Recommendations for The Hospitality Industry Crisis During COVID-19
By now you have undoubtedly been affected by the recent COVID-19 virus outbreak and are looking for advice to keep operating during quarantine. This outbreak spread quickly and widely, and took most of us by surprise. In addition to its worrying effects on our health, it has also had some serious impacts on our businesses, with some of those unable to complete work remotely being required to shut down until the spread is under control. Sadly, one of the most affected industries impacted by such shutdowns is the hospitality industry. This has put numerous establishments under significant strain, with many losing their revenue streams altogether.
Restaurants, bars, entertainment venues, breweries, taprooms and the like are dependent on the physical presence of customers and the interaction with them; this is precisely why they need to be shut down or limit its operations to control further spread of this pandemic.
Because PourMyBeer is also part of the hospitality industry, we feel very deeply. Not only for our businesses that have been affected by this recent unexpected turn of events but also for all the other restaurants, bars, breweries and others out there who are now scrambling to make ends meet.
For that reason, we’d like to offer several tips for businesses in the hospitality industry to keep sales flowing in some capacity, and also some other advice for restaurants on what changes need to take place and how to make the best of this difficult situation. And, we have created an easy-to-follow Reopening Checklist that will help you reopen your establishment without forgetting anything once you are ready to serve guests again.
How to Keep the Sales Flowing
Take Advantage of Takeout & Delivery
Many Americans, who would ordinarily be target consumers for a dine-in experience at a restaurant, are now staying at home a lot more than usual. This means they have to think about daily food preparation, and this, in turn, means they worry about going to the grocery store frequently to keep their pantry and fridge stocked. What do people do when they don’t feel like cooking a full meal at home day after day? You got it – they order delivery. This is your chance to be there for them at that time and get some sales in the process.
Now, you can take two routes when it comes to delivery, you can start your own delivery system or partner up with a third party. Let’s look at these two options a bit closer.
The food delivery industry is booming, worth nearly $200 billion as of late last year. This is thanks primarily to younger generations: Statista shows that users between the ages of 18 and 34 account for approximately 52% of the user base for online delivery services. Millennials and younger frequently look for food and drink experiences that are quicker and more efficient. They often make use of third-party delivery services, such as DoorDash GrubHub, Uber Eats, and more.
Especially during the time of widespread quarantines, third-party delivery represents a win-win scenario for you and your customers. If you have a restaurant that has been required to shut down dine-in services, it will still allow you to bring in some revenue; customers will be able to enjoy elevated food experiences from the comfort and safety of their home.
If you do decide you are able and willing to go in this direction, there are some positives and negatives that come with third party delivery:
Positives of third-party delivery
- Third-party apps (Uber Eats, DoorDash, GrubHub, Postmates, Caviar and similar) are commonly utilized by the younger generations – this makes it easier for your business to get exposure among that demographic
- Some of these bigger companies, such as DoorDash and Postmates, are now partnered with Google so that customers can order from your restaurant directly through a Google Search
- You don’t have to worry about getting drivers, insurance, etc. when you partner with third-party delivery services
Negatives of third-party delivery
- These delivery services will take a percentage of your sale for every order; this can be as low as 15% and as high as 35%
- The platforms themselves (the app or website) can suggest similar options to your restaurant in the customer’s area, potentially redirecting a sale to another vendor
Your Own Delivery System
If you have the resources and enough staff to make it work, you can also set up your own delivery system (if you don’t have one already). The best way to go about this is to link it to your website, and give it its own section. If you decide to go this direction, here are some tips to remember to make things as safe and effective as possible:
- Make the delivery section of your website as easy to use and navigate as possible
- Ensure you have a delivery vehicle – these can be cars and bikes
- Your delivery staff can potentially be repurposed wait staff. If they are willing, you can convert them to your delivery drivers for the time being
- Find the best Food Delivery Software for your business, compare product reviews and features to build your list
- Determine the payment process – this should primarily decide whether to charge when food is delivered or when it is ordered
TIP: In order to limit the spread of COVID-19, we recommend you begin implementing universal contactless delivery, during which your delivery driver leaves the food on the porch or in front of the customers’ door. This is accordance with public health expert recommendations. While waiting by the elevator or in the car, the driver texts the customer that their food has been delivered, with the picture of their porch or the door with the food placed carefully in front. This is not only going to put your customers at ease but also your staff, who are otherwise at higher risk.
