New data shows environmentally friendly initiatives, wider menu choices, alcohol-free beverages and the use of AI are the top four trends in hospitality for 2024.

The 2024 Hospitality Insights and Dining Dynamics report by merchant commerce platform Lightspeed Commerce Inc has pinpointed the ways businesses can better negotiate the challenging state of play for the industry during the cost of living crisis.

Lightspeed Managing Director, APAC Andrew Fraser (above) said: “2023 was another year full of disruption and uncertainty for the hospitality industry.

“The impact of inflation and a cost-of-living crisis weighed heavily on consumer spending, impacting venues. Although
it’s difficult to predict what will happen this year, there are emerging trends in the industry that restaurant operators need to be aware of to stay current and adapt, ensuring a successful year ahead.”

AI makes its mark

Fraser said technology can help reduce the financial burden on operators with many planning to use it to save money on overheads, improve customer service, and overall operational efficiency

“In 2024, AI is anticipated to play a more prominent role in the hospitality sector and restaurants can expect the introduction of new programs aimed at optimising various aspects of their business.

“From cutting costs and enhancing customer service to automating inventory management and customising menus. The integration of AI into Point of Sale (POS) systems will also increase, enabling restaurants to automate tasks like stocktakes and provide menu and margin suggestions based on sales data.”

The vast majority of venues (91%) already using AI. For example, nearly half of Aussie bakeries (49%) are using AI to help with employee shifts and scheduling. Businesses surveyed stated the ways in which technology was benefiting them included, saving money on overheads (39%), improving the customer service (33%) and overall operational efficiency (33%). However, staff training and adoption (29%) was believed to be the biggest barrier for businesses to further optimise their tech stack. 

Sustainability a selling point

According to Lightspeed’s research most (85%) Australian hospitality businesses believe implementing environmentally friendly initiatives will attract more customers.

The sentiment of bar, hotel and restaurant owners is shared by Australian consumers with 34% stating that they want to see more sustainable food sourcing, this could be either with local or seasonal ingredients included on the menu. 

As a result, hospitality businesses have already implemented a number of greener initiatives which include going paperless (37%), using recyclable cutlery and packaging (36%), serving organic or farm-fresh produce and offering customer incentives for using reusable products (35%). 

“A growing number of Australians are concerned about environmental issues,” Fraser said.

“Restaurants are expected to do more on their part to ease these concerns. As a result businesses will actively reduce consumption with initiatives ranging from adopting digital receipts, using bump screens instead of paper for order dockets, and embracing a plastic-free environment.”

Wider menu choices

While sustainability tallies up with what operators think customers want and what consumers say they expect, it doesn’t when it comes to vegan or plant based items.

Lightspeed’s report found that vegan or plant based options were top priority for operators ,with 31% of venues incorporating it to their menus in 2024; however, only 13% of consumers indicated that they’d like to see more vegan or plant based options in 2024.”

However, options that cater to alternative diets are sstill appealing, with gluten-free and keto options viewed as a selling point by 64% of consumers.

Rise of alcohol-free beverages

An emerging trend is a greater demand for non-alcoholic beverages, which is being driven by cost of living concerns and health considerations of consumers.

Alcohol-free beverages were regarded as a selling point by 59% of consumers.

The volume of no-alcohol beer, wine, spirits, and ready-to-drink (RTD) items is expected to increase by 31% by the end of 2024. Fraser advised making sure venues are adapting to this sober curious generation by implementing more non-alcohol alternatives on their beverage menus.

Cost of living crunch

Lightspeed’s report found that the cost of living crisis is still impacting both hospitality businesses and consumers alike. 37% of restaurants, bars and cafes have had to change menu items. 35% have had to change or re-negotiate with suppliers and 32% stated they had to let staff go with inflation levels affecting the sector. Prices have also had to rise with 29% of venues revealing they have raised prices by 27-39% compared to the previous year. 

For consumers, tipping culture remains low with the cost of living crisis still in full swing, 68% of consumers stated they have not tipped anything on their hospitality bill this year.  Surcharges remain a contentious issue with  17% of Aussies saying they feel very annoyed when they see a surcharge on their hospitality bill. Interestingly, this annoys the higher earners more with those earning between $90,000 and $130,000 being most likely to feel very annoyed (21%). 

Despite tough economic conditions, 37% of consumers are still eating out at least once a week with men (45%) more likely to eat out once a week than women (35%). Men are also twice as likely to drink out once a week or more than women (30% vs 16%).

The Lightspeed 2024 Hospitality Insights and Dining Dynamics report can be downloaded here.

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