The 2024 Hospitality Insights and Dining Dynamics report by commerce platform Lightspeed Commerce reveals that 85 per cent of Australian hospitality businesses believe implementing environmentally-friendly initiatives will attract more customers.
As a result of this belief, hospitality businesses have already implemented a number of green initiatives which include going paperless (37 per cent), using recyclable cutlery and packaging (36 per cent), serving organic or farm-fresh produce and offering customer incentives for using reusable products (35 per cent).
However, 40 per cent of hospitality businesses admit they are struggling to implement these initiatives because of the expense involved. And while sustainability matches with what operators think customers want and what consumers say they expect, it doesn’t when it comes to vegan or plant-based items. The report in particular notes that while vegan or plant-based options is being incorporated by 31 per cent of hospitality businesses in 2024, only 13 per cent of consumers indicated that they’d like to more of such options in 2024.
The report also reveals that technology adoption is at an all-time high, with 91 per cent of businesses already using AI. Businesses surveyed stated that technology is helping them save money on overheads (39 per cent), improve customer service (33 per cent) and overall operational efficiency (33 per cent). However, staff training and adoption (29 per cent) is believed to be the biggest barrier for businesses to further optimise their tech stack.
“It’s clear to see businesses are building their foundations around two things: sustainability and AI,” Andrew Fraser, Managing Director, APAC at Lightspeed, commented. “As they look to navigate through another challenging year, the use of AI and other technologies such as POS will help vendors save time and resources. A shift to further tech adoption will help reduce costs and free up hospitality leaders to implement what customers are expecting from them.”
The report also highlights that the cost of living crisis is still impacting both hospitality businesses and consumers alike, with 37 per cent of restaurants, bars and cafes having had to change menu items, 35 per cent having had to change or re-negotiate with suppliers, and 32 per cent stating that they have had to let staff go. Prices have also had to rise with 29 per cent of venues revealing they have raised prices by 27-39 per cent compared to the previous year.
For consumers, tipping culture remains low with the cost of living crisis still in full swing, 68 per cent of consumers stated they have not tipped anything on their hospitality bill this year. Surcharges remain a contentious issue with 17 per cent of Aussies saying they feel very annoyed when they see a surcharge on their hospitality bill, especially the higher earners (those earning between $90,000 and $130,000) at 21 per cent.
Despite tough economic conditions, 37 per cent of consumers are still eating out at least once a week with men (45 per cent) more likely to eat out once a week than women (35 per cent). Men are also twice as likely to drink out once a week or more than women (30 per cent vs 16 per cent).
“Our findings highlight the consumer expectations that hospitality businesses in Australia need to be aware of,” Fraser said. “Crucially, these expectations are not just centred around a product or service standpoint, but factors such as sustainability initiatives, which will play a key role in attracting and retaining customers. Serving excellent food and drink is important but businesses must not underestimate the wider ethical practices that today’s customer judges a venue on.”
