Each year we take on the role of prognosticators and offer our view of what to expect from the upcoming year. As 2023 fades and 2024 emerges, we have seen the writing on the wall and offer you three trends worth considering for your annual planning.
We start with the role of Artificial Intelligence (AI) then ask you to consider how you entertain your guests and finish with the conditions surrounding service charges. We believe these are opportunities for you to be ahead of a trend that will benefit your business over the course of 2024.
Let’s look into our crystal ball for 2024.
Artificial Marketing Grows in Popularity
You really can’t visit a web-based news aggregator without some reference to the incredible impact of AI on the world. Any thoughtful discussion surrounding artificial intelligence needs to begin with a definition, so here goes:
“Artificial intelligence is the simulation of human intelligence processes by machines, especially computer systems. Specific applications of AI include expert systems, natural language processing, speech recognition and machine vision.”
Your first takeaway should be that AI, as we are currently experiencing it, is not the “machines taking over the world” version quite yet. What it does do is spot trends in large data models that can significantly assist you in operating more efficiently. Perhaps the rise of AI systems is still a fair distance off from delivering directly to our industry, but there is a place where it can definitely bring value right away to the average operator: Marketing Content.
Most of you can’t afford your own design shop to create relevant social media posts or promotional images for your marketing. This is where AI generated images can absolutely transform your marketing design quality and give you striking images to connect with your promotions. No doubt you need to be aware of how AI can support you in all facets of your business, but marketing is the low hanging fruit with little cost and lots of upside.
Let Us Eater-tain You
It is simply not enough in today’s competitive restaurant environment to just deliver quality products in a reliable manner. Gone are the days of enjoying a meal out without some expectation on the part of guests surrounding their entertainment. Most of our readers are already aware of this trend, because sports-themed operators have been living this reality for decades. Unfortunately, for those of you that don’t rely on sports for that entertainment value, you will need to understand this growing trend toward eater-tainment.
Just look at the success of themed restaurants that focus on guest entertainment. From the strong growth of companies like Dave & Buster’s to up and comers like Chicken N Pickle (pickle as in pickleball), operators are learning that your food quality/consistency will only get you so far, but aligning with guests interests in play time is a formula for sustainable success.
If you really need another solid example, the explosion of Top Golf over the past 10 years should be enough to convince you that entertaining your guests is profitable. It doesn’t have to be over the top, but it does have to be engaging. Whether it’s a regular trivia experience, a spirits tasting or a murder mystery evening, or gaming nights, capturing the guests attention has never been more crucial.
The upcoming year promises to demand more entertainment and not less, which goes for sports bar operators not just replying on televised content to do the trick.
Tip & Service Charge Fatigue
When faced with the existential crisis that was COVID-19 many operators sought ways to mitigate the financial hardships of running their restaurants. One strategy was the advent of the service fee. It came in multiple forms and for varying values which sat on top of whatever inflationary price impacts the consumer was already experiencing. Add to that the constant feeling of being petitioned for tips and you have a negative consumer sentiment that cannot be ignored. In short “tip fatigue.”
In fact, the negative sentiment is so strong against service fees that it’s impacting political platforms. President Biden’s administration has already proposed regulatingproposed regulating so called junk feesso called junk fees which would affect hotel resort fees and service charges included on restaurant guest checks.
No question, the tide that allowed service charges to offset the pain induced by COVID-19 on restaurants is turning. If you are still including those charges, you face the very real possibility of backlash from your own guests.
While we can’t tell you what to do, we strongly encourage you to take the temperature of your guests to see if those fees are influencing their decision to visit. Whether you do a poll or just visit a few tables and ask about their experience as they are processing their check, you need to hear the truth of your guests feelings in order to decide if a continued reliance on service charges makes sense. No matter your conclusion, those charges are under fire and clearly trending down in light of the new normal.
While these trends seem evident to us for the upcoming year, that doesn’t mean they are limited to the ones we reviewed. We would love to hear from you which influences you believe will be dominant in the upcoming year.
Either email us or leave your thoughts in the comments. Until then, have a great end to 2023 and stay ahead of the tide in 2024!
