Last year, the biggest challenge that the hospitality industry was dealing with was the Covid-19 pandemic and the restrictions that followed. But as the inflation tally went lower, people shed their inhibitions and were keen on living the new ‘normal’.
So were the restaurants. But the year 2022 brought a new set of challenges for the world. With global unrest and economic slowdown giving industries a difficult time, the global inflation rate is soaring to an all-time high, with a definite impact on the hospitality industry.
Several restaurateurs have expressed their concerns over the situation, Miss Tess Dubai owner Sanjeev Nanda being one of them. According to him, the rising price of various materials is emerging as the biggest challenge that the restaurant industry is facing since the pandemic slowdown.
The Dubai-based restaurateur also pointed out that the current situation is an extension of what the pandemic did to global markets, with issues like supply chain disruption, labor shortages, etc. remaining unresolved.
According to Sanjeev Nanda, the extent of the impact that global inflation has on the restaurant industry can be assessed by the fact that there has been a radical shift in consumer behavior ever since commodity prices began to soar.
“Most consumers are trading down, and in some cases, trading out. Dine-in had received a huge blow due to Covid restrictions, and with the rising prices people are opting more and more for drive-thru. This creates a precarious set of circumstances for the industry,” he said.
The Miss Tess owner further added that consumers still want to dine out, but their spending capacities are getting limited due to the rising inflation, which leaves them unable to justify doing so as often as they would like to.
Surveys show that the rising global unrest is making people wary of their expenditure, reducing the tendency of being extravagant that many people had prior to the pandemic crisis.
Those who are still opting for dining out are doing so with a thrifty approach, choosing budget eateries over fine-dining establishments.
However, Sanjeev Nanda remains optimistic about the situation, much like the rest of the restaurant industry.
“We have successfully sailed through numerous crises during the last two years, and I am sure we will overcome this one too.
The key here is to offer value to the customers while maintaining healthy margins. It might seem a bit difficult to achieve in the current scenario, but is nevertheless the most sustainable approach for mitigating this problem,” he said.