A final note on delivery: Keep in mind that whether you decide to go with starting your own delivery system or partnering up with a third party, providing the food itself means that your restaurant will still need to stay open in a limited capacity, for cooking and some maintenance, which can put you or your remaining workers at risk.
In order to incentivize customers to help you out during a time with little to no dine-in traffic, there are some great potential ways you can give people special offers that will benefit them later on and bring in some sales for you as well.
The best way to promote these types of offers is through the front page of your website, so that anyone who lands will be able to see it. If you have social media channels, that’s also a perfect place to get the word out. Here are some possible formats for special offers:
Meal Subscriptions: Special delivery that is scheduled on a regular/ongoing basis. This can be perfect for customers who cannot or don’t want to leave often, and will need food regularly. This represents a great constant source of income as well.
Delivery Coupons: If you are doubling down on delivery, it’s a good idea to start offering more coupons along with these orders as an investment for the future. Delivery customers will then have a reason to either order from your restaurant again or a dine-in once doors are able to open again.
Gift Cards: These can be made purchasable online, or can be delivered purely digitally through a code to make things even easier. This is where loyal customers really become valuable, as they will likely be motivated out of their care for their favorite’s spot continued success throughout a difficult time. You can offer gift card specials for a bigger amount as well. An example would be: “Get a $99 gift card and get two rounds of drinks for free when doors open!”
A PourMyBeer card can work in this capacity as well – this might be a great way to get your regulars excited to come back once doors open. You can leave the normal Validity Period of 12 hours for the cards, so the customer would require a check-in when they come back another day, so staff can verify it’s them and not someone younger.
Loyalty Club: A Loyalty (VIP) club for customers that support the business now that would be acknowledged in the future, could be a great investment. Special seating, special beer mugs, and other rewards of your choosing could incentivize people to support you. You can even give it a special name tailored to your business, for example, “Momma’s Poppas Supporters” or “Momma’s Papas Gang.”
Stream Events: People are using the internet and social media platforms much more often during this time. For that reason, it would be a good opportunity to create informal events that could be streamed on Instagram or Facebook in order to promote ordering from your establishment.
Operational Changes Required
If you have now repurposed your food menu to delivery, take out, meal subscription and similar, there are a couple of things you should do:
- Focus on food items that are easy to deliver (i.e. fewer liquid dishes and multi-part dishes that are difficult for delivery workers to carry)
- If your freezer is loaded with a certain ingredient, we recommend you to tweak your menu heavily around that item so you can make sure to use those up first so you don’t need to worry about getting a new inventory
Since everyone will be adapting to several changes, it won’t be too much of a stretch to essentially create your off-premise-only menu; this will be optimized for easier-delivery orders and efficient use of inventory. Doing this will help you to make this change easier on your business (and likely the most profitable).
TIP: Unless specifically asked for, minimize the number of items given out. For example, you don’t need to include utensils if people are eating at home and this can save some money in the long run; while the cost of the utensils may not be much for one order, it adds up when you look at an entire week.
Hibernating Your Draft System
If things are slowing down due to shutdowns and you aren’t able to fully utilize your draft system for a few weeks, we recommend taking these important steps to make sure your draft system stays healthy and is ready to continue once you are back up and running as usual. Whether you have a self-pour beverage wall or a traditional bar setup, by hibernating your draft system, you can avoid unexpected repairs when it’s time to start pouring again. Here’s what you’ll need to do:
1. Call your draft cleaning company to schedule your regular cleaning before shutdown.
If your cleaning service provider is not available in the next few days, your system can go up to 2 weeks between cleanings. In the meantime, you can leave your system as is without having to worry about it. Please ask the cleaning tech to leave the system empty of any fluid, including cleaner.
2. Disconnect couplers from kegs and scrub them clean.
To avoid any damage to your system, please ensure all couplers and draught beer system hardware remains disengaged from the kegs and off the floor. They should be stored in a clean and dry environment. You may also want to clean the neck and top of the keg with soap and water to remove any beer that may have leaked or spilled. Dry the top of your keg thoroughly.
