THE C-SERIES 5: COVID-19 AND THE FUTURE OF HOSPITALITY AND ENTERTAINMENT

The C-Series explores the impact Covid-19 is having on consumer behaviour; how we live, work, play and shop, both now and in the post-pandemic world. In this fifth instalment, we focus our attention on the ways the pandemic is forcing the hospitality and entertainment sectors to adapt to a new set of challenges, specifically focusing on restaurants, cinemas, live music venues, sporting events and museums.

Hospitality and entertainment are two industries that thrive because we enjoy shared experiences with lots of other people. We don’t just go to our favourite restaurants because we love the food or go to the cinema to see the latest film on a giant screen, we go because these things mean so much more surrounded by other people taking part in the same experience. When Samuel Johnson observed in 1777 that ‘when a man is tired of London, he is tired of life,’ he could have been talking about anywhere in the world where people derive fulfilment from being part of the crowd.

As lockdown restrictions slowly ease around the world, hospitality and entertainment providers have a difficult job on their hands. First and foremost, they need to remain in business while keeping staff and customers safe. But they also need to ensure that what they offer customers is still rooted in a sense of shared experience, something which is as integral to their propositions as the quality of their food, or music, or service, even if it is less ownable to their brands.

Over the past several weeks, we’ve seen a number of responses from providers in the hospitality and entertainment spaces that show that two paths are emerging: one, by reimagining existing spaces to offer a similar experience in the same setting, and another, which makes more fundamental changes to the offer by transporting them to new places, whether online or in a different format in the physical world.

Path one: Changes to existing spaces

Spaces redesigned for social distancing

The simplest solution, though not without its problems, is to implement basic social distancing measures to ensure the safety of customers and staff. In Amsterdam, where restrictions on bars, restaurants, theatres and other venues are beginning to ease, one restaurant, Mediamatic, is trialling what it calls ‘Covid-secure dining’, whereby diners eat outside at tables within their own transparent glass units, much resembling small greenhouses. Waiting staff wearing PPE bring the food to the table on long wooden planks which are passed through an opening in the glass unit. The set-up provides an intimate dining experience for friends or family but retains the feeling of eating out by having a clear view through the glass screens at other groups of diners.

In Sweden, Hotel Stadt is trialling a scheme that has transformed 67 of its rooms into private restaurants, geared towards consumers that want to go out for a meal but don’t feel comfortable heading to its main restaurant-space. They can head to their own room and phone downstairs to order their food. In essence, this is a half-way house: diners don’t get the full restaurant experience, but it does offer the ability to eat a prepared meal in a change of scenery, and for many right now, that will be enough.

Social distancing measures are also starting to enter live music venues, as first seen this week in Fort Smith, Arkansas, where country singer Travis McCready performed at TempleLive to an audience wearing masks and divided into small ‘fan pods’. Each group of attendees that had bought their tickets together were given their own fan pod, six feet away from the closest neighbouring pod. The system meant that TempleLive, which has capacity for 1,100 people, was restricted to just 229.

The event allowed the lucky few to attend a live music experience with other fans, albeit with some major changes to what they were used to. Yet the dramatically reduced capacity poses questions about the financial viability of socially-distanced hospitality spaces, what has been termed the new ‘empty chair economy’.

Contactless tech and artificial intelligence

Other brands in the sector are experimenting with new technologies, many of which were emerging long before the pandemic, which limit or entirely remove human interaction in their spaces. South Korea’s cinemas began to reopen at the beginning of the month, and leading chain CJ-CGV has implemented tech that completely reimagines the customer experience at its Yeouido cinema. In addition to basic social distancing measures like staggered seating and fewer screenings, the cinema has replaced its human staff with automated kiosks and AI robots, and it has made services such as ordering snacks available through its mobile app, all of which comes together to form a customer journey with no human contact.

