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Tipping Point: How consumers need to support the industry

With the reopening of the hospitality sector now in sight, Helen Collingborn, Associate Director, shares thoughts on how businesses can begin to recoup losses from previous months.

With the reopening of the hospitality sector now in sight, Helen Collingborn, Associate Director, shares thoughts on how businesses can begin to recoup losses from previous months.

On Tuesday, I started receiving excited messages from friends that we can at last, meet at the pub.

This week’s measures of reducing social distancing from two metres to ‘one metre plus’ has been met with positive applaud from the industry. It’s a huge relief that will mean many more businesses will be able to open than would previously have been possible.  I am sure consumers will in turn welcome this news that they can return to hotels, cafés, pubs and restaurants after such a long period (judging from my friends’ responses).

Sadly, the reality is that whilst some businesses will be able to recoup some of the losses from the previous months, it could be many years for others (especially in light of a landscape of increasing costs and the majority of venues trading at 70% due to reduced distancing). And the hardest hit will be smaller, independent businesses. What’s clear, is that the industry needs further financial support in order to survive.

As an industry that brings in £73 billion to the economy and employs 3.2m people (the fourth biggest employer in the UK), I am sure many will agree that the Government must invest to give the sector the support it needs. With more than 2m employees currently furloughed and a third of businesses believing they will never reopen some sites (Source: UK Hospitality), the reduced social distancing measures clearly won’t be enough.

Looking further afield, businesses in other countries have taken matters in their own hands. Belgium has launched a ‘Helpy Hour’, a reversal of the traditional Happy Hour, where consumers are asked to pay double. This is seen as a temporary measure so that businesses can continue and will be able to revert back to Happy Hours in the future. In America, some restaurants have started tacking on a ‘COVID-19 surcharge’ to customers’ bills to account for their increased costs.

We’ve seen a huge change in UK consumers’ behaviour as a result of COVID-19, from buying local to purchasing online. But will this behaviour continue once lockdown eases, or will people return to their old patterns? Will those who are so excited for the opening of hospitality be willing to support it with the looming shadow of recession?

In comparison to US counterparts where wages are lower, us Brits are not well known for our generous tipping.  Every hospitality business will now be feeling the pressure, with chefs and front of house staff bravely returning to work, and at a time when costs are mounting for operators in the sector. Will we as consumers be willing to put our hands in our pockets to support this crucial industry? Previously tipping for meals has been the norm, but perhaps there needs to be a consideration to add tips for drinks too?

With the re-opening guidance from the Government encouraging the use of contactless ordering/ ordering through apps, it’s likely that payments will also be cashless. This presents an opportunity for businesses to add a discretionary tip to the bill.  With pent up demand from consumers and pressure on hospitality outlets, this could be a move that would be welcomed by the industry and beyond.

From a communications point of view, perhaps now is the time for the industry to come together to drive this behaviour change in tipping, to be transparent with consumers on how tipping directly  supports the industry be it their favourite restaurant, café, local pub. Our own research has shown that consumers are currently favouring information on the way companies are protecting their employees, over updates relating to their own personal safety, convenience and crucially, their wallet.

Tipping has always been a hotly debated topic so this change can only happen if we highlight to consumers what it will mean to the industry and those it employs.  Now is the time to communicate this message to consumers to safeguard the future of the sector.

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