HOTELSCOTLAND ISSUE 27 MAY 2020 ISSN 2515-8287
PAUSED FOR NOW... NEWS AND VIEWS DURING COVID-19
CONTENTS 4 NEWS 8 MY PERSPECTIVE NICOLA TAYLOR 14 COMING OUT
RUNNING: STEVE GRAHAM
5 I
16 GOOD PLANNING
WELCOME
don’t know where to start... a month ago I was pretty shell shocked like most of you and we are all wondering what the hotel industry will look like three months from now. There have already been casualities and sadly there may be more. But there is nothing surer we will all get through this. I’ve taken calls from large groups and small independents and the story was one and the same - financial help was desperately needed to keep afloat. The government announcement that it was stepping in to meet 80% ofthe payroll was welcomed - and that money is now flowing. Grants too have been improved although there is still more to do. This digital issue is really is aroundup of what’s been happening, and some, hopefully, interesting articles which may give you some inspiration on what to do next. I would like to take this opportunity to give UKHospitality, the Scottish Tourism Alliance and the SLTA a shout out. They have all been doing an incredible job for their members and for the industry. If you would like to contribute drop me a line. Susan Young Editor
26 HELP FOR HOSPITALITY 30 CHECK OUT
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HOTELSCOTLAND • 3
NEWS
DATA FROM ANALYSTS SHOWS EXTENT OF COVID-19 IMPACT
‘SUPPERS FOR SUPERHEROES’ DISHES UP 500 MEALS A WEEK FOR GLASGOW ROYAL INFIRMARY STAFF Laura and Shane McKenzie, owners of Glasgow’s Cathedral House Hotel in Glasgow, have been providing 500 meals a week to staff at Glasgow Royal Infirmary with the help of Red Onion chef and owner, John Quigley, and his daughter, Rosie, and Chef Claire Bell of Bar 91 and her best friend. Laura told Hotel Scotland, “After we were forced to close the hotel Shane got in touch with the Celtic Charitable Foundation, he has done fundraising for them in the past, and we were told they could help finance food supplies and we came up with this idea, “Suppers for Superheroes’. “We thought Glasgow Infirmary staff doing long days and nights just didn’t have the time to shop and cook when they got home from shifts. So we decided to provide nutritious meals for them instead. “We had the cash for the food we just needed chef volunteers and John Quigley of Red Onion immediately came to mind. He said ‘Yes’ right away and stepped in with daughter Rosie and Claire Bell the chef at Bar 91 and her best friend Paula also volunteered. We needed people who were close because of the social distancing required in the kitchen.
4 • HOTELSCOTLAND
“They do a two and three days shifts, and Shane, myself and my two Anna, and Callum box up the food, and it is picked up at 7pm every night - so staff can pick it up at the start of their shift or the end. We do 30 vegetarian meals and 70 meat meals and we have a menu that is scalable and not too complicated. “The feedback has been brilliant. It has also been really nice to be able to do something for the NHS staff on the frontline. Initially, we had enough funding for six weeks, but we have been careful with our purchasing and have used Failte for just about all the food but we have also had donations from Tommy at the Fruit Market. This means we can run a little longer and we are also looking at providing some extra meals for care home workers too.” The family, who have operated Cathedral House for two years all work in hospitality except for daughter Emily who is a newlygraduated Junior Doctor, who is now working in Dundee. Laura concludes, “Obviously having Emily working as a Junior Doctor brings it all a little closer to home. But at least we know that the staff at the Glasgow Royal Infirmary are getting nutritious and tasty meals to help them continue their good work.”
