filling the gaps. Of those businesses that have resumed, 56% have said they’d be needing temp staff.
Some hospitality businesses are going further, integrating their on-call staff with temp staff using platforms like Instawork. For example, Eco Caters fully combined their workforce into a super roster to reduce HR overhead.
Vaccines are recommended, but not required. On the vaccination front, 77% will not require a vaccine for employment. However, the majority (69%) will encourage one. For more on vaccination guidance, read this Q&A recap with top labor law firm Littler Mendelson.
Businesses are eager to learn. Learning the fastest way to return their businesses back to “normal” states. Many said webinars, hosted by the International Caterers Association, Instawork, and other associations were helpful for learning to navigate COVID-19.
And while business is looking positive for many, there is still much to navigate, such as shifting labor dynamics, health safety guidelines, and access to funding.
About the survey: Survey was conducted in April 2021 to International Caterer Association members and Instawork customers. Number of respondents = 103. Respondents are located in 11 states, 35% in California. 72% listed their business as Catering.
Instawork is a leading flexible staffing solution located in over 20 metro cities, including California (SF Bay Area, LA, San Diego), Texas (Austin, Dallas, Texas), Boston, Chicago, Las Vegas, Miami, NJ/NYC Metro, Phoenix, and more.
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