FEATURE / Hospitality
SERVICE WITH A
RELUCTANT SMILE The hospitality industry has done it tough over recent years. And it’s not about to get any easier, with inflation, workforce challenges and social media creating challenges. By MARTIN WANLESS
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f there’s one sector that has done it harder than most over the past four years, it’s hospitality. Shutdowns and general disruption resulting from the pandemic caused significant issues at the time – and those issues continue to be felt. Combined with the inflationary pressures we’re all facing, supply chain shortages and a shallow talent pool, the industry is dealing with significant uncertainty. A number of challenges stem from workforce-related repercussions following COVID-19, says Richard Robinson, Associate Professor at The University of Queensland Business School. “There’s been a major disruption to the workforce, the pipeline of talent and the attractiveness of the industry to different labour markets that would traditionally have seen hospitality as appealing,” he says. “During COVID-19, the middle tier of management, where a lot of the cultural capital of the industry and businesses sat, left the sector as they had valuable transferable skills. “They’ve moved into sectors such as allied health and aged care, and that’s
left a really big gap – which a lot of us see evidence of when we have hospitality experiences now. Consequently, the industry has lost even more ground in terms of being attractive as a long-term career for many labour markets. And that’s going to take some time to build back.”
THE RISKS OF DIVERSIFICATION
As well as dealing with staffing challenges, hospitality venues are being forced to explore new avenues of revenue, and are changing business models – inadvertently introducing new risks, which, from an insurance perspective, prove challenging. “We have found a lot of operators within the hospitality sector have diversified their revenue streams to boost profitability and respond to consumer behaviour,” says Ben Gair, Director at Bellrock. “As such, the landscape of hospitality has shifted with an ever-increasing amount of live entertainment, pokies, technology and other functionalities. This has led to reduced appetite in the
28 / INSURANCE ADVISER DECEMBER 2023 / JANUARY 2024