HotStats data, in its first analysis of full profitand-loss performance since the COVID-19 pandemic swept through the global hospitality industry, reveals that European hospitality nose dived in March. February data was unremarkable, but March saw gross operating profit per available room (GOPPAR) for the month fall a record 115.9%, the biggest YOY decline since April 2009, when GOPPAR dropped 37.9% in the thick of the Global Financial Crisis. It was the first time since HotStats began tracking monthly European data in October 1996 that GOPPAR as a value turned negative at -€8.33. RevPAR was down 66.2% YOY, the result of a 44.6-percentage-point drop in occupancy, combined with an 11% YOY drop in average rate. As all ancillary revenue plummeted, it brought TRevPAR down 61.6%, again the largest YOY drop in the KPI since April 2009, when TRevPAR declined 23.5%. The data shows that COVID-19 is hitting revenue and profit ~3x harder than the Global Financial Crisis and ~4x harder than 9/11. Labour costs were down 28.8% YOY on a per-available-room basis and total overhead costs were down 25.3% YOY. The profit margin was down 45.7 percentage points to -13.1%, the first time HotStats has recorded a negative profit margin for the region. China, the recognised genesis of the coronavirus, continues to suffer negative performance across the breadth of KPIs month to month, but there are signs of improvement. Occupancy in March inched up 7.3 percentage points over February, and while GOPPAR was still in the red, it was 64% higher in March over February in dollar value. In Hubei province, where the coronavirus was first detected, occupancy in March was already up to 58.9%, only an 11-percentagepoint decrease from the same time a year ago. Though much of that occupancy is likely a function of medical workers using the hotels for accommodations, GOPPAR was positive for the month at $22.60, after a negative month of February. HotStats outlook suggests that “hoteliers will be hard-pressed to generate a modicum of revenue throughout the rest of the year and likely will have to wait until there is a vaccine to see profits normalise. In Scotland STR have forecast that Hotels in Glasgow will see occupancy drove by 20.3% in 2020 with a decrease in RevPAR of 25.9% while Edinburgh will fare worse with occupancy levels dropping 21.9% and RevPAR down 32.8%”
NEWS
Spain has revealed its four stages for coming out of lockdown. These include allowing small businesses and hotels to re- open from 11 May, although social distancing will remain in force. Restaurants can start opening their terraces from mid-May, but they must not be more than 30% full during the first phase
HOTELS SUPPORT NHS STAFF WITH ACCOMMODATION OFFERS Hotels and hospitality venues throughout Scotland have been doing their bit for the NHS. Manorview offered rooms in its eight west of Scotland sites to NHS staff who wanted to shorten their commute or just need a rest after a long shift and they were one-off the blocks to offer this free facility while in Edinburgh Ten Hill Place also offered free accommodation to frontline medical staff helping tackle the Covid-19 epidemic. The 12-bedroomed hotel, which is operated by hospitality business Surgeons Quarter and owned by the Royal College of Surgeons of Edinburgh (RCSED), has also kept on all 76 of its salaried and contracted staff on full pay for at least the next three months. Scott Mitchell, managing director of Surgeons Quarter, said, “Being owned by one of the UK’s
BOATH HOUSE in Nairn has been put on the market by owners Don and Wendy Matheson. The couple have owned the luxury boutique hotel for the past 25 years, and are looking for offers in the region of £1,975,000 The A-listed Georgian house has 4 principal reception rooms, and 9 bedroom suites, which have been tastefullydecorated. A Cafe and garden shop, walled garden, orchard, ornamental lake, wildfire meadow and mature woodland are also included. Boath House, which was built for Sir James Dunbar, has been described as the most
most prestigious medical colleges, it feels right that we should step in to offer our facilities free of charge. Our city-centre location means we’re close to several of the city’s vital hospitals, full of heroic staff doing everything they can to keep us safe and well.” He added, “In these uncertain and rapidly changing times, it is absolutely essential that we stand behind our highly talented workforce and give them financial certainty. When we come out the other end of this current situation we will need all of our team to be ready to regrow our business and I, the Company and the College will do everything in our power to avoid cutting our workforce.” The Ugie House Hotel in Keith owned by Robbie and Morag Martin has also opened its 10 rooms to NHS and emergency workers who are working in the area.
beautiful Regency House in Scotland and was built by Archibald Simpson of Aberdeen, whose portrait hangs in the house. Simpson was regarded as being head and shoulders above the men of his time, and by some as an architectural genius. It was on the rising ground in front of the house in 1645, that part of the Montrose’s Royalist force awaited the Covenanting army commanded by the Duke of Argyll. It is said that the army camped in the grounds at a site which is now outside the bottom of the walled garden.