3. Turn off gas directly from the source.
This is a safety precaution in case there is an undetected gas leak.
4. Keep the beer storage on at a temperature of 36-38°C.
Increased temperatures will rapidly accelerate aging which will cause irreversible flavor damage to beer and cause the beer to go flat. Warm coolers also encourage extensive mold growth.
5. If your system includes a glycol power pack, we advise you to first discuss options with a draft technician.
If water is left in the lines, the glycol power pack temperature should be raised to 40 °F. If the lines are clean and left empty, the entire system can be shut down.
6. Clean and dry the interior of the cooler.
Especially cleaning floors, walls, and kegs to prevent mold growth.
And once when you are ready to reopen and need to bring your draft system back to life, we have created an easy-to-follow checklist for that.
DOWNLOAD CHECKLIST FOR AWAKENING YOUR DRAFT SYSTEM BELOW!
Taking Care of Employees
One of the most unfortunate impacts that the coronavirus is having on the world is that many workers in the hospitality industry, whether at restaurants, bars, or similar, no longer have a place of work due to quarantine-related shutdowns. This puts many in a tough position, with no source of income to support themselves or their families.
For this reason, there are a number of relief organizations around the country that are doing their best to provide for struggling restaurants and their workers during this period. Some invite loan assistance for workers, others donate directly to closed restaurants. To find out more about such organizations, check out this article by FSR, which talks about several groups.
It is, of course, most important to prioritize employees’ health and wellness by ensuring that everyone respects the strict regulations on increased hygiene standards. If you haven’t already been required to close your doors and send employees home by state quarantine laws, we recommend you to consider slowing down the operations, as this will help curb the spread of the virus.
Taking a step like this is going to be tiring and difficult for everyone. This is why you should also do your best to promote the importance of mental health and advise your staff on how to take care of themselves by providing one of the many helpful guides available online. Stay in touch and talk to each other. With so many technologies allowing people to connect without physical contact, you’ve got plenty of options.
- Slack, GroupMe, Messenger, WhatsApp for group texting
- Hangouts, Skype, Messenger Video Chat, Zoom for group video meeting
If you are experiencing financial turmoil due to COVID-19, you are not alone. On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act into law. This act helps relieve small business owners from total economic hardship through a $350 billion loan. The SBA has a Payroll Protection Program in place, created by the CARES act, that provides loan forgiveness to businesses who keep their employees on payroll for eight weeks. In addition, there will be a delay in all loan payments for six months without any fees from the government or lenders.
Unfortunately, on April 16, 2020, the CARES Act ran out of initial funding after just two weeks.
However, on Thursday, April 24, 2020, the House passed a $484 billion relief package. The package includes $321 billion for the Payroll Protection Program to help small business owners with their loan payments and help them retain employees.
Although it is likely to require more funding soon, you can access the PPP borrower application here if you would like to apply for assistance.
Hours of Operation
Since your operational format has most likely changed quite a bit, we recommend you reconsider your hours of operations and update them accordingly; not only on your front door but also an all other platforms where people can find out about your business – Facebook, Yelp, Google My Business and any other platform that might be relevant to your business. If you are not open for any dine-in hours but are still open for delivery, make sure to express this clearly and tell customers they can still enjoy your food remotely.
TIP: While you’re at it, it might be worth your time to create a post on Google which only stays active for 7 days; this means that these posts show up in Google Maps and search and are perceived to be more accurate since they are recent information. It will make the customers feel more confident that the information they are seeing in your normal listing is still relevant.
And once when you are ready to reopen, we have created an easy-to-follow checklist for you so you can get your establishment up and running in no time.
Download our simple-to-follow checklist below!
Setting Up Online Ordering
We’ve suggested this above, but if you don’t have an online ordering system in place yet, this is an important avenue right now to ensure your sales keep flowing. Some POS systems such as MyAxisPoint have online ordering built-in: you can just simply identify the online ordering tab and activate it.
However, in order to start using it, you will need to determine some basics, including your pick-up and delivery options. If there are any charges that occur during a delivery, you can also set up how you want to receive order notifications. Finally, you will need to set up a payment method for customers ordering online.
