InTouch | January 2024

INtouch

Be a part of our award-winning Restaurant Week South Carolina campaign!

As the voice of the restaurant industry, the South Carolina Restaurant and Lodging Association is dedicated to promoting our world-class culinary and beverage community right here in South Carolina. Established in 2010 by the SCRLA, Restaurant Week South Carolina is an 11-day celebration of our state’s vibrant culinary scene.

Restaurant Week gives local, regional, and national food lovers the opportunity to enjoy amazing values during brunch, lunch and/or dinner at a number of participating restaurants. Restaurant Week’s goal is to position South Carolina as one of the top culinary destinations in the nation by increasing awareness of the many dining opportunities available in the state, as well as stimulating business and revenue for restaurants. From fine to casual dining, participating restaurants will may feature new menu items, offer fan favorites, and/or develop your own multi-course menu during Restaurant Week South Carolina.

This is the perfect time to find new customers, generate repeat business, and grow the bottom line. Our Restaurant Week campaigns are a powerful business tool that offers full “brand-

South Carolina Restaurant Inspections to get a Farm-To-Table Makeover in 2024

A new sheriff is coming to town for restaurants and other foodservice venues.

The S.C. Department of Agriculture will start handing out the health and cleanliness grades that public dining establishments must display at the start of the government’s new fiscal year on July 1.

to-hand” marketing stewardship year-round and to ensure ongoing success, we continually develop new promotional programs and encourage the spirit of innovation.

Restaurants aren’t the only business to benefit from Restaurant Week. It helps increase tourism, therefore increasing revenues for hotels, stores and other local businesses. We use the Restaurant Week campaign as a platform to showcase our state’s restaurant diversity, while helping build its culinary reputation. Marketing efforts target consumers interested in food, beverages and travel.

Our newly rebranded website offers maximum exposure, as all of the RWSC marketing is directed and/or linked to this site.

Consistently, Restaurant Week campaigns have generated more than 2-million page views year after year with diners eager to view Restaurant Week specials across the state.

Visit SCRLA.org/RestaurantWeekSC to learn more and sign up today!

The new duties are part of a state law designed to restructure the S.C. Department of Health and Environmental Control, which has handled the inspections for decades.

The agriculture agency will now be responsible for all retail food-safety inspections, including commercial kitchens, school cafeterias, catering businesses, grocery stores and some convenience stores. It is also taking over DHEC’s manufactured food programs, which oversee the safety of soft drinks, cheese and dairy products, bottled water and ice.

The food-safety transfer is a natural fit, according to the Department of Agriculture, which has regulated wholesale food manufacturing for nearly 50 years.

The agency also regulates animal feed safety, specialty food producers, and produce farming and already has specialized labs that conduct a variety of regulatory testing.

The agency “has a great reputation for protecting the public and working with South Carolina businesses,” Hugh Weathers, the state’s agriculture commissioner, said in a

written statement. “These new duties will strengthen our ability to assure food safety while also streamlining services for businesses.”

About 115 workers now based in DHEC’s restaurant inspection division will transfer to the agriculture department’s Consumer Protection Division. Restaurants will be held to the same standards and regulations as before, but the shift means a new sign sporting the inspection grade and agriculture department logo will start showing up on eatery doors.

The department will “have even more involvement in every step of the food system, from when it’s grown to where it’s eaten,” Weathers said.

What do consumers desire in 2024 when they eat out?

Value and convenience, mostly, and though those are universal qualities most any time, an uncertain economic outlook and increased food prices have seen consumers slowly shifting their habits after re-emerging in 2022 into the general market and enduring inflation throughout 2023.

R.J. Hottovy, Head of Analytical Research at Placer.ai, recently sat down with The Food Institute to discuss what’s coming in 2024 in the restaurant sector.

January 2023 saw a strong start in both retail and overall dining spend from consumers compared to the year before, but as the year has continued, those trends are reversing— consumers are eating out less, staying in more, and preparing for the winter amid an uncertain economy.

“We’re starting to see some normalization,” Hottovy said, “as some of the spending in restaurants driven by the holidays is now leveling off a bit.”

As of September, year-over-year spending in both categories is around -5%. Spread among different restaurant categories

– QSR, Fast Casual, Specialty Coffee, Casual Dining, and Fine Dining – monthly visits has swung almost 20% except in the specialty coffee category, though this may have more to do its annual appeal and the return to the office for many consumers.

“Consumers want to stretch budgets,” Hottovy said. “Visitation trends holding steady show a big change in consumer behavior; fast casual is thriving, possibly due to the value and ease of mobile ordering combined with takeout. It was already happening pre-pandemic but has now accelerated and is here to stay.”

Consumers remain price-sensitive and are exploring more channels to find values. Across the broader food category (restaurants, grocery, dollar stores), people are shopping in different channels more than ever before. They’re trialing different locations and brands, and as inflation pressures the common consumer, many are shifting toward dollar stores, ALDI, and value chains to stretch their budgets. Private label and branded products are playing an increased role in that as well.

“Innovation is key next year,” Hottovy concluded. “Consumers want value and convenience. Automation is hitting its stride after almost a decade of hype and slow implementation.”

Despite declined hotel performance growth in the second half of this year, CBRE, a global commercial real estate service, predicts rebounding revenues bolstered by improving inbound travel.

Hotel performance growth in 2024 will be influenced by changing travel demand and other economic factors, CBRE’s Head of Hotel Research & Data Analytics Rachael Rothman said in the report.

“U.S. hotel operators faced stiff headwinds to demand and pricing power over the summer due to the number of Americans who elected to vacation overseas, go on cruises or stay in short-term rentals or other alternative forms of lodging,” Rothman said. “We expect RevPAR trends to improve modestly as we head into 2024, as these headwinds ease and the number of inbound international travelers further recovers.”

At the end of the third quarter, the hotel sector was still feeling the impacts of what CBRE called a “summer slowdown,” brought on by significant outbound international travel.

Demand declined for the second consecutive quarter in Q3, and ADR growth was the slowest since post-pandemic recovery began in the first half of 2021, CBRE said. RevPAR growth similarly declined in the quarter, and occupancy at all hotel location types were below 2019 levels.

But Michael Nhu, senior economist and CBRE’s head of global hotels forecasting, said he feels confident about a rebound in the coming year. “We are optimistic that the eventual return of more than 4.7 inbound international travelers will boost occupancy and pricing power back toward their historical trend lines,” he said.

In a separate November report, PwC forecasted that hotel performance growth will continue to decline in the fourth quarter of 2023 and into 2024 due to economic headwinds, geopolitical tensions and changing traveler behavior.

However, the company expects a gradual rebound in hotel occupancy rates to start in the second quarter of 2024, along with RevPAR growth once again exceeding PCE inflation. PwC predicted similar RevPAR (2.7%) and ADR (2.4%) growth rates for 2024.