COVID-19 Within the Hospitality Industry & 2021 Forecast

December 17, 2020

The onset of COVID-19 caused an immediate halt to business operations across multiple industries, and the hospitality sector was no exception. The global pandemic nearly decimated the industry overnight, some faring better than others. The most successful organizations were able to immediately adapt and find unique and intuitive ways to stay relevant to their customer base. Now, nine months after states have enacted various lockdowns, social distancing measures, and business closures, many hospitality professionals speculate on the best way to bring back their workforce and patrons. Ultimately, taking advantage of innovative technology practices to optimize your business and implementing procedures that follow compliance and safety protocols are essential steps that hospitality professionals must take to survive in 2021 and beyond.

Initial Impact of COVID-19 Within the Hospitality Industry

According to Staffing Industry Analysts, “Food services made up a majority of the job gains in May; food services also has a relatively low temporary agency penetration rate.” (2) Where the industry initially saw a significant drop in business, in the summer of 2020, more universities, cafeterias, and other facilities, opened their doors to start welcoming back patrons.

Due to the high-touch nature of the hospitality industry and the significant drop in economic activity caused by the pandemic, a large majority of the hospitality workforce – from contingent workers to employees at the management level – were sharply affected. In the United States, 27.9 million initial Unemployment Insurance claims were processed from March 21st through May 1st. Additionally, according to the Brookings Institution, the total number of hours worked fell by about 60 percent in March. (7) Many of these unemployment claims were submitted by the workforce of industries like hospitality, as well as jobs that are considered part of a “gig” economy. A gig economy is defined by Investopedia as one based on flexible, temporary, or freelance jobs, often involving connecting with clients or customers through an online platform. (9)

The hospitality industry is quite vulnerable, because of the high volume of patrons, large staff work teams, exposure to intra- and international travelers, the potential for contagion through cross-contamination, and multiple pathogen delivery mechanisms. (1) Also, we must remember that the situation is more disparate in businesses that host guests from markets in regions where a higher number of employees are laid off, which can affect the employment problems of countries like the United States in macro-terms. (3)

Additionally, while steps were taken by governments later during the spring and early summer of 2020 for countries to ease lockdowns on businesses, hospitality was frequently among the last sectors to return to anything close to what the industry was like before. Responses by governments to COVID-19 varied from jurisdiction to jurisdiction and were subject to rapid change. (4) Because of tight operational constraints imposed for customers and staff, hospitality business operations had to be drastically altered to provide a safe environment that presented the least risk possible for the workforce and patrons. This included implementing safety measures and protocols that were compliant with local regulations and CDC guidelines. Below, we will describe some helpful factors that hospitality professionals should consider when planning to re-open.

What factors should be considered when planning to re-open?

Since the hospitality industry is high touch, any near-term efforts to bring back employees and customers, whether at maximum capacity or not, should be compliant with local safety regulations and guidelines. Most safety research has focused on food handlers and food safety because restaurants have been labeled as one of the most frequent settings for food-borne illness outbreaks. (1)

Below, we cover different technology practices that hospitality professionals may adopt to optimize operations as businesses begin to re-open, as well as the measures we can expect to see after 2021 when there is not a global pandemic.

Valuable Technology Practices

Hospitality professionals do not have the same luxury workforces in other industries may have. It is harder for these professionals – as opposed to a white-collar role – to connect remotely via tools like Zoom and Microsoft Teams. Therefore, hospitality professionals must get creative and orchestrate a symphony to bring all the working parts together.

There are various measures hospitality management can implement that would allow for the safety of both employees and customers, such as cashless employee pay and contactless pay options for customers (i.e. the ability to tip through an app or kiosk as opposed to a cash tip), social distancing decals, voluntarily extending sick leave for employees, and contactless pickup. Research suggests that technology integration and adoption into hospitality operations will likely be integral in 2021. Preliminary findings indicate that visible sanitizing efforts such as hand sanitizers at the entry, masks and gloves for staff, a limited amount of customers served, rigorous and more frequent cleaning of high-touch surfaces in common areas, and employee training of health and safety protocols are the most important safety precautions customers expect from a restaurant and a hotel. (5) Therefore, once these social distancing measures and decreased capacity of patrons become obsolete when COVID-19 is no longer an issue, experts suspect that some technology measures like app-based delivery and pickup will continue.

Hospitality directors must execute practices that ideally mitigate the sense of risk estimated by customers. Technology-mediated systems, such as mobile check-in systems and cleaning robots, will decrease interaction opportunities and are among efforts that can continue even after the end of the coronavirus pandemic. Not to mention, customers perceive lower levels of expected interaction when technology-mediated check-in services are available. (6)

Looking Ahead: Hospitality in 2021

Lastly, due to the growth of short-term employment contracts caused by COVID-19, there is an increase in outsourcing to specialist employment companies like Headway Workforce Solutions for a skilled workforce. It is more necessary now than ever for professionals to stay on top of top technology trends for potential implementation opportunities in their own business, such as the aforementioned measures like cleaning robots, check-in systems, and contactless payment and delivery options. Beyond also taking necessary sanitation and safety measures to ensure customers and employees feel minimum risk in visiting a business, hospitality directors and professionals should also secure quality talent that has sufficient training and experience, and remain cognizant of first-rate technology that should be implemented to maintain the safest environment for the workforce and its patrons.­­­­­­