If you do not have a POS system with this kind of integration, you will want to scan the market for third-party ordering systems, which let you input your menu information directly, to create a simple ordering platform which you can include on your website or mobile app. A good example and option in this regard is Toast POS’s online ordering system; check it out right here.
Your website will now have a more important role than ever before. You will thus want to make sure it is as welcoming and informative as possible, so that the customer experience is as close to coming in physically as it can be. Make sure it’s very easy to navigate and the option for a delivery is very prominent and clear. You may even want to temporarily restructure your homepage to emphasize delivery more.
In addition, you should make sure that contact options are featured prominently, so that visiting customers know exactly how to get in touch with you. Make sure the phone number you display is one that will be picked up if called, as many customers will still prefer to make delivery or pickup orders over the phone (if you have your delivery service), and relaying information is likely to be easier on a phone call.
TIP: Update your conversion metrics in Google Analytics accordingly. For example, were your conversions previously calculated as clicking a “get directions” button, or something similar? If so, this is the time to change conversions to reflect gift card and delivery purchases.
Marketing Your New Offerings/Services
After you have made all of the operational changes that are necessary for your new service structure, it’s time to do some marketing. Luckily, this part can effectively be done mostly digitally, and we’ve got some useful tips on how to get the most out of your efforts.
Targeting Existing Customers
Existing customers, i.e. people who have come to your restaurant before, are a good place to start for targeted marketing. They are already familiar with you and may be more likely to be invested in your success. Here are some tips to get them engaged:
- Encourage your social media followers or email subscribers to order delivery or take out from your establishment. If you have your own delivery system, this is a good opportunity to encourage loyal customers to order from you directly instead of using third party apps which take the needed profit from you. Send emails or even social media direct messages to multiple followers at once to increase efficiency.
- If there are certain customers that you have a slightly closer relationship with, you can reach out to them directly to encourage ordering, by using messaging platforms or direct text messaging them.
- Add a pop-up to your website
- Live stream on your social media: showing cooks preparing dishes or even showing cooking tutorials for certain dishes, can be a very effective way to engage people. With more time at home, people will now have more time to check social media.
- Arrange some merch giveaways for loyal customers. This is great exposure for you and it allows you to remind them what a great experience they had the last time they visited you on-site or how much they liked the meal they ordered.
Reaching Out to a New Audience
It’s definitely best to start by targeting your current customers, but there’s no reason not to try to acquire some new ones as well. Here are some of the best ways to get some new customers to join your family:
- Geo-targeted social ads can be a great option for restaurants, especially on Facebook and Instagram. Including appetizing pictures of your dishes can attract attention.
- Post your online menu to public locations, such as your social platforms, and perhaps Facebook pages that may have prospects more likely to become customers.
- Add a sign to your front door or windows indicating your current options for getting food from you. Make it positive and inviting!
- Local search is a rising trend in the marketing strategy of any bar or restaurant, and one you can take advantage of. Your location is more relevant than ever; you can pay for ads to appear in local searches
- You can consider arranging for leaflets with marketing materials to be mailed out in certain neighborhoods
Embrace the Downtime
When it comes down to it, there’s going to be a lot more downtime than there was before, but that does not necessarily mean that this downtime can’t be approached in a positive way. With most of your restaurants only on delivery and takeout services or closed altogether, you’ll have an opportunity to focus on many tasks and projects that you were not able to accomplish over the last year or more. For that reason, you can use this as an opportunity to reflect on past performance, and then make various improvements and changes, such as:
- Moving furniture
- Changing decor or style of your space
- Focus on long term online growth, especially SEO. Now that you have more time you can continue adding a valuable online content that will help you improve discoverability in web searches
- Use this time to refresh your food menu, wine list or cocktail recipes
- Take a closer look at your operations and analyze what could be improved when things go back to normal again
- Add little touches to make you more memorable for customers
The recent outbreak is undeniably putting a strain on many businesses, perhaps mostly so in the hospitality industry. But with some careful strategy and planning, you can find some great ways to stay in the game and keep your customers engaged, even if it is not in the same way you are used to. With the level of connectivity the internet has granted us, it’s a great idea to take advantage and put your business in the best position possible both during and after this crisis. We hope these tips will help you do just that.
Stay safe, stay indoors, and remember: we’ll get through this together.