Maryculter House hotel in Aberdeenshire is to be given a comprehensive six-figure refurbishment later this year. The plans include transforming its 40 bedrooms and public areas. The investment will also include its bar/ restaurant Poachers Brasserie which will re-designed to offer informal dining with a focus on locally sourced and Scottish ingredients with a modern twist. A new 162-bedroom hotel planned for Inverness will still go ahead if planners give it the green light. However any decision, on the former Ironworks site in Academy street, by Highland Council, is likely to be delayed until August at the earliest due to Coronavirus restrictions. The Bricks Group plan to build a seven-storey Courtyard by Marriott Hotel on the site and the developers have said that they remained committed to the project and have funds in place. Stuart Robb and Michelle Elliot - of Leonard Curtis Business Rescue & Recovery Glasgow - are the Joint Administrators of The Sea Door Limited, operators of The Scalloway Hotel in Shetland. Located on Main Street, in Scalloway, the independent hotel has 23 rooms, a bar and 2AA rosette restaurant. After reviewing the Company’s options - following a difficult couple of years trading and in light of the COVID-19 pandemic crisis - the directors made the difficult decision to close the hotel and appoint Administrators at the end of March. HOTELSCOTLAND • 5
NEWS
CRERAR LAUNCHES NHS CELEBRATION WEEKEND AND URGES OTHER TO GET INVOLVED TOO
C
rerar Hotels, the privately owned Scottish hotel company has earmarked the last weekend in August to give NHS and Care Workers and their families a weekend to remember – the NHS Hero Celebration Weekend, once the lockdown is over and it is urging other hospitality businesses to get involved too. Paddy Crerar, CBE, Chairman, Crerar Hotels said, “Our hope is that other Scottish hoteliers and hospitality businesses join us in this big thank you. We thought of bringing together a larger more coordinated group and had to dismiss that. Every business has suffered, some may be able to join and that can only be their choice. We certainly hope some will, and will still feel we are doing what we can if it’s only ourselves that are able to commit. We are privately owned, Scottish and hefted to where we are - for others it’s maybe different.” Every Crerar Hotel, and there are seven in total, the Golf View, Nairn; Thainstone House, Inverurie; Deeside Inn, Ballater; Oban Bay, Oban; Isle of Mull, Craignure, Mull; Glencoe Inn & Gathering, Glencoe and the Loch Fyne Hotel, Inveraray will give every bedroom, executive room and suite (382 rooms in total) to this for a very special exclusive Friday and Saturday night stay which is tentatively set for the end of August. In addition to the free stay, dinner (be that AA rosette dining or a casual inn dining) and breakfast during the stay will be gifted. The hotel group has come up with the ‘Scottish Hospitality for Heroes’ campaign to say thank you to all the key workers and it offers these heroes an opportunity to experience the true “Spirit of Scotland” through Crerar’s ‘Spiorad na h-Alba’ hospitality and outstanding locations. Crerar Hotels CEO, Chris Wayne-Wills, “We are determined to make this as big a thank you as we can. Already we have been really encouraged by the reaction of the loyal Crerar guests we have contacted to ask that their bookings get moved to free up the availability we need (date can only be confirmed after lock down lifted). Every single one has said yes and more - many turning their deposit into a donation to help the big thank you. Of course for those that do this we will make sure in every room given through that kindness there’s a wee something extra, and a letter of gratitude is left for the NHS/Carer hero on behalf of the Crerar guest that has gifted it.” As well as Scottish Hospitality for Heroes the group is also promoting ‘Local Hospitality for Hereos’ and is encouraging local hospitality businesses and local people to get behind this big thank you. Crerar Hotel employees and guests can also nominate a local hero who has supported their communities during the crisis, the vouchers . The nominations can be sent to localheroes@crerarhotels.com Chris Wayne-Wills, says “This is everyone’s business and a chance for everyone to say thank you, when we welcome these frontline heroes we’d like to have help from our local partners and we are talking with them right now. Tickets to distilleries, wildlife boat trips, a fiddler for entertainment, access to museums, a cask of beer behind the bar from a local brewery or whatever a local can give would be great. Everybody can make this their special thank you.” “Local people can express their thanks too. We really want the hotels to be exclusively for NHS and carers - these people will need our care as we needed and still need theirs. So, coming in to the hotel to say thanks and buy a round of drinks is maybe ill advised even if 6 • HOTELSCOTLAND
well intended. We believe if that’s what a local wants to do then do it “virtually” and give the folk we are saying thank you to space to relax and be normal. Let us do it for you - buy a round, a steak, a bottle of wine or whatever you like. Do it in advance and we will make sure it’s delivered as your thank you.” The company is also issuing NHS Hero Gift Vouchers. The public will be able to express thanks to any NHS workers by purchasing monetary gift vouchers, with Crerar Hotels adding half as much again to the value! “The Crerar Trust have also gifted £25,000 towards a “Help for Local Heroes” scheme. The scheme is to support a Crerar Hotels gift voucher issue to local heroes; key workers such as shop workers, emergency response personnel, refuse collectors who have contributed during the crisis. Paddy Crerar CBE, Chairman, Crerar Hotels commented, “These have been exceptionally challenging times, terrifying in fact and we have a way to go yet. Day in and day out the NHS folk and care workers have stepped up and if we ordinary folk stuck at home have been fearful how must it be for those that had no choice. We should all be rightly proud of our NHS workers, the carers and all of those who have done all they can despite the grave risks to themselves.“ “These folk must be exhausted, tired beyond belief and most likely also tired of talking about it. If we can give them a night or two of safe respite and a return to a form of normal hopefully that’s a good thing for them. We are just hoteliers, all we can do is show our thanks through what we do best and of course we wish it could be more.” He continues, “At the start of the crisis one of our supply partners (Billy McNeill, YourTex) said to me, “we are all going to have to look after each other” - how right he’s been and we are determined to continue to live that way. We have some great business partners including Belhaven Brewery, De Burgh Wine Merchants, Scottish beef from Campbell Brothers, game from Braehead Foods and many more who without being asked, sought to help us where they can with this big thank you. That’s going to be remembered.” “The NHS and care workers were ready to look after all of us and we will be ready to open our doors to say thank you in whatever way we can as soon as it’s safe to do so. It’s been a hellish time for all and every business has taken a serious hit, we are no different and yet it seems nothing by comparison to the personal sacrifice already given by NHS and care workers. I’m determined that we give recognition to this massive effort made by these good people at our time of need. It’s little what we can do and I hope other hospitality businesses will join us to show the world just how good the spirit of Scotland really is. At Crerar that’s what we will do, through authentic hospitality and this expression of gratitude to our NHS and Care heroes” “If the First Minister says we must stay shut we will - no protest. We must all do what we can to protect the nation’s health. If it’s impossible through a continued lock down to say thank you this summer, then we will do it spring or whenever it’s safe to do so.” Chris concludes, “Crerar Hotels hope that many other hospitality companies will join this initiative so as many NHS heroes as possible can be thanked and are in ongoing discussions with suppliers and other leading hospitality companies to become involved and hopefully make the NHS & Carer big celebration weekend an industry and Scottish wide event as a festival of gratitude.”
