We are almost a month into the coronavirus crisis. It is just 3 weeks since the lockdown that froze almost all parts of the hospitality industry and the announcement of the wage subsidy scheme that has provided a lifeline to many of those affected.
In some ways it feels too soon to think about the future – but we are a forward-looking group, and it’s in our nature to think about what the customer will want before they have thought of it themselves. Also, many of us are responsible for assets – teams, office buildings, educational institutes – that are currently frozen. We must find the ways in which these assets can thrive again, accepting that the world has changed and we must change with it.
What We Know.
Let’s start with what we know. We know that people will still eat and drink. We also know that hospitality, social interaction and community remain important (even though the ways we can express these things are now severely curtailed). We also know that the world is not going to return to normal in the next few weeks. Coronavirus has affected us in two ways that will take a long time to recover from or normalise:
- Coronavirus as a disease: Hospitality has always been about human interaction, and coronavirus has overnight turned human proximity into a risk to life. In Wuhan today – three months ahead of us – shops and restaurants are slowly opening, but with ongoing requirements for capacity limits, masks and fever checks.
- Coronavirus as an economic disaster: Oxford Economics have begun modelling the possible GDP impacts of coronavirus and even their lower-impact ‘virus contained’ scenario estimates a six-month GDP decline of -9.5% in the Eurozone¹. This will have significant long- term implications for the workplaces and businesses that provide a home for the hospitality industry.
A recent McKinsey analysis neatly demonstrates how the world needs to respond to these twin threats – and our industry will be no different:
1. McKinsey in partnership with Oxford Economics, March 2020
We are currently at stage ‘2a’ in the coronavirus response. Stages 2b and 2c are both about rebuilding – but in different ways. For our industry, stage 2b will be focused on the tactical work of understanding how coronavirus will affect ways of working immediately. Stage 2c will be more strategic: Creating the new business models that will resonate with our consumers under the new- normal that will emerge.
How to Think and Act.
When everything is in chaos, a clear framework is helpful. McKinsey’s early work on coronavirus suggests a five-horizon framework for thinking through and acting on the implications of the disease:³
This framework steps through the questions that we should be asking ourselves at each step of the way, from ‘Resolve’ to ‘Reform’. Clearly, we won’t navigate our way through this in a nice linear way. Equally clearly, different industries will step through these phases at a different pace.
As one of the earliest sectors to be hit hard by coronavirus, the first couple of horizons will be familiar to many of us in the hospitality industry. In just 2-3 weeks we have already made significant strides towards ‘Resolve’. We have closed buildings and venues, quarantined our vulnerable team-mates and implemented social distancing where operations continue. We have also addressed ‘Resilience’: Implementing plans that protect financial liquidity and putting our workforce on a footing that we believe we can support through the worst of the crisis.
Doing these things has placed large swathes of our industry effectively in a medically-induced coma. This is survivable, but not for too long. We will need to start thinking rapidly through our strategies for ‘Return’ and ‘Reimagination’ – both because of economic necessity and because we still have vital needs to meet. For as long as food and drink and social interaction remain critical and valued, this crisis will create opportunities for those who work out how to provide these things in a way that meets the requirements of the new-normal.
