Important Hospitality Business Trends You Need To Know

The Australian hospitality industry is facing the most challenging conditions experienced.

With an ongoing talent shortage, (51,900 job vacancies across the country) hospitality managers are searching for new ways to retain staff. COVID-19 has changed consumer habits, with more people are choosing to stay at home and adopt digital solutions to access goods and services.

foundU has researched our hospitality customers who have been impacted over the last few years. The following is a snapshot of our findings.

Hospitality industry bounces back from COVID-19

COVID-19 has significantly impacted foundU's hospitality customers with a 40% reduction in employees between April and June 2020. According to employment trends from the Australian Industry and Skills Committee, this is reflective of the Australian hospitality industry overall, which saw the employment level decline from 105,500 in 2019 to 76,400 in 2020.

As lockdowns eased and businesses reopened their doors, almost 90% were back to normal by July 2020. By October the same year, there were more people working in hospitality than before the pandemic - suggesting the industry had fully recovered in terms of active employee count.

• Chart 1: Growth of hospitality employees across foundU hospitality customers. Total number of employees working per month between January 2020 and June 2022 for the same businesses. 
  
  

Since the start of the pandemic, total active hospitality workers have grown an average of 12%. Active hospitality employees have grown 10% every month. The industry is dynamic and robust. Hospitality businesses are hiring regularly without large amounts of staff turnover. Employment data from AISC supports this and further suggests that all hospitality-related occupations are projected to show growth to 2025. The strongest growth is projected for general sales assistants, waiters, and chefs.

• Chart 2: MoM growth in employees working in hospitality businesses using foundU since 2020.

Signs of significant business growth

Data from the foundU platform suggests that 50% of hospitality businesses grew. Around 10% nearly doubled their number of active employees. A further 24% remained steady with minor changes to their workforce.

• Chart 3: Workforce growth during COVID-19 (total number of employees) in foundU hospitality customers.

Increases in average shift duration

On average, hospitality staff are working longer shifts. As businesses struggle to recruit talent, the average shift duration has increased from 6h48mins to 7h11mins - suggesting employees are working extra to cover the shortage. This has remained steady since Q4 2021, suggesting this could be the new normal. However, as more employees become available in the market, we expect this average could return to pre-pandemic levels.

Overtime doubles but remains a low wage cost

Hospitality staff have also been working significant amounts of overtime. Overtime hours worked by hospitality employees has doubled since 2020, with monthly overtime per employee moving from 28mins in 2020 to 50mins in 2022. As this trend has continued since the pandemic, we expect this will remain consistent or grow - at least until the labour market returns to normal.

• Chart 4: Average overtime hours paid per active hospitality employee in the foundU platform per month over the last 2.5 years. 

Visa holders decline by over 30%

In March 2020, many hospitality businesses closed their doors. This resulted in a sharp drop of employed visa holders. While recovering slightly in the second half of 2020, employed visa holders have only continued to decrease an average of 30%.

• Chart 5: Visa holders as a percentage of the total active workforce of hospitality customers in the foundU platform.

What's next for hospitality

Based on our data at foundU hospitality has rebounded from COVID-19. However, with the ongoing labour shortage in Australia, businesses are struggling to fill vital gaps in their workforce. We anticipate that total active employees will continue to increase by an average of 7% over the coming months.

Long term, we expect demand for hospitality workers to remain strong as businesses seek to supplement their workforce. The recruitment and retention of hospitality workers will remain a challenge for businesses, however the return of eligible workers back into the market should help ease challenges for businesses.

Insights and projections based on foundU platform data. Based on the same group of 68 businesses over the full timeframe.

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