NEWS
UKHOSPITALITY SURVEY HIGHLIGHTS FLAWS IN SUPPORT TO HOSPITALITY BUSIESSES DURING .COVID-19 UKHospitality has revealed the results of the first comprehensive survey of the hospitality sector during the COVID-19 pandemic, in which businesses were asked about their experiences of accessing loans, insurance claims, the speed of grant payments and workforce issues. The results have highlighted flaws in the level of support provided to businesses during the crisis. Around half (48%) of businesses have applied for loans, but the majority of those receiving a response (57%) have had their bids turned down. Government-imposed State Aid rules account for over a quarter (26%) of rejections, alongside banks telling business to exhaust their own capital first (28%). Nearly three-quarters (74%) of businesses have claimed, or intend to claim, for business interruption insurance. However, their chances of success appear limited: alarmingly, fewer than 1% of businesses that have claimed have received pay-outs. Only around a quarter of eligible businesses had received hospitality grants, which falls significantly short of
Government estimates. UKHospitality has been urging for these loans to be expedited and extended to more businesses. In terms of workforce, redundancies have been kept to a minimum (2%), with
the majority of businesses furloughing staff, accounting for 84% of sector employees. This demonstrates the huge success of the Government’s job retention scheme, and the need for it to be extended as the recovery begins. Kate Nicholls, (left) UKHospitality CEO, commented:, “These findings lay bare the extra work that needs to be done
by governments, banks and landlords to make sure as many businesses as possible can survive this crisis. Hospitality was the first hit, the hardest hit and will suffer for the longest, and Government support needs to reflect these facts. Hospitality businesses will be key to recovery as prolific employers, major tax contributors, and hubs for social interaction. “Governments across the UK have provided unprecedented support to assist hospitality through this crisis, and that is extremely welcome. Yet, we are in this for the long haul. Everyone is rightly looking to how the economy and the industry restarts in a way that avoids a return of this horrific pandemic. Before we get to recovery, we need to make sure that the support measures already announced are getting through to business. “Loans must be fast-tracked with minimal restrictions, grants must flow to all businesses that need them regardless of size, and the job retention scheme must be amended to reflect actual earnings.”
HOTELSCOTLAND • 7
ON THE FOLLOWING PAGES HOSPITALITY OWNERS AND OPERATORS SHARE THEIR OWN EXPERIENCES OF COVID-19 AND THEIR VIEWS ON HOW IT HAS BEEN HANDLED BY GOVERNMENT AND WHAT IT MEANS FOR THE FUTURE OF HOSPITALITY IN SCOTLAND.
MY OWN PERSPECTIVE BY NICOLA TAYLOR, CHIEF EXECUTIVE , CHARDON HOTELS
I
am writing this from our own perspective as a family business owning and operating 6 hotels in Scotland under a global franchise with IHG – Holiday Inn Glasgow Theatreland, Holiday Inn Expresses; Glasgow Theatreland, Edinburgh Royal Mile, Edinburgh Airport, Perth and Dunfermline. “Our journey started a little earlier than many when I arrived in Marseille at an IHG European Owners meeting on Monday 9 March. I knew the coronavirus was becoming a concern and I’d even considered cancelling my trip. But nothing prepared me for hearing firsthand an emotional Italian owner’s devastating experience. No guests and zero income with no ability to pay their staff or anyone else. It’s something I will never forget, a bit like “where you were on 9/11?”. Then hearing IHG had shut down over 200 hotels in China, WOW I realised this was going to be bad.
