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How Christmas Affected the Hospitality Industry

Trends 11 minute read 22 January 2020

“Eat, drink and be merry,” is what they all say, right? Only, if you work in the hospitality industry, you’ll be aware that Christmas is one of the busiest and most stressful periods of the year.

It can be enormously profitable and a great time at which to find lots of new customers, but the festive period can also be very challenging for hotels and restaurants across the world.

So, how does Christmas affect the hospitality industry? We’ve picked out six areas likely to impact restaurant and hotel owners the most over the festive period.

1. The impact on food and drink trends

Veganism Christmas trend

There’s no doubting that one of the biggest areas affected by Christmas trade is food and drink, but things are changing when it comes to the world’s favourite festive tipples and dining experiences.

For instance, in 2018, veganism became the biggest trend over the Christmas period, with meat alternatives for the most famous meal of the year increasingly sought after. And it was a similar story in the free-from market, where the likes of gluten-free ingredients contributed to a storming UK market value of £806m during that year.

Traditional festive drinks are stepping aside, too, with gin beginning to take pride of place as the festive tipple of choice for many over champagne and Prosecco.

Source

2. Festive tipping

Festive period tips

Research suggests that while 60% of Americans give tips to one or more service providers during the holidays, only around half of UK households tip their tradespeople at Christmas.

But what about the hospitality industry? A study undertaken by technology company CAKE revealed that while holiday season tipping was down 7% compared to the rest of the year, it actually rose by 3% on thanksgiving, Christmas and New Year’s Day compared to ‘normal’ days.

In the UK, things are even rosier with staff expected to take an additional £20 million home in tips over the festive period.

Tip Pooling in the UK: The Who, What and Why

Tip Pooling in the US: The Law and How to Implement

3. Increased retail festive footfall

Northern Ireland Christmas trade

The hospitality industry in Northern Ireland received a welcome boost in trade during the 2018 festive period with some hotels, restaurants and pubs enjoying over 10% increases.

Food sales fared particularly well, with 51% of the hospitality businesses surveyed reporting an increase in trade.

This followed a tough time for Ireland that was still reeling from a high-profile retail store fire which many believed contributed to a significant dip in retail figures.

The boost in consumer spending over the Christmas period that year resulted in significant numbers of people heading to the high street and, in turn, being tempted by the hospitality businesses that capitalised on the increased footfall with enticing offers.

Despite the unquestionable draw of online giants like Amazon for Christmas shopping, the festive period is clearly still a time when high street footfall will remain consistently high. This represents a brilliant opportunity for go-getting hospitality businesses.

Source

4. The Brexit effect

Brexit and Christmas

Although Brexit is finally taking place in 2020, its impact on hospitality has been considerable for a number of years.

This has been felt particularly during the festive season, with research by Carerer.com revealing that 57% of hotels, pubs and restaurants began to feel the knock-on effects of the Brexit vote most wholesomely back in 2018.

It was during that time that 35% of hospitality businesses found themselves increasingly short-staffed over the festive period due to the impact of Brexit on EU team members.

Will Britain’s exit from the European Union negatively impact the Christmas season for hospitality operators going forward? Back in 2018, the uncertainty surrounding Brexit led to 11% of hospitality businesses passing increased costs onto customers, and that’s a trend that clearly can’t continue.

5 .Employee recognition

Number of people working in hospitality over Christmas

Christmas isn’t all fun and games if you work in hospitality. In fact, for employees in this sector, it’s the busiest time of the year on their work calendars.

It’s thought that hospitality staff work an average of 28 hours overtime every festive season. The impact on work-life balance, quality of sleep and mental health can therefore be considerable.

It’s why employers’ duty of care is especially important at this time of the year, but so too is employee recognition. If we take a look at the UK as an example, the number of people working over Christmas in hospitality jobs is staggering:

Source: The Trade Union Congress (TUC)

It’s therefore encouraging to see companies like Bidfood creating opportunities for its customers to nominate their favourite Christmas workers.

In 2017, Bidfood called on its customers to single out workers who they believe make Christmas extra special for others. This was inspired by the fact that Christmas Day dinner bookings increased by 241% between 2011 and 2017. “There is definitely a growing emphasis on our sector to play a bigger role in people's Christmas celebrations,” confirmed a Bidfood spokesperson.

6. A closer look at festive stats

US states Christmas trade

There are some really positive stats to be had if you dive into the festive performance of hospitality businesses across the world.

In the UK, Christmas and New Year like-for-like sales were up by 2.5% in 2019 compared to the previous year, and while drink-led businesses outperformed others, restaurants trade was up overall, too. Groups did particularly well, with their sales growing like-for-like by 2.5% over the six weeks of the Christmas period.

A “post-election sense of optimism” could partly be attributed to the rise, but it was also encouraging to see that new openings also contributed to a 5.4% increase in overall festive sales.

In the US, fewer people are visiting restaurants on Christmas Day, with sales decreasing by 85% in 2018 alone. Those that do head out over the holiday period do so in greater numbers at lunchtime (Christmas Eve trade peaks at 1pm), and appear to prefer an oriental alternative to the traditional Turkey dinner. Perhaps this explains why Chinese restaurants are the most popular choice on Christmas Day in the United States.

Finally, here are the states that enjoyed the most Christmas Day restaurant sales over the festive period:

  1. Florida
  2. New York
  3. California
  4. Illinois
  5. Massachusetts
  6. Texas
  7. Maryland
  8. Nevada
  9. Virginia
  10. Colorado

Wrapping up

Christmas looks like it’ll remain a crucial if unpredictable time of the year for hospitality businesses.

One thing remains certain, though - there clearly is an appetite to both dine out and stay away when Christmas fever grips, and that should offer hospitality operators plenty of opportunities to capitalise this year.

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