Skip to main content
The food & beverage and tourism sectors are two of the industries hardest hit by the pandemic
  • Save
  • Facebook
  • Twitter
  • Whatsapp
  • Print
Business and Corporate

5 ways hospitality brands can bolster their businesses

With dine-in capacities slashed due to social distancing measures and national borders worldwide closed to control the spread of Covid-19, there is no doubt that the food & beverage and tourism sectors are two of the industries hardest hit by the pandemic.

The 2020 third quarter Customer Satisfaction Index of Singapore (CSISG) results for the Food & Beverage and Tourism sectors reflect this turmoil. Conducted between July and September 2020 with 2,500 local consumers, the survey is part of the CSISG’s annual study of customer satisfaction at the national, sector, sub-sector, and company levels, and it is undertaken by SMU's Institute of Service Excellence (ISE).

Here are some takeaways for players in the hospitality sector.

1. Work harder to make dine-in experiences pleasurable

The CSISG survey calculated customer loyalty scores based on customers’ likelihood to patronise the establishment again, as well as their tolerance to changes in prices. The results might be a wake-up call for food and beverage businesses that are used to relying on pulling in those dine-in crowds.

Restaurant customers who dined in had an average loyalty score of 68.9 points, while those who ordered takeout and food deliveries scored 73.1 and 73.8 points respectively. Similar observations were seen in customers of fast food chains, cafes, and coffee houses (although the disparity was not as pronounced).

Why were loyalty scores lower for dine-in customers? Another section of the survey provides a clue: performance attributes relating to F&B establishments’ visual appeal and ambience, as well as service staff responsiveness, performed below average.

“While Covid-19 measures have undoubtedly been a key contributor to some operational challenges, be it poorer store layout or staffing issues, these attributes do matter to customer loyalty. The industry should consider using this opportunity to innovate and design new dine-in experiences for this new normal,” said Mr Chen Yongchang, Head of Research and Consulting at ISE.

In other words, while vigilant reminders to customers to wear masks and those emphatic crosses marking seats that can’t be occupied are all necessary measures to maintain public health, they are not making the dine-in experience very welcoming. Experiential design and service attitudes have to evolve quickly to balance safety with pleasure.

2. Refine take-out and delivery operations

The CSISG study revealed a marked change in dining behaviour, with 62 per cent of restaurant customers indicating they were either ordering more takeout or food delivery due to the Covid-19 situation.

Businesses that have expanded their operating models to include takeout and deliveries have thus set themselves up well, as such dining preferences are likely to persist in the near future. “This is especially critical for operators who have traditionally targeted the office and tourist crowd, where demand has reduced significantly,” says Mr Chen.

3. Use deals platforms

The study showed that customers who used deals platforms – such as HungryDeals, Burpple Beyond, and The Entertainer – had substantially higher levels of customer satisfaction, loyalty, and perceptions of value compared to customers who did not.

“F&B operators should consider leveraging such platforms to not just gain new customers but also improve customer stickiness,” Mr Chen advises.

4. Attractions operators need to work harder to court local visitors

Only local visitors to Singapore’s tourist attractions were surveyed last year, due to the Covid-19 travel restrictions for foreign tourists.

Asked for the factors that would drive them to make a repeat visit to an attraction they had recently visited, these local respondents ranked the following factors in descending order of importance: food and beverage options, range of activities and exhibits, entertainment or educational value, friendliness and courtesy of the staff, and ease of getting to the attraction.

The bad news: Four out of five of these attributes performed relatively poorly compared to other attributes the study measured. So the operators of local tourist attractions have a lot of work ahead of them if they want to boost their appeal to local visitors.

Says Ms Neeta Lachmandas, Executive Director of ISE: “With the SingapoRediscovers voucher programme poised to provide a boost to the local tourism scene, businesses that are able to leverage these aspects of their service proposition will be most successful in taking advantage of this opportunity.”

5. Meet demand for staycations by allaying consumer concerns

With international travel still not an option, the demand for staycations has naturally grown. In 2020, 63 per cent of the survey’s respondents indicated they would maintain or increase the frequency of staycations, while 71 per cent indicated they would spend the same or more on staycations.

However, these local consumers also had distinct concerns about the staycation experience — 27.1 per cent were concerned about the efficacy of disinfecting the hotel room, 25.8 per cent were concerned with cost, and 16.2 per cent were concerned about hotels being used as quarantine facilities.

Hoteliers should take note of these issues, said Ms Lachmandas. “By addressing safety concerns through education and providing flexible booking policies, and delivering value over discounts, we believe accommodation providers can effectively tap on local demand and make the best of a tough situation.”

See also: Customer loyalty with restaurants markedly higher with takeout or delivery, compared to dining-in

+