Quick Service Restaurant Industry: Trends & Analysis

Lesson 13

Objectives

At the end of this lesson, you can:

1. Analyze the difference between Food Service and Quick Service Restaurant Industries

Quick-service restaurants face many challenges, but they also have many opportunities, with new
trends in abundance. In this lesson, you'll learn more about the quick-service trends and some of
the concerns in the industry.

What Are Quick Service Restaurants?

You're familiar with them. You pass them on your way to work, as you run Saturday errands and
as you travel on vacation. You've probably dined at one this week, driven through one of their
parking lots, and maybe even requested a quick snack through a small window cut out in the rear
of their building. Called a quick service restaurant by some, you may more comfortably call it a
fast-food restaurant - any number of hamburger, taco or roast beef drive-thru joints where you
can grab a cheap and quick meal.

The quick service restaurant industry is projected to rake in more than $200 billion in the United
States in 2016, with estimates over the next four years growing that number to more than $220
billion. That's thanks in part to the more than 200,000 establishments the country boasts. The deli
sandwich shop, Subway, has the most locations nationwide, followed by McDonald's, Starbucks,
and Pizza Hut.

In recent years, thanks in part to increased pressure on the industry from fast-casual restaurants
and rising consumer expectations, the quick service industry has had to make quick adjustments
to issues like those we'll cover in the next section.

Analyzing Quick Service Threats

Quick service or fast-food restaurants have come under enhanced scrutiny and face stiffer
competition lately than in previous years. Consumers are demanding more healthful options, and
fast-casual restaurants like Five Guys, Panera Bread, and Qdoba are courting customers who are
willing to pay a little more for a better dining experience.

Here are a few of the more serious issues quick service restaurants are encountering:

1. The rise of fast-casual dining: Fast-casual dining is the world's fastest growing segment of
food service, as consumers turn to restaurants that offer more opportunities for customized meals
with fresher food options.
2. Unacceptable, unhealthful menus: Whether the result of the media putting more pressure on
restaurants to offer more healthful options or the rising consumer demand for better choices,
quick service restaurants are struggling with the perception of unhealthful menu offerings.

3. Poor labor conditions: Fast-food workers across the country have created some bad press for
fast-food restaurants for their less-than-ideal working conditions, long hours, and low wages.
Legislation in some states is working to raise the minimum wage to help address at least one of
those concerns.

Threats to quick service restaurants also present opportunities and trends in the industry. Many
of the restaurants in this segment are working to get a leg up on the competition and appeal more
to the needs of changing consumer expectations. Let's examine a few of the trends sure to impact
the industry moving forward.

Quick Service Trends

From creating more healthful food options to embracing technology, quick service restaurants
have many opportunities to stay in the game.

Here are 5 Technology Trends Impacting the Quick-Service Restaurant Industry

 As online ordering and mobile delivery apps continue to gain popularity and diners
increasingly expect technology-forward experiences, QSRs are challenged with finding new
ways to quickly fulfill orders and keep customers – and their taste buds – satisfied.

“May I take your order?” is becoming “How may I take your order?” – The reason customers
choose QSRs is in the name, they are quick. Offering multiple ways to order – from kiosks to
loyalty apps to tablets – is essential to minimizing customers’ wait times. When lines do back up,
innovative brands are implementing “line busting” tactics, such as having staff walk car-to-car in
long drive-thru lines, ringing up customer orders on tablets or mobile registers so orders are
ready and waiting by the time a guest reaches the pick-up window.

Mobile apps are cooking up physical and digital upgrades – Traditionally, restaurants have only
had to keep pace with orders coming from two locations: the walk-up counter and the drive-thru.
However, by 2021, nearly 50 million people will be using food delivery apps. From a
restaurant’s own app or website, to third party food delivery services, QSRs are now having to
account for orders within and beyond their four walls. From an IT perspective, having a guest
WiFi network is now crucial in supporting in store mobile ordering and mobile payments. To
avoid long lines and confusions, restaurants must also think about restructuring their physical
layout to accommodate the growing number of mobile orders.

