In 2023, Australians became more cautious with their spending as a result of increased economic pressures, with hospitality venues being disproportionately impacted. While this presented its challenges bars across the country, it also saw the emergence of new trends and a focus on consumer experience.
According to SevenRooms research, two in three Australians say that due to cost-of-living pressures they are opting for quality over quantity when it comes to on-premise experiences. Paul Hadida, General Manager APAC at SevenRooms, says this led to one very noticeable trend.
“Venues that focused on enhancing guest experience, and therefore increasing value, saw great results. Based on thousands of reservations on SevenRooms in Australia, there was a 26 per cent YoY increase (2023 vs. 2022) in reservations that were completed with prepayments, such as upgrades, experiences, and events.
“On average, those venues generated 25 per cent more revenue from prepayments compared to 2022. So, the enduring challenge of 2023 was economic pressures, but there were many opportunities for those who prioritised guest experience.”
Hadida says that using guest experience as an antidote to economic pressures was a significant trend that allowed many venues to maintain a loyal customer base, with areas of digital advancement also proving popular.
“Hospitality wasn’t immune to hype, and we saw an increase in investment and interest in AI. Whether that was something as simple as using ChatGPT to create new menus or website copy, to using AI to automate table management and order produce. It’s hard to believe but we’re still in the comparatively early stages of AI, and we expect a lot more use cases in 2024.
“We also saw a big push towards omnichannel in 2023. Rather than relying on one booking channel, the venues that saw the greatest success were those that used multiple. That’s because Aussies no longer just discover new bars when out wandering. Today, they discover and book venues online, on multiple channels – from social media and Google to a venue’s website and marketplaces.
“Not only that, they’re reserving ahead, to avoid disappointment. So, we saw lots of venues investing in their omnichannel marketing, to ensure they were present wherever their customers were,” he added.
With the adoption of omnichannel marketing, bar owners and operators have access to more first-party data than ever before. As consumers prioritise experience, Hadida says that the use of data in personalised marketing has tangible benefits for guest experience, retention, and revenue.
“As a consumer, if you receive a personalised email based on your habits and preferences – rather than a one-size-fits-all message – you’re far more likely to open it and engage with that venue.
“Imagine two guests at a bar; one typically only reserves a table during happy hour and drinks beer when they do. The second prefers a peak slot and clearly has a penchant for fine wine. If you’re promoting an evening with a guest sommelier, it’s likely only one of those two customers will be interested; just as only one would be interested in a pop-up by a local guest brewery.
“Ultimately, the more personalised a venue can be, the more likely its guests will return. According to SevenRooms, almost half (43 per cent) of guests would be willing to share their personal information if it meant they’d receive an enhanced customer experience.”
One concept that it is growing in popularity for service-based businesses, and slowly making its way into the hospitality industry, is dynamic pricing. While we don’t often see dynamic pricing used on-premise in the same way that we do other industries, such as ride-sharing apps whose prices increase in real-time in line with demand, Hadida says the dynamic pricing model can be applied to other areas to optimise revenue.
“Dynamic pricing exists in bars, but predominantly under the guise of happy hours or early bird prices, which allows venues to boost revenue during traditionally slow periods.
“This is where venues really need to unlock their data. For example, if your reservations are in two-hour slots, but your average turn time is one hour 15 minutes, you can better utilise that time. By changing those slots to one hour and thirty minutes, you can serve more customers and generate more revenue, without having to increase prices. That’s not dynamic pricing, but it’s a dynamic – and sustainable – way to boost revenue without your guests incurring extra costs.”
Back to basics
Above all, while many bars may see big and bold strategies as a crucial component in navigating economic challenges, Hadida says the venues that focus on doing the basics, but brilliantly, are those enjoying the greatest success.
“When we talk about basics, we’re talking about all the small things that are easy to overlook, but genuinely do impact the guest experience. So, make it easy for them to discover you online and place a direct reservation. Make it easy for them to contact you should they need to. Let them join a virtual waitlist if you’re fully booked, or notify them when their table is ready.
“When they’re in your bar, ensure your guest experience is memorable and meaningful. And when they leave, use approved guest data and automated marketing to recommend drinks, dishes, or events they might like. Ultimately, these fundamentals – that focus on both experience and relationships – are what they remember, recommend, and return for.”
Looking to the year ahead, while times are tough, Hadida says that venues must focus on what matters most, improving retention.
“As always, there will be a raft of new trends that venues look to capitalise on; from more sustainable menu options to AI-generated menus, and integrating augmented reality and virtual reality into the on-premise experience.
“There will be many trends, lots of them fleeting, but the venues we expect to win in 2024 will be those who can block out the hype, and focus on what’s most important: their guests.”