Hospitality in 2022: a brief trends report

It’s hard to believe we’re about to embark on the holiday season followed by end of year celebrations. This year has been a dramatic roller coaster ride. Between the ongoing COVID-19 lockdowns, the rise of interest rates, inflation and the impending recession, hospitality brands have all been impacted in several ways this year.

As we look ahead to better days, it seems fitting to also look back on how far the industry has come. Many factors and trends surfaced for restaurant brands this year, but some stand out more than others. We’ve decided to pull some of the biggest trends from this past year that differ to previous years.

The growth of off-premise ordering

Not only are restaurants maintaining their off-premise sales, they’re now looking at ways to manage demand without heavy reliance on third party marketplaces. “About 33 percent of foodservice-sourced meals were eaten at home before the pandemic, according to research from Datassential’s 2022 Food at Home Keynote report, compared to 44 percent of food service meals eaten at home this year.”

Although consumers are happy to return to their dine-in habits from time-to-time, there’s a brand new appreciation for taking meals to-go or ordering them for delivery. This is something experts are predicting will remain as we move into 2023, with the National Restaurant Association’s (NRA) 2022 state of the restaurant industry report showing nearly three-quarters of millennials and two-thirds of Gen Z say takeout/delivery is essential to the way they live.

The labour shortage remained top tier problem

This is probably one of the most prevalent issues in the industry at the moment. It doesn’t take being a restaurant owner to feel the impacts of staff shortages, knowing they affect the entire operations and impact the overall guest experience. Luckily, with the introduction of QR code technology and applications such as Table Ordering and Tabs, it’s become a bit easier for brands to manage their guest experience while also maintaining output.

In the NRA’s recent report, the US restaurant industry is still down 750,000 jobs — roughly 6.1% of its workforce — from pre-pandemic levels. Although this is a sample snapshot from the US, it only takes a quick google in your locale to see several headlines echoing the same struggle.

The industries biggest brands couldn’t fight the pressures of inflation coupled with supply chain issues

Across the board, several giant QSR and FSR restaurant brands have openly discussed the impacts inflation has had on their menu pricing strategies for 2022. From McDonald’s, to Chipotle, to Starbucks, no major brand has surfaced unscathed from the pressures of rising prices. The good news is, many CFO’s reported their increased prices appeared to be well received by the consumer, as inflationary pressure is presenting itself well beyond the food and beverage industry.

Taking a closer look at commentary from Chipotle’s CFO Jack Hartung, in their Q3 2022 earnings call, he mentions “the benefit of menu price increases offset elevated costs across the board, most notably in dairy, packaging and tortillas. In Q4, we expect our cost of sales to remain at about the same level, as the benefit from the menu price increases will be offset by higher beef, chicken, dairy and tortillas.”

Other commentary on the call notes to their menu price increases being allocated to assist with staff shortages and competitive wages for retention. Compared to Q3 2020, CEO Brian Niccol said Chipotle’s menu prices are up over 20%.

A dramatic increase in hospitality tech adoption

Not only did technology product adoption increase in the restaurant industry in 2022, it’s forecasted to be one of the top elements restaurant brands are planning to allocate more budget towards in 2023. Big uptake in 2022 surrounded on-premise ordering technologies that directly improved operations and the guest experience, such as QR code ordering. But, what are the biggest technology movers starting to take priority towards the end of Q4 and likely into 2023? This recent Forbes article says “innovations to improve the customer experience, like geofencing, ordering kiosks and even artificial intelligence.”

Not only are restaurants starting to rely on AI to increase profitability and improve the guest experience, they’re looking for ways to take some of the power back from aggregators when it comes to off-premise ordering. Tools like MOBI Upsell, which also use AI to recommend the right item at the right time for guests, have shown incredible improvements when it comes to average order value. Even in the early months of release, our recent testing showed that on average upsell suggestions are accepted by 5-10% of guests who order on MOBI storefronts. When upsold products are accepted, the average value of the order is 15-30% higher.

As it related to geofencing and improved ownership of the guest experience off-premise, products such as Last Mile Delivery allow brands to better manage delivery options directly to their guests. Using geofencing technology, Last Mile Delivery creates a game changing experience for guests in regards to food quality while also helping brands reduce food wastage.

It’s been real, 2022

Safe to say we’re all hoping for a little less ambiguity in 2023, but regardless of what comes our way, survival in 2022 shows brands can step up and overcome whatever challenges come our way. At MOBI, we’re wishing all business owners the best of luck over the coming busy weeks and we’re ready to see what the new year throws our way.