Over the last several years, the restaurant, bar, tavern, and nightclub (RBTN) industry has experienced and weathered several challenges, beginning with the pandemic in 2020.
“Innovating” and “pivoting” became part of the industry’s vernacular as it expanded outdoor dining with heat lamps, tents, igloo structures, and other fixtures to accommodate social-distancing mandates. Cities across the country relaxed ordinance restrictions, allowing restaurants to set up seating on the sidewalks and streets in front of their businesses. Some municipalities even provided funding to help restaurants transition to outdoor dining.
Contactless restaurant experiences also caught on, with consumers viewing the menu, ordering, and paying with their phones. Contact-free payment, in fact, is estimated to grow to as high as $6 trillion worldwide by 2024, from about $2 trillion in 2020, according to Juniper Research.
Delivery service gained traction, with restaurants using third-party vendors like DoorDash, Grubhub, Uber Eats, and others to get food to consumers. Self-driving robots in several major cities also came onto the scene to make deliveries as the demand for food delivery grew. For example, the company Starship has more than 1,000 robots in its fleet, up from just 250 in 2019. In some restaurants, robots are also being used to transport food plates from the kitchen to tables. Some are even mixing drinks.
In 2022, inflation pushed up costs across the board for the RBTN industry – from food to beverages and labor. As a result, the sector raised prices, made menu changes, and reduced hours of operation to deal with high inflationary costs and wage pressures.
Positive News for 2023
Amid these challenges, the sector has demonstrated its resilience, and the outlook for 2023 is positive. Industry pundits see the rate of higher menu pricing decelerating as both the commodity and labor cost environments become less of a headwind. Additionally, customers continue to be willing to pay premium prices for dine-in experiences and meals at their favorite eateries.
Staffing pressures are easing, with more restaurants returning to “normal” hours. According to the Department of Labor, food service and drinking establishment positions have just about returned to pre-pandemic levels. The inflation rate for food costs is also expected to moderate this year.
According to Restaurant Dive, one trend unfolding in the industry is an increase in dining at the bar. A restaurant bar typically has more drink sales, but according to an article featured in Restaurant Dive, food sales have increased over the past six months. This is good for restaurants, as it increases sales and keeps diners around longer.
Our RBTN Program
ISC’s RBTN program is written with a top-tier carrier and provides General Liability insurance for the following risks:
- Restaurants with and without entertainment, as well as bars and taverns
- Craft beer establishments
- Cigar bars
- Karaoke bars, rooftop bars, ultra-lounges, sports bars without entertainment, wine bars
- Billiard halls
- Liquor stores
Our General Liability product includes Liquor Liability (up to 100%), while our Property coverage includes Business Interruption, Ordinance or Law, and Equipment Breakdown. We provide coverage to establishments throughout the country (except in Florida, New Mexico, and Alaska).
Most recently, we expanded our offering to provide an Excess Liability solution. “We can write both the primary and excess for clients, which is a great opportunity to cross-sell and collaborate to offer additional products. We also increased our Property capacity from $1 million to $2.5 million,” said Kathy Szur, Vice President, Underwriting, Arizona.
ISC continues to be bullish about the hospitality industry and is committed to providing an excellent product for brokers to offer.