Creator burger restaurant in San Francisco, long a favourite at GDR for its impressive (and aesthetically stunning) burger-making robot, has innovated again in response to the pandemic by installing a pressurised ‘transfer chamber’ into the front of its store for takeaway orders to be collected from, which minimises the risk of the virus passing from customers to staff and vice versa. Another San Francisco restaurant, Eatsa, had been bringing orders to customers in a contactless way from 2015, by leaving meals in hatches after the customer has ordered from one of its screens. The company has now rebranded as Brightloom, and has pivoted to selling its technology to other restaurant brands.

These examples from San Francisco can offer helpful blueprints for ensuring the safety of staff and diners, although they aren’t solutions geared towards enabling customers to dine-in. These technologies do exist, and they represent some of the standout restaurant innovations we saw in the months prior to the pandemic from China’s rival technology juggernauts Alibaba and JD.com. Alibaba’s supermarket chain Freshippo opened a restaurant at its Shanghai location in which meals are ordered on customers’ mobiles and delivered by a fleet of autonomous robots. JD.com went one further when it opened XCafe in Tianjin, where robots not only deliver the food, but cook it too.

These innovations provide the benefits of getting food to customers safely and allowing them to eat inside the restaurant, but there is still a considerable trade-off: they don’t solve the problem of reduced capacity, and while automation helps businesses to keep serving customers, it limits the number of staff able to get back into work.

One way in which restaurants might future-proof their businesses throughout the rest of the pandemic’s duration is to arm themselves with another revenue stream. In the US, a number of restaurants are doing this by shifting to what is becoming known as the ‘restaurmart’ model. The ‘grocerant’ concept, by which grocery stores add restaurants to their spaces is being flipped on its head at the moment by restaurants dedicating space to selling boxes of grocery supplies, from fresh produce and alcohol to household essentials such as toilet paper. This was particularly pertinent earlier in the pandemic when supply chain issues left many supermarkets low on those same items, but there could well be longevity in the format by focusing on quality ingredients and giving customers everything they need to make something special at home.

Path two: delivering hospitality and entertainment in new places, in new ways

The return of the drive-in

While reduced capacities are having difficult financial consequences for hospitality and entertainment brands in terms of monetising their existing spaces, we’re seeing lots of providers circumvent these physical limitations by bringing their experiences to customers somewhere else.

So often with innovation, solutions present themselves not from the vanguard of technology but in the revival of forgotten practices. We’ve seen it with milk floats making a comeback in the name of sustainability, and we’re seeing it now in the resurgence of the drive-in cinema. In the UK, @TheDriveIn is touring the country with its drive-in cinema where customers can also take part in a silent car disco, play bingo, and buy snacks to be delivered to their cars. Vilnius Airport, in Lithuania, also staged its own drive-in cinema while flights were grounded at one of its airfield aprons. Cine Colombia is taking a slightly different tack, showing free-to-air movies on outdoor screens close to apartment buildings for people to watch from their balconies.

Rather than attempting to recreate some semblance of the same experience in the same spaces, the drive-in format creates an altogether new experience for consumers, for many of whom the format will feel simultaneously new and nostalgic, having seen them depicted in movies but without ever going to a drive-in before themselves. The format is not only becoming an attractive proposition for cinemas but is proving to have use cases across the entertainment space. London is set to host the ‘world’s first’ drive-in opera, run by the English National Orchestra, and in Denmark, football club FC Midtjylland has announced plans to hold a drive-in at its car park for fans to watch matches on a big screen if the remaining games of their season are to be held behind closed doors.

Immersive experiences in the home

Across lots of categories, not just hospitality and entertainment, one of the most popular ways of continuing to provide a service to consumers is to do away with spaces altogether and to bring the experience inside consumers’ homes. Rather than simply streaming content, we’re seeing a surge in bundling content with product delivery to help consumers get an experience almost as rich and immersive as the real deal from their own sofa.

