After two years of social and economic upheaval, no industry escaped the consequences of COVID-19 shutdowns. The hospitality and food service sectors were especially volatile, with many businesses losing 20% or more of their revenue since the pandemic's start.
But there's a light at the end of the tunnel as hotels, resorts, and restaurants begin to recover. As excitement builds about what life looks like after the pandemic, many businesses want to embark on new building projects or pick up those left on hold since 2020.
However, they face a construction industry still reeling from the challenges that affected them pre-pandemic, including labor shortages, project delays, and material costs. They're also feeling socio-economic pressure to do their part to address climate change.
Now hospitality, tourism, and food service businesses are working with the construction industry to find alternative solutions that address these issues as they move beyond the pandemic.
In a study of Covid's early impact on the construction industry, "83% of respondents reported a pause or temporary site closure because of COVID-19." These closures naturally hurt productivity, but they also contributed to contractors trying to recoup their costs by passing them on to clients as they tried to keep up with rising material, equipment, and energy prices.
In places like the UK, the cost of materials went up by 24.5% compared to 2021. Meanwhile, in the US, lumber prices quadrupled in 2021, causing many businesses to begin stockpiling it along with steel and other resources.
As Kelly Outram, Head of Global Contractor Development at Marsh, observed:
"The contracting environment is under a lot of pressure at the moment. Construction clients are busy with both existing projects and also new tenders, given some of the post-pandemic recovery. Yet, the increasing cost of materials is rapidly driving up bid prices. And this is presenting a real challenge for our clients."
And with the rise in commodity costs, the industry also contended with wage increases, which can account for 50% of a construction project's budget. At the height of the pandemic, this problem only worsened. Between 2019 and 2020, the unemployment rate for construction workers jumped by 95%. The industry as a whole is still trying to regain the skilled labor lost during this period.
Bottlenecks in the supply chain added to an already long list of problems. It's harder to predict when materials will arrive on a job site. There's a state of uncertainty growing because of supply chain interruptions, and now, the conflict in Ukraine has only aggravated issues between suppliers, contractors, and clients, leading to more contract disputes.
After two years of closures and reopenings, pent-up consumer demand has given hospitality, tourism, and food service businesses reason to celebrate. A PWC survey revealed that 25% of consumers plan to travel internationally as restrictions lift and countries reopen their borders.
And for many of these people they're willing to pay a premium for companies who deliver sustainable products, services, and experiences. As Dr. Andreas von der Gathen, co-CEO of Simon-Kucher, noted:
"The relative importance of sustainability during the purchase process will continue to increase. Today, 50 percent of consumers rank sustainability as a top five value driver," he continues. "As expectations around sustainability climb, companies will face significant pressure to prove their sustainability credentials and continue to make it a central part of their value proposition."
Conventional construction contributes to a third of the planet's total CO2 emissions. This, along with construction site waste production, led to many businesses shifting their focus towards more sustainable materials and building methods. Much of this was sparked by grassroots and global initiatives like the Paris Agreement and Fridays for Future. Both strive to reduce our collective impact on the environment and encourage the prioritization of sustainable practices.
For businesses, this means:
Hotel, resort, and food service brands that do this will have an advantage over their competitors who have yet to understand the impact of proving their dedication to protecting the environment.
The use of modular construction has steadily increased since 2015 as architects, contractors, and businesses search for efficient, cost-effective building solutions. For hotels, resorts, and restaurants rebounding in a post-pandemic world, they'll look for ways to:
Consumers and government entities are leaning hard on businesses, especially in the hospitality industry, to raise their standards and pivot towards environmentally responsible building methods.
Modular commercial kitchens offer hospitality and food service brands an economical solution with a low environmental impact. This type of modular construction uses fewer materials than brick and mortar buildings. Production takes place in a factory setting, alleviating many of the scheduling and budget conflicts plaguing traditional job sites because it:
For hotels, resorts, and restaurants wanting to scale, modular commercial kitchens open up new opportunities to reduce their carbon footprint and increase profits. Arka Bhattacharya, Senior Risk Engineer, Swiss Re Corporate Solutions, points this out as well:
"Companies with a diversified portfolio, a resilient supply chain, which focuses on skilling up their manpower, that invest in technology or digitization and innovation of building systems will be well-placed to seize new opportunities in the upcoming days,"
But more importantly, through modular construction, businesses can quickly launch new restaurants and concepts without the budgetary, labor, and scheduling constraints that affect traditional building projects.
ContekPro works with hotels, resorts, and restaurants as they forge ahead post-pandemic. Our modular commercial kitchens provide a sustainable, efficient alternative to traditional brick and mortar construction.
We live up to—and exceed—expectations because each modular kitchen design uses a highly-engineered, repeatable process during production. Compared to conventional building methods, we can construct and implement commercial kitchens in a few weeks versus 12 months—all without sacrificing quality.
Check out ContekPro's Precision and Bolt Series kitchens, which give culinary teams the flexibility to work in an environment optimized for comfort, speed, and high output in any location. Get more information about our commercial kitchen solutions and see how our team can help with your next project.
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