27 Sep 2021
Posted in Consumer
Tourism will provide US restaurant sector relief amid increased home dining trends
The US full-service restaurants (FSR) sector was one of the worst hit during the pandemic, with dine-in value recording a sharp year-on-year (YoY) decline of 26.3% in 2020. In a market now dominated by home-centric and digital lifestyles, professional and leisure travel occasions are set to boost restaurant footfall, according to GlobalData, a leading data and analytics company.
The company’s latest report, ‘USA – The Future of Foodservice to 2025’, reveals that the US FSR channel declined at a compound annual growth rate (CAGR) of 2.4% to reach $195.8bn in 2020, down from $220.7bn in 2015. The restaurant sector differentiates itself from fast-food via an emphasis on experience-led and quality dining, features that are of particular interest to tourists looking to explore new cuisines and cultures.
Carmen Bryan, Consumer Analyst at GlobalData, comments: “The fallout from the pandemic period, paired with the ongoing global supply chain crisis is presenting new challenges to restaurants this year. However, there is long-term promise as the economy recovers and consumers look for quality dining over convenience. A boost in tourism—especially now the US has opened its borders again to vaccinated travellers from the EU and UK—will provide some much-needed relief this year.”
Full-service dining is regarded by consumers as a higher-quality option. As incomes continue to rise, growing numbers of consumers will look to travel more, whether internationally or domestically, and seek out more varied and healthy options; and the FSR channel is ideally positioned to benefit from this trend in the long-term.
Bryan continues: “Operators need to consistently innovate their menu offerings if they want to bring in new patrons. Healthy, plant-based offerings will play a big part in FSR players successfully luring consumers back from other channels such as fast-food. This is only further amplified by tourism, which sees people looking for unique experiences and dishes to try during their vacations.”
Speedy vaccination rollouts and gradual economic recovery are projected to support dine-in at restaurants frequently. Therefore, the channel is forecast to strongly rebound and register growth at a CAGR of 6.9% during 2020–2025, with substantial growth in both transactions and average transaction value.
Bryan adds: “With high-scale vaccination, and the lift of tourism restrictions for domestic and international travel, popular destinations across the country such as New York, San Francisco, and Miami offer opportunities to FSR chains to establish their presence and expand their network.”