Tourism, Hospitality and Recreation faces unprecedented opportunities and challenges according to Westpac who have released their Tourism, Hospitality and Recreation Industry Insights Report. The mood among businesses they spoke with was overwhelmingly buoyant, but some sub-sectors are being forced to reinvent themselves.

New Zealand’s tourism performance has been driven by demand from China, softness in Australia bringing visitors here instead of further afield, new airline capacity and routes as oil prices plummet, a weaker New Zealand dollar, and New Zealand’s reputation as a safe haven. But businesses catering mostly to local residents, such as the performing arts, museums, and sports venues, are finding the going a lot tougher.

Unlike Accommodation and Air travel, Food and Beverage services, the largest employer in the Tourism, Hospitality and Recreation sector, primarily provides services for local residents.

The food and beverage sub-sector has grown strongly since 2000 although rates of growth have stuttered in recent years, with most growth in percentage terms being in Takeaways.

The outlook for Food and beverage services

There are a number of disparate but important trends that will continue to affect the sub-sector:

Flexibility of menu and customer demands: Customers are demanding a wider variety of menu options, and variations on existing menu offerings. Several fast food chains, for instance, have formally introduced options that allow customers to customise their orders. Menus will need to be reviewed more regularly to keep up with customer preferences. “Healthier” options need to be offered as well as traditional staples.

Transparency: Customers want to know more about what they are eating. This will be reflected in a number of ways, from Food and beverage businesses providing nutritional information on their products, to highlighting whether their products are organic or fair-trade, to redesigning stores so customers can see how clean and organised the kitchen is.

A bigger role for technology: From allowing customers to order their meal online before picking it up, or using technology to select an order in-store, to proactively creating or responding to publicity in the media, Food and beverage businesses will need to be digitally savvy to succeed.

Risks over security of tenure: Strong growth in commercial property values in Auckland in particular, but also in some other parts of the country, will likely see large increases in rents for some Food and beverage businesses. Redevelopment of commercial space to increase gross lettable floor area may also reduce security of tenure for the sub-sector.

In the years ahead, the sub-sector will need to face these challenges, and deliver to a customer-base that is increasingly diverse, and demands a wider range of product and service offerings.

Click here for a copy of the full report.

This article was sourced directly from Restaurant Association of New Zealand online here.