The 2023 Hospitality Forecast for AU and NZ
In 2023 we are projected to see higher demand for services, staffing shortages and most likely an economic recession. So what does this mean for your business, and how can you prepare?
The increase in consumer demand is a relief after years of slowdown, but with the pandemic, a war across the world, a recession looming, and the cost of living on the rise costs to run a business is at an all-time high. While an increase in demand will help increase revenue for many businesses, it also means that there will be increased competition for employees and customers alike. With record-low unemployment (3.3%* in New Zealand and 3.5%** in Australia) we are already seeing staffing shortages.
The growth in demand for services will also lead to an increase in the need for qualified workers. In order to retain your best employees, consider what makes them stay at your company. To help make your business more appealing than those of your competitors, you may want to create incentives like bonuses for executive staff, rosters that benefit full-time workers and an environment that focuses on well-being to reduce burnout. Ensure that the pay you are offering is reflective of the market, not just a standard percentage increase across all roles. Also, make sure you have clear company values so that your employees understand how they fit into the bigger picture - embodying your values day to day will remind your team why they choose this job over others on offer. For more information on engaging and retaining your team check out this blog!
When it comes to mitigating the effects of a labour shortage, there are several steps you can take to ensure that your business is prepared.
“We are seeing a huge influx in working holiday visas with a lot from the UK. They come with great experience and hospitality in the UK is well regarded, could find ways to get them onboard and if they are open to sponsoring etc for the right person,” says Team Leader for Hospoworld NSW, Paige Cunniffe.
In New Zealand, immigration issues mean finding foreign talent is near impossible, so upskilling your existing team so that they’re ready to step up to the challenge is imperative. This means having conversations with your existing staff to identify their career goals and investing in their training & development to align those goals with the needs of your business. You could also consider outsourcing some tasks (finance, admin, marketing, cleaning) so you don't have to hire additional staff. Another great option is to partner with a recruitment company, such as Hospoworld, in order to cut down on the time-consuming process that is hiring. Partnering with a recruitment company is especially useful when there is such high competition between businesses for new hires. Hospoworld has been operating across AU and NZ for over 15 years and has a well-established database of candidate connections that can be utilised to save time on advertising.
The hospitality sector has been growing steadily over the past few months, with the industry projected to continue growing. So how do these numbers translate into new opportunities? As more people travel abroad post-pandemic, there will be an increase in demand for hospitality services which adds pressure to the level of service delivery expected. Hiring quality staff who can provide excellent guest experiences so as not to lose business or risk losing repeat customers (who might bring friends along next time) is imperative.
There's no way to know for sure what will happen in the future. However, you can take steps to ensure that your hospitality business is prepared for whatever comes its way, and possibly even take advantage of changes in the economy.
Keep in mind that even if the economy takes a turn for the worse, it doesn't mean that people will stop spending. In times of economic uncertainty, consumers tend to spend on small luxuries such as going out to eat as people tend to celebrate and treat themselves with more affordable options. You'll just need to make sure they feel like they're getting their money's worth when they do! Here are a few tips to prepare your business for a recession:
Don’t jump to fire employees.
With recessions lasting 12-18 months maximum it's important to remember the importance of retaining valuable staff when new hires are so hard to come across, and cost valuable time and money to train. If needed, cut down on their hours or cut down on your opening hours/days.
Keep a closer eye on consumer demand.
During a recession it’s vital to keep a closer eye on trends within your sector and business, adjusting inventory to the current market and not what the market was is essential.
Talk to employees about the waste they see in the business.
You’re not the only one with an opinion on your business and what could be changed. Unless you ask, you’ll never know what valuable insights and improvement suggestions your frontline staff may have for current processes
Consider price changes to reflect the increase in costs.
This is a no-brainer, but be careful! It’s important that the quality of the service and experience customers expect from you isn’t jeopardised by doing so.
Lean on your local community.
The pandemic saw an increase in love for locals, make the most of this. Continue to connect with your local community to show them why you stand out from the crowd. Get vocal on social media and share your delicious dishes and fantastic team.
Remember, while recessions can be daunting, they are followed by long-term growth. With all these trends in mind, preparing your business for a recession also means preparing for the positive change in the economy that comes afterwards. Prepare for the worst and then hope for the best!