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The rise and fall (and rise again) of the hospitality sector

Restaurant boom

In the not too distant past, the hospitality sector has enjoyed a highly positive surge in business. Eating out was very popular among millennials, who generally have a different attitude to meals out than their parents. Baby boomers are more likely to view visiting a restaurant as a rare treat, reserved for special occasions like birthdays or anniversaries. However, millennials are far more likely to view it as routine, going out for lunch or dinner for most social occasions. Younger people also had more disposable income than in the past, with restaurants capitalising on this by springing up everywhere. Furthermore, the rise of social media has only fuelled the hospitality sector. Restaurants and cafes can advertise online and appeal to an almost limitless audience, if their social media presence is well maintained.

Decline

However, there has been a marked decline in business for the hospitality sector. Many millennials, the former top customers for the restaurant business, have embraced a change in lifestyle. There has been more of an emphasis on responsibility with money. So easy recipes to fit in with modern people’s busy lifestyles have become a trend. Moreover, many younger people are attempting to save in an uncertain financial market. Thus, they are beginning to prioritise their spending, leading to a decline in the meal out. In a wider sense, the pound fell dramatically due to the uncertainty caused by Brexit. This in turn lead to restaurants having to increase costs, another turn off for the more thrifty consumer.

Furthermore, there has been a shift towards healthy living, with the ‘clean eating’ trend popular amongst young people. By cooking their own food, people know exactly what they’re eating. Attractive when trying to maintain a healthy lifestyle. There has also been a growing distaste amongst consumers for chain restaurants. Jamie’s Italian, a chain started by TV chef Jamie Oliver, has recently closed 12 of its 37 UK branches. Similarly, Byron Burger has closed a third of all its UK restaurants. There is a view amongst customers that these restaurants are overpriced with a quality not much higher than fast food. And there are just too many of them. Consumers are beginning to vote with their feet.

Are things looking up?

Despite the above, the restaurant business appears to be building itself up again. There has been an overall increase in wages. Hopefully, leading to more people having disposable income once again. To capitalise on the enthusiasm for the healthy living trend, many restaurants have sprang up marketing themselves as ‘clean’ restaurants. Able to prove their produce is ethically sourced and will not be detrimental to the diet. Vegan restaurants are also becoming more widespread. Therefore, more inclusive for the huge numbers of (mostly younger) people embracing alternative lifestyles.

As well as appreciating more alternative restaurants, people are beginning to embrace independent businesses more. As discussed, customers have fallen out of love with chain restaurants. Now, small independent businesses that have been recommended by social media or word of mouth are all the rage. It appears to be the perfect time for those interested in starting up their own independent business within the hospitality sector to begin researching.

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