Increased focus on privacy and security policies – When the security of one restaurant
location is compromised, it can put an entire brand at risk. QSRs are utilizing firewalls, LAN and
WAN networks to help control security from a corporate level and maintain their brand. Having
the comfort that comes from security measures also allows restaurants to focus more on ways to
innovate.

Digital signage keeps restaurant menus from going stale – Whether it’s by season, or time of
day, menu options are constantly expanding and changing. With initiatives like limited time
menu offerings (LTOs) becoming an increasingly popular strategy within QSRs, more and more
restaurants are opting for digital signage as a way to stay on top of these type of menu turnovers
and updates. Digital menu boards give QSRs the ability to update information to all locations at
once, making sure both staff and customers stay up to date on the latest offers and promotions.

Technology adds extra spice in recruiting and retaining employees – A restaurant’s staff
plays a huge role in customer experience. Often times, a happy employee equates to happy
guests. Being able to offer employees advanced technology gives a restaurant a competitive edge
and helps recruit top talent at a local and corporate level. LTOs also add another layer of
complexity to staff training. Having reliable technology that allows both internal and external
information to be shared – and rolled out – on a national level is imperative to making sure staff
can be quickly and effectively trained on a brand’s latest offerings or special promotions.
“From online to eliminating the line, mobile technologies are propelling the explosive growth of
the QSR category. In fact, research has shown that mobile apps represent roughly 60 percent of
all digital restaurant orders,” said Ray Hatch, Vice President Enterprise Solutions Vertical
Markets at Comcast Business. “As QSRs continually look for new ways to embrace – and keep
pace – with this growth, technology is becoming the secret that helps them to focus on what
matters the most: bringing delicious food to hungry guests.”

Activity

Answer the following:

1. What is the difference between Food Service Industry and Quick Service Restaurant Industry?

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2. How do Quick Service Restaurants help in building a better environment in the Hospitality
Industry? What do they contribute?

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Great work!

Limited Service Restaurant Industry: Trends & Analysis

Lesson 14

Objectives

At the end of this lesson, you can:

1. Learn how a Limited Service Restaurant stands in the Hospitality Industry

The limited service restaurant industry is poised for future growth due to a renewed focus on
consumers and high-quality ingredients. In this lesson, you'll learn more about this industry and
future trends.

Limited Service Restaurant Industry

You probably didn't think to call it a limited service restaurant, but when was the last time you
heard ''I'll take your order when you're ready,'' over the loudspeaker of a drive-thru window?
Surprise! You were at one type of limited service restaurant when you placed that order. Let's
learn a little more about the limited service industry and where it's headed.

What Is Limited Service?

The limited service restaurant industry is probably familiar to you and you don't even realize it;
more than half of the restaurant market share in the United States is made up of limited service
establishments. Limited service restaurants are marked by a couple of characteristics:

 Patrons pay for food selections upfront.

 Facilities typically boast a drive-thru.
 Food varies from breakfast offerings to late-night meals.
  Items are inexpensive compared to casual or family dining.

Breaking it down even further, limited service restaurants can be divided into sub-categories
including quick service (such as fast food chains like McDonald's), cafés, and fast casual
establishments like Chipotle Mexican Grill or Panera Bread. Quick service restaurants are
typically the cheaper of the two sub-categories. Fast casual restaurants serve food quickly as
well, but the price tag is generally slightly higher. The limited service restaurant industry also
includes cafés (Dunkin' Donuts or Starbucks) and pizza restaurants (Papa John's and Pizza Hut).

Limited Service Analysis

Years ago, full service restaurants like Applebee's were dominating the restaurant scene, but the
tide seems to be shifting. Today, more than 50 percent of the commercial food service industry is
limited service restaurants. That growth is attributed to the surge in popularity of fast casual
restaurants, which continue to gain market share, and fast food restaurants reinventing
themselves in both menu offerings and appearance to be able to compete with sit-down
establishments.