Through food delivery platform Uber Eats, British cinema chain Curzon offered users the option to order snacks, popcorn, a hotdog and a cocktail which unlocked 50% off a movie rental from its own streaming platform. Secret Cinema, an entertainment company which hosts parties based on a specific movie so that fans can immerse themselves in the world of that film, has also brought its experience to the customer. In addition to a streamed movie, the ‘Secret Sofa’ package also includes tips on what to wear for the viewing as well as recipes for food and drinks associated with the movie to make at home. Secret Cinema has also partnered with ice-cream brand Haagen-Dazs for the series, which is offering customers various deals throughout its run.

While these types of experience packages lend themselves well to cinema brands, a pizza delivery start-up from Los Angeles shows that the concept can work for restaurants too. Belle’s Vampire Pizza describes its proposition as ‘an immersive pop-up restaurant delivered to your door’, whereby each food order is delivered alongside a role-playing game along the lines of a murder mystery.

These home experiences aren’t replicating consumers going out and sharing the same moment with hundreds of other people, but they are offering something new in their own right while keeping overhead costs for the providers relatively low (Belle’s Vampire Pizza, for example, is run out of a dark kitchen). As lockdown restrictions ease to the point that friends and family can visit each other’s homes but still can’t take part in mass gatherings, as is the case in Australia and a number of other countries right now, experiences like these could prove even more popular.

A number of arts and cultural institutions are finding new ways of making their exhibits available online. Art fans in China can now virtually visit various leading museums in the US through a WeChat mini programme that offers not only guided audio tours and videos but a range of interactive games, while China’s own institutions are offering similar experiences.

Live music events such as Defected’s Virtual Festival are bringing performances from fans’ favourite artists online, creating an experience quite far removed from the real thing, but that are intimate and engaging in their own way. Perhaps the most interesting development we’re seeing in the online music space is the rise of performances held in virtual worlds, notably Fortnite, Epic Games’ incredibly popular video game. In February 2019, American DJ Marshmello played a set on Fortnite featuring a digital avatar of the DJ which at the time was the biggest event in the history of the game: 10.7 million gamers attended the performance.

Last month, this feat was surpassed when more than 12 million gamers viewed rapper Travis Scott’s performance inside the game (and including four replays of the event, 27.7m unique gamers attended the spectacle), while the song that was debuted during the performance swiftly went to number one in the US charts. The appeal of these types of digital experiences are not confined to the gaming community. Finland held a mixed reality virtual concert in Helsinki to celebrate May Day that was viewed by 12% of the entire population.

Unlike Glastonbury or Coachella, digital experiences aren’t bound by the laws of physics – Travis Scott’s performance saw his avatar frequently teleport around the Fortnite world – which opens up the potential for some incredible visuals. They also manage to come close to digitally replicating the mass shared experience of live music festivals.

Fortnite’s monetisation of the event through various items of digital ‘swag’ that gamers could purchase, such as Travis Scott’s digital avatar also provides an exciting glimpse at the potential for branded partnerships through games like Fortnite and how they can constitute channels in their own right. The numbers behind Fortnite’s experiments thus far with live music events suggest that far from being a quick fix for the Covid-19 era, performances in its virtual world and others like it are going to be incredibly popular in the long-term.

By moving interactions to new spaces, whether they are delivered as a drive-in, at home, online, or somewhere entirely different, brands can benefit from the novelty of providing refreshing and engaging experiences, aspects of which could be an improvement on the ‘old’ way of doing things. Yet consumers will still want to enjoy the traditional dining, cinema, or live music experience, this will present its own set of challenges to providers, to keep everyone safe while surviving in the ‘empty chair economy’. The best way forward for those who can might be to strike a balance; provide contactless versions of the traditional experience, while constantly pushing the boundaries to explore how your offer can be delivered in new ways.

If you’re interested in talking to us in more detail about any of the themes discussed in this article, or the challenges you’re facing as a business, we’re here to help. Get in touch with [email protected]