The lockdowns will not last at their current scale and intensity forever. At some point we will be out and about again, and we will need food and drink and a warm welcome – even if the conditions under which these can be provided have changed significantly. The ‘Return’ horizon is practical in nature. It is where we work out how to operate food & drink in a way that is compatible with post-coronavirus requirements. We are starting work now to design new covid-aware operations. While these are early days, we would welcome your insights into what factors we should be considering in redesigning the way we work. These factors will include:
- SOCIAL DISTANCING: People will naturally seek to socially distance where they can, even if the strict 2m rules are relaxed
- Queues will need to be managed. We are currently seeing socially distanced queues are very long -we will find ways to manage this without alienating consumers
- Free-movement layouts will give way to more linear restaurant flows – people won’t want to bump in to others or crowd at a counter
- When it comes to guest service, we will create new greeting behaviours that respect physical space while still creating warmth. Digital greeting will also play a greater part
- FOOD PREPARATION AND SERVICE: Customers will want food that is both safe and healthy
- Kitchen operations will need to support greater social distancing – including by moving tasks offsite
- Shared tongs will be out; served food and plated or boxed portions will be in
- Disposables will gain in popularity, but we will find solutions that don’t incur an environmental compromise
- ‘Open’ food – from salad tables to hospitality buffets – will change so that we give consumers the confidence that their food is protected
- Hygiene routines will become more pronounced and visible, including handwashing stations and handwashing frequency, gloves and potentially masks
What will the world look like, the other side of coronavirus? What will our consumers want? If ‘Return’ is largely a practical horizon, then ‘Reimagination’ is strategic. This is where the creative work starts – thinking through the implications of how the world has changed and what new ways of operating will emerge. From what we have already seen in Ireland and in other Compass countries, and from early conversations with stakeholders, here are five trends that we believe will reshape both our industry and many others:
- Resilience is now a thing. We are used to delivering against the twin goals of best- experience and lowest-cost. Resilience is now added to the mix. We have all learned very quickly that it is imperative to be able to withstand shocks, unexpected shut-downs and restrictions, and at rapid speed.
- Wellness will become even more important. Coronavirus has brought conversations around immunity and wellbeing to the fore. Extended periods working from home – and therefore feeling even more sedentary than usual – have fuelled a cottage-industry advising on nutrition, posture, sleep, work rhythms and energy balance.
- More fluid; less fixed. Fixed costs and fixed ways of working are now disproportionately costly. In a world where the threat of lockdowns may stay with us for months or years, we all need the ability to ramp up and ramp down rapidly.
- We are all home workers. By the time this is even close to over, we will all have worked out how to work effectively at home. We will have been forced to fix the niggling problems that have previously stopped us working from home – how to use Videoconferences competently, connecting the printer, finding a work rhythm that is healthy. We will have proved that it’s possible. And many employers will find that their business can (at least mostly) function without the office. Home/office work patterns are likely to change for good. The YouGov survey data below (from 30th March) shows just how remarkably rapidly this is happening already
- Care is the new social currency. Over recent weeks we have enjoyed being nicer to each other. We have clapped the HSE and volunteering is at an all-time high.
We have just started the work to imagine what these trends will mean for the future of our industry. This is an open conversation and we would love to understand your thoughts. To get the conversation started, here are some of the questions we are asking ourselves for the future:
What would it take for the office to become a ‘safe space’?
With continued concerns around social distancing and infection risk, the office represents a potential controlled environment within which health and safety are assured. Maximum cleaning and hygiene would be a given. Guest services could find ways to signal early in in your office visit that you are in a healthy and safe environment. Food would be visibly prepared in a safe, hygiene-secure manner. Spaces would be designed to make social distancing easy, not awkward. Digital technologies could allow our consumers to enjoy food & drink without taking risks with their health.
What are the implications if home and work become blurred?
Employers may well embrace and do more to facilitate effective work from home – including supporting wellness and productivity for their employees wherever they are. We could find new ways of supporting good nutrition, exercise and work behaviours while home working (and many of these will likely be digital). We could even provide great ‘office’ food while you are at home. Equally, the office may increasingly be valued for what we miss now – human connection; easy group interactions. In this scenario we would need to think through the implications of the office gaining more cultural significance while home functions as an annexe of the office.
How can we provide 100% flexible catering and guest services?
Catering in particular has a history of anchoring itself to fixed facilities and a lot of real estate. In the future our teams may well be required to power-up and power-down rapidly, depending on requirements. Offers and wellness support should be consistent, but the location or the offer may not. Pop-ups, off-site facilities and digital catering would all potentially play a greater role, providing the opportunity to significantly reduce the fixed costs of what we do.
This is just the start of a conversation. The practical work of redesigning our operations for the ‘Return’ phase has begun. We are also entering the process of ‘Reimagination’, focusing particularly on the five themes of resilience, wellness, fluidity, home working and care. The questions above will be explored as part of this – as will others that we create with our partners. We are looking forward to working with you to build these ideas and rebuild our industry.