There are many examples of restaurants changing their image, including McDonald's. Many
renovations at McDonald's feature more casual, living-room-type furniture. The menu features
high-end coffee beverages and more sophisticated salads and organic options.

Food and beverage sales at limited service restaurants were expected to top $223 billion in the
United States in 2016. The growth experienced by these restaurants outperformed full service
restaurants by almost two percent, with the most significant driver of growth coming from the
fast casual segment. Part of this growth is being driven by consumer demands for fresher and
more high-quality products. These foods are typically more inexpensive at limited service
restaurants than their sit-down dining counterparts. After a few years of declining popularity and
little growth, the industry is finally seeing somewhat of an uptick in consumer spending.

Activity

Differentiate Quick Service Restaurant and Limited Service Restaurant and write you answers
inside the corresponding boxes.

QUICK SERVICE RESTAURANT LIMITED SERVICE RESTAURANT

Write as many Limited Service Restaurants inside the box below, which have already made its
name in the food service industry.

LIMITED SERVICE RESTAURANTS IN THE FOOD SERVICE INDUSTRY

 You did a great work!

Global Trends in Tourism

Lesson 15
Objectives

At the end of this lesson, you can:

1. Identify the different global trends in the Tourism sector

Since the 1950s, international tourist arrivals have increased tremendously, from 25 million
globally, to 527 million in 1995, and 1.2 billion in 2016. The number is expected to reach 1.8
billion by 2030, and to double by 2050. This dramatic growth in tourism is why the development
of sustainable tourism has become part of the global agenda, related to the Sustainable
Development Goals, the so-called SDGs. Let us take a closer look at the travel flows and tourist
distribution. A tourist is defined as a person entering another country for at least 24 hours. About
80 percent of all international travel is leisure, tourism, and 20 percent is business tourism.
Tourism is unevenly distributed around the world, and 97 percent of the world's population will
never fly. This means that just a very small share of humanity is actually part of the statistics,
and often, it's the same people travelling again and again.
According to the World Tourist Organization, 50 percent of all international arrivals are within
Europe. Africa, in comparison, only receive five percent of all international tourist arrivals.
Another important region, Southeast Asia, with 25 percent, the Americas with 16 percent of
international arrivals. The most important tourism flows are between industrialized countries,
including North America, Europe, Japan, and Australia. In Europe, most tourism is directed
towards the Mediterranean, and there are major flows from North America to the Caribbean. The
growing number of people traveling by air each year contributes to the world economy, but also
poses the growing impact and challenge to the environment, including those related to
greenhouse gas emissions.
According to the United Nations, Intergovernmental Panel on Climate Change, IPCC, aviation
produces around two percent of the world's manmade emissions of carbon dioxide, a number
equivalent to the total emissions of Germany, which has a population of approximately 18
million. In the European Union alone, greenhouse gas emissions from aviation increased by 87
percent between 1990 and 2006. While aviation is often associated with growing greenhouse gas
emissions, especially as passenger numbers are rising and people travel longer distances, less
focus has been on its massive generation of waste. Looking at the figures from the International
Air Transport Association, it is estimated for 2016 that airline passengers during transport
generate 5.2 million tons of waste, a figure expected to double by 2030. Where's all the waste
going? Most often to landfills or incineration. As tourist increases in low income countries, more
and more of this waste is also ending up in uncontrolled dumpsites, as the capacity to manage
waste there is insufficient. Examples of such destinations are small island states like the
Seychelles, Mauritius, Aruba, the Maldives, and Zanzibar. In one instance, tourist arrivals have
increased five fold in just 20 years. The popular tourist destinations will benefit from tourism's
positive outcomes, but also risk being hit by the sector's negative side effects, including damage
to the environmental health. Therefore, there is a need for strong partnerships and decisive action
from all tourist stakeholders in accordance with the 2030 Sustainable Development Agenda.

Activity

If you were to travel the world, where would you go and why? What are the factors that
contribute to why you would want to go to that place? Explain you answer.

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Good job! Keep it up!