Gold Rush 2021: The Time To Invest In Hospitality Is Now

gold rush hospitality invest
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Article contributed by Michael Schatzberg

The hospitality industry is on the road to recovery from pandemic-driven revenue losses — and the time to invest in the sector is now as more innovative companies streamline the way restaurants and meal delivery operators can maximize profits.

Virtual restaurants, curbside pickups, QR-code menus and contactless pickup and delivery are just some of the ways the industry is operating at the intersection of food and technology in the new normal. Hospitality-driven startups that tackle ways to automate production and delivery, reduce front-of-house costs and build up a businesses’ reputation and reach are becoming more appetizing to investors.

Indeed, investments in food-tech reached $8.4 billion in the first three quarters of 2020, according to Finistere Ventures. That’s up from $7 billion in 2019. Restaurant-tech startups have accelerated in recent months as a result of pandemic-fueled demand. Toast, a startup that sells point-of-sale software to restaurants for online ordering, went from a valuation of $4.9 billion in February before the pandemic hit to $8 billion at the end of 2020 by helping restaurants optimize their take out businesses.

Some of the most noteworthy companies in history, like Airbnb and Uber, started up after the Great Recession, and hospitality will be no different with services that can help owners and consumers adapt in the changing world. Who knows what the next unicorn will be?

HERE ARE SOME OF THE MOST INNOVATION INDUSTRY CONCEPTS TO WATCH: OPTIMIZING THE GUEST EXPERIENCE TO RETAIN AND GROW A CUSTOMER BASE  

Eighty-seven percent of full-service chain, franchise or independently-owned restaurants report an average of 36% drop in sales, according to data from the National Restaurant Association from December. That’s why now more than ever, owners are looking to rely on ways to optimize the guest experience to retain customers and increase their visits.

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  • RAK Porcelain
  • DAVO by Avalara
  • BelGioioso Burrata
  • Imperial Dade
  • T&S Brass Eversteel Pre-Rinse Units
  • Day & Nite
  • AHF National Conference 2024
  • Easy Ice
  • AyrKing Mixstir
  • RATIONAL USA
  • Cuisine Solutions
  • Atosa USA
  • McKee Foodservice

Startups like Ovation do exactly that, by giving restaurant operators feedback on how customers are feeling about things like third-party delivery service, pickups, and in-dining experiences managing a restaurant’s reputation online to ensure more five-star reviews ultimately boosting revenue.

Other socially-driven startups helping restaurants get the word out about their business include virtual ad agency Targetable, which generates paid Instagram and Facebook ads tailored to each business. This helps restaurants familiarize guests with their brands online and get them craving more.

HANDS-OFF HOSPITALITY

The future of dining out is digital — that means QR codes and sleek digital menus in place of paper, and allowing guests to order food and pick it up themselves safely.

Minnow is one company that’s helping to feed the need for contactless interactions with pickup pods that store food orders and keep them fresh until pickup. Customers simple scan their QR codes when they’re ready to pick up their orders, grab food and go.

STREAMLINING DELIVERY

Fifty-one percent of restaurants were using a ghost kitchen to manage orders as of May, 2020, according to Technomic Foodservice Impact Monitor. And as restaurants continue to rely on multiple third-party delivery services, many are having trouble keeping track of orders from multiple systems and tablets, whether it’s UberEats, DoorDash or others.

Startups like Chowly are streamlining the process by integrating a restaurant’s POS with all online orders so owners can manage third-party menus in one organized place.

BUILDING A BIGGER FOOD SERVICE NETWORK

Restaurants are increasingly looking for new talent on the fly following COVID-19-related shutdowns. Now, more startups are using niche social networks to bring on and retain new employees.

ClockedIn, for example, operates as an on-demand staffing platform helping businesses fill open shifts. Alerts are sent out to a broad network of restaurant employees trained specifically for restaurant roles tailored to the brand to cut out the traditional onboarding process saving operators time and money.


Michael SchatzbergMichael “Schatzy” Schatzberg is the Co-Founder and Managing Partner of Branded Strategic Hospitality and the Managing Director for Branded Restaurants. He has over 35 years of marketing, brand development, management, business development and hospitality experience. Schatzberg started working at Duke’s in 1995. He went on to turn a single concept restaurant into a multi-unit Hospitality Group -opening a second Duke’s location in Manhattan, and re-branding Big Daddy’s from a 1969 soda shop into a twist on the classic American diner. Schatzberg has developed, grown, and managed 6 hospitality concepts and advises over 22 restaurants in NYC. He is a founding member of the NYC Hospitality Alliance and Member of the New York State Restaurant Association.

After being an early adopter to Hospitality Technology within his concepts and serving as an advisor for many start-up HI-Tech companies, Schatzberg founded Branded Strategic Hospitality, an investment & advisory company, that leverages its ecosystem of hospitality venues, expertise, and deep relationships to influence, redefine and evolve hospitality technology (“HI-Tech”) and Food & Beverage innovation. To date, the company has made 21 direct investments.

  • T&S Brass Eversteel Pre-Rinse Units
  • AyrKing Mixstir
  • Easy Ice
  • McKee Foodservice
  • Atosa USA
  • RAK Porcelain
  • Day & Nite
  • DAVO by Avalara
  • AHF National Conference 2024
  • BelGioioso Burrata
  • Cuisine Solutions
  • RATIONAL USA
  • Simplot Frozen Avocado
  • Imperial Dade