Effect of Corona Virus on the hospitality industry and expected post-Corona industry

ZOTTO LTd. (“ZOTTO”) is a UK based Fintech company privately owned. ZOTTO , provides business accounts, payments solutions and automation to medium and small businesses. ZOTTO is registered in United Kingdoms as a payment’s services institution according to UK law and regulations and approved by the FCA. ZOTTO  is regulated by FCA .

Effect of Corona Virus on the hospitality industry and expected post-Corona industry

There is no doubt that the COVID-19 pandemic has forced our entire society to change how they live, work and play. That has had a dramatic effect on a number of areas, but perhaps none more so than the hospitality industry. In fact, from the moment the first cases were identified in Europe, even the initial measures introduced such as social distancing immediately impacted cafés, bars and restaurants. Now we are months into the pandemic, the impact on the hospitality industry is clear, and while we look at those effects, it is also important to look ahead to the post-pandemic economy and what that means for the hospitality industry as a whole.

The State Response to Covid-19

When looking at the impact of the pandemic on the hospitality industry, what we really look at are the effects of state legislation and strategies implemented to fight the virus. Across Europe, after the initial move to social distancing, with people asked to stay 2m apart, there have been a number of other initiatives as the infection rate first rose dramatically and then slowed.

Social distancing

The hospitality industry first encountered issues with the social distancing rule, for bars, restaurants, and cafés, keeping customers 2m apart was largely impractical without significant changes to the way the business operates, even requiring physical changes to the premises. However, while many adapted with queuing systems and other temporary adjustments to maintain trade in some, albeit limited form, the continued rise in cases during the early phase of the pandemic quickly brought in the most limiting of strategies, the lockdown.


As lockdown became necessary to try and cut the sources of transmission of the virus, the hospitality industry, like most others, was forced into an incredibly difficult situation. Closure of all businesses at first seemed destined to shut down the entire industry, however, while many businesses did close, some never to open again, there were some ways in which hospitality businesses began to adapt to the new situation, by introducing new technologies such as self ordering kiosks and ordering mobile applications.
Restaurants couldn’t legally open to serve food on the premises, but many began offering a delivery service instead, and takeaways in some areas saw an increase in demand as people in lockdown at home, especially at the point where panic buying had led to some availability problems for food in supermarkets and other grocery stores.
While there have been success stories like this, overall, the hospitality industry was affected more harshly than any other industry by the lockdown strategy. 84% of all businesses in the industry closed down during lockdown, the average for all sectors was 48%, with the construction industry, at 71%, being the next most affected. With those statistics, it should come as no surprise that staffing was deeply affected too. In the UK, the furlough scheme put in place to protect employees by funding 80% of wages while they are unable to work was used by 69% of hospitality industry employees, leaving extreme uncertainty for the future for millions of workers.

Exiting the first lockdown.

Post initial lockdown, restaurants, cafés and bars were able to open their doors again, however with strict operating procedures in place. For many in the industry, especially the smaller operations, this has required significant investment in equipment and alterations to infrastructure. After a long period of reduced or no income, many in the industry are struggling significantly. This is made worse as restrictive measures for safety mean that for most in the industry, they are running at significantly reduced capacity and with lower staff levels too, and while there have been financial packages to aid businesses including rate holidays, it has left the industry in significant trouble


The biggest problem now for all businesses owners, but especially within the hospitality industry, is uncertainty. Without a clear roadmap to a relatively normal way of living for society, much of the industry is reliant on government funding to survive the short-term and localised lockdowns that have become part of the pandemic strategy.

For both employees and business owners, it is an extremely difficult situation as establishments can be forced to close at a few days’ notice, and planning for even the month ahead is almost impossible. However, while there is a commitment to state intervention to maintain businesses and aid employees, this can be considered a period of treading water, where surviving to see the solution is the sole aim.

Amid this uncertainty though, there have been clear lessons to learn. With both lockdown and later social distancing requirements in place, technology has been at the core of the most effective response within the hospitality industry. Many establishments turned to online food portals, such as Just Eat, Uber Eat and Deliveroo, allowing them to reach out to local customers and provide the delivery service that has been in so much demand.

This does come with downsides though, these portals take a significant cut of the sales revenue, reducing profits for individual businesses. It is no surprise then that other approaches to this are proving popular too. The use of digital portals has shown that consumers are more open to using mobile apps, QR codes and so on for both in person and online ordering. This includes the use of self-service ordering terminals (Kiosk) or apps to avoid the face to face issues of normal service.

To take advantage of this, companies like Zotto offer a range of technological solutions that can help set up these online and in person solutions. Through this technology, every business, no matter the size, has a cost-effective solution that they can use to mitigate the issues surrounding the pandemic legislation without losing control of their process and a significant portion of profits by working through portals.

Additionally, this highly effective approach to serving customers in the new socially distanced norm allows detailed data to be collected about every aspect of the business. Using AI, companies similar to Zotto can accurately predict order volumes and more, streamlining stock control and reducing wastage for businesses of any size.

A post Corona industry

As the broader industry is currently doing its best to simply make it through the pandemic, the question is, what does the future hold? Eventually, a medical breakthrough will allow society to return to some level of normality, we may not know how far into the future that is, but we do know it will come eventually. Can the hospitality industry just return to normal?

There are two things that we have learned so far during the pandemic, there is a huge customer base of people who are eager to visit bars, cafés and restaurants. Both the reopening of bars and state initiatives such as the UK government’s ‘Eat out to Help out’ were received well, with large numbers of customers enjoying eating and drinking in businesses all over the country.

This suggests that there is a vibrant future for the industry post pandemic, if anything the general public seem more enthused about restaurants and bars than ever before, and that is an opportunity for the industry to turn a challenging period into something positive. This is also true for takeaway businesses, which have seen take-up by new customers rise through necessity during lockdown. In a post pandemic world, there is no reason to think those new customers would not become regular ones.

Questions remain about public attitudes, and whether the more spaced out seating and other aspects of social distancing will still be required to maintain customer confidence is still to be seen. Those who have adopted new technology such as app and kiosk ordering will be better placed to accommodate customer concerns, as their systems will have been operating effectively through the pandemic, building trust, and maintaining those systems post pandemic lessens the impact of any change and allows consumers a familiar environment that they can feel comfortable within.

In the long term, businesses who can adapt to new tech are best able to survive the pandemic, those who fail to adapt may struggle both within the constraints of pandemic response legislation and the post pandemic world as customers will be seeking reassurance throughout the adjustment as we return to something close to what we think as normal.


By : Faridoon Qazi