The new developing trends are asking new questions of operators who are adapting to the new behaviours emerging. Across the City, a number are noting that “Thursday is now the new Friday”: that hospitality outlets are recording relatively strong performances on Tues, Wednesday and Thursday but that Friday’s are still very quiet.
It supports the growing belief that the working week will see higher densities over Monday to Thursday with greater hybrid working models emerging. Understandably it is causing conflict and concern as all begin to learn with the new landscape emerging and it is not all straightforward. For example, average spend within business operations is increasing, more than expected just as are costs across many hospitality operations.
Many operations are planning off 60-70% capacity levels for the foreseeable and the increased pricing is seeing them return to almost 2019 levels. However is it sustainable? Will the consumer be prepared to support the high prices being demanded or will wage inflation need to rise accordingly?
Will many operations, most especially in professional and financial zones, now plan to open only at times of higher number densities and be closed on Friday – Monday?
How will this all impact on the major hotels across the City centres? Will average room rates recover? What is the new sustainable business model for 2022-24?
The counterargument is that numbers will return in time but it will be a 2-3 year process. However, by 2024-25, large numbers will have returned to city centres; that city centres will adapt to a new reality and attract new audiences into the centre. This view is supported by the belief that international business travel will also recover by this time.
All this leads to the natural question – how will many existing operators change as a result? What will they look like by 2024? How will services be different?
So many questions to answer and is far from easy to understand all the trends. The Events sector is reporting very strong bookings and performance, back to 2019 levels. This is encouraging but the above questions do linger in the background as they will impact on the long-term.