Hotel. Restaurant. Cafe.

Easy look at hospitality businesses headway

HoReCa — is HOtel, REstaurant, CAfé
*This term is applied to the hotel and restaurant business sector.

Let’s learn more about a business where service is a key product for getting a profit and analyse this industry a little to understand whether it is worth paying your attention to it.

HoReCa — is the services of hotels, inns, guest houses and restaurants, as well as the rental of apartments and, in general, refers to hospitality and catering services. This is one of the most promising things at the present stage of development of the world economy.

How about coming back in time to the first hotels in ancient Greece and Rome?
They arose about two thousand years ago and were the forerunners of modern hotels. Merchants, wandering artists and minstrels, pilgrims stopped in such places. As you can see, the desire, need and necessity to travel existed about two thousand years ago and nothing could affect this industry.

The same story is about the restaurants in their very first form. Places where people could eat deliciously and drink appeared in the same era as the first hotels.

For sure past hotels and restaurants were significantly different from those we know today, but the principle was the same.

Right now we live in the world of constantly evolving IT sectors and sometimes it seems like no other business can be profitable, stable and labor market has only geeks vacancies to offer. But based on the above, we can understand that before new business and professions in the field of technology occurred, the hotel and restaurant business existed and the demand for it has never fallen to the ground zero. One of the reasons for a drop in demand for a particular HoReCa business may be very high competition, but it is worth mentioning that competition stimulates creation of better climate for guests and thereby increase demand.

I always say that in the competitive environment the best ideas can appear to stimulate the progress. Imagine the race with no players, would you still have a desire to win?

Another reason for a drop in demand has become Covid.
During the pandemic, hospitality has taken one of the biggest hit, but at the same time managed to stay afloat.

Restaurants very quickly adapted to new business systems by providing delivery even to the most remote parts of the city, where some of the competitors were simply too lazy to go. Hence, most restaurants not only survived, but were able to cover rent, keep jobs and pay salaries to employees in the most difficult moments.

According to a study by ResearchAndMarkets, the volume of the global online delivery market in 2018 amounted to $84.6 billion. According to analysts, active growth will continue in the future — by an average of 9.8% — until 2026.

At that time many hotels had changed the tourist format into long-term accommodation. After all expenses were cut to the limits, the main task for hoteliers was to look for income. Some of them came up with promotions for their visitors: they invited guests for self-isolation and even offered to rent a room for the price of an apartment.

So, for example, one problem of the United States was solved — the lack of affordable housing. Repvblik, a company focusing on adaptive reuse of all classes of real estate, decided to expand in this area by buying the Days Inn hotel at the beginning of the pandemic. After the reconstruction, it turned into a residential complex with more than 300 studio apartments.

Many Spa&Wellness centres focused on the health of their clients and continued to provide health services.

Front offices have tried a new remote format and and avoided staff turnover.

One of the reasons for the successful forecast for the HoReCa — is the constant need to travel, because people love a good vacation in a beautiful hotel with snow-white, crispy linen, and later in the evening to spend time in one of the restaurants which serves local delicacies. In addition to the constant need, there is also a must to travel through the peculiarities of work, eg. business trips.

Lately the number of drivers affecting the demand for hotel and restaurant services has increased. The hotel and restaurant business is one of the most favorable sectors of the global economy, but what about professions?

In the next articles we will talk more about jobs in hospitality and analyse labor market, so keep updated!