I was meant to travel from Marseille to London for meetings later that week. However, given what I’d heard, I flew straight back to Glasgow to brief our senior team and GM’s. I think that was one of my hardest trips home as I tried to figure out how to break the news, how to be factual, honest and unemotional. Everyone’s reaction was very different and that’s what makes us human. We all start the journey at a different time, we all accept change at a different speed, and we always need to try to remember that. (It will be the same as we eventually come out of this.) In some ways, we were lucky to have a couple of weeks before lockdown to pull together some sort of plan and make sure our focus was on keeping as many people in jobs as we could, especially to get the business back up and running once this was over. We knew it’d be a few months of disruption BUT we
remained focussed on coming out the other side and ensuring we had a business to give our great teams back their jobs. I don’t think I slept much that week, or for the rest of the month. From 9th to 31st March I made 1,712 outgoing calls from my mobile phone. Who to? To be honest, I can’t remember but it was probably anyone who would listen to me about helping our industry! If I couldn’t speak to them, I emailed or texted them. To think one of the best loved industries was being torn apart was very difficult to get my head around. This was like 9/11, SARS, the Ash Cloud, the Snow and a Tsunami all rolled into one perfect storm. I know hospitality has historically been of little interest to politicians and local government. However, when they saw the sheer scale of the job losses, I think even they were shocked when they realised the number of jobs and supply chains our industry supports. Ours is a complicated business that people outside the industry just don’t understand. In Scotland, I think the trade bodies did an amazing job of working together to try to help all their members. They ensured the message to Government was consistent from all sides and wouldn’t be lost in a lot of unnecessary noise and detail we operators can get into. Personally, and like most owners, we were looking into a big black hole with no idea where the bottom was (we still don’t!) To try to get ahead of the curve, we took the difficult decisions to lay off staff with under 2 years’ service and put the rest of our teams on consultation. We took these steps a full week before the word ‘furlough’ became part of the country’s vocabulary. For me, the UK Government were late coming out with this offer, however when it happened, it did allow us to furlough everyone - even those we’d initially let go. Ironically, I’m sure some of the draconian measures taken by people like Richard Branson, Gordon Ramsay and Tim Martin at Wetherspoon’s actually gave the UK workforce a better furlough % offer than any other European country. It is very difficult coming in and out of a recession to change people’s mindset on how good or bad the situation is, and this happened at a speed many could not imagine. Shutting a hotel when the onsite hotel team are confirming it is full of bookings is difficult for everyone involved. And to be honest I already knew from my European counterparts that most guests who had booked would fail to turn up. We also needed backup security staff to go into our closed hotels as we knew looting could become an issue and if any of our team became ill, we needed others to slot in. I think the Police have done an amazing job as our “in-
hotel teams” confirm they have never felt safer in Glasgow or Edinburgh. I am very lucky to have a small senior team who got behind everything, so we ran the fixed costs numbers quickly to go to the bank. This was maybe a bit early as neither the brand nor Booking.com had started their money back guarantee with our money for prepaid, non-transferable reservations. We even had the pleasure of picking up the credit card fee for the debit and credit, costing us more money. I’m not saying it isn’t the right thing to do BUT it blew a £750k + hole in our cashflows. If only the UK had copied Italy and France where the Government rushed in legislation for a voucher scheme to allow guests to move bookings, the cash WOULDN’T have been lost from the
“I think the restaurants and bars along with staycations at hotels in the country and seaside will come out of this much quicker than city centre hotels. I try to tell myself otherwise, hoping there will be lots of people who want a party in the city, eat out, go to the movies and get their lives back to ‘normal’ quickly.” hotel industry. Losing the property rates bill for a year was a godsend as that released about £1m from our fixed costs. We own rather than rent the properties, so we managed to get a capital repayment holiday. As we’d just refinanced, this has now been added to the next 19 years of our capital repayment schedule. To be honest though I have no idea how some of the large operators who lease or have big ground rents will make these payments with no income? Hotel owners are traditionally asset rich and cash poor. They don’t have large sums of money sitting in a bank account for a ‘rainy day’. They employ a lot of people and are continuously re-investing in their properties, just like anyone owning a large house. It needs constant maintenance and there are large capital and interest mortgage payments to make. (We are in fact in the middle of a refurbishment in one of our Glasgow hotels and were trying to get it ready for what we hoped would be a busy summer!) In terms of funding the business through this crisis, initially the options were a commercial
loan or overdraft then latterly government funded loans. RBS, with whom my family have banked with since 1972, have been great but rightly keep reminding us these are loans we do need to pay back. I refuse to write down what this has cost us BUT I can’t stop my head running the calculation especially around 3am each morning (any tips on how to stop this would be most welcome) But let’s be honest, this is affecting everyone in our industry. It doesn’t matter if you’re the coffee shop owner with 3 staff or the hotel company that employs 000s, if you have no income, you have no ability to make the payroll, fixed costs, rent and certainly not loan repayments! We’ve also learned a lot about Insurance companies too – they’ve done an amazing job in avoiding pay-outs. One must question why do we actually pay insurance? Whilst I believe the government should be putting pressure on these companies, I also don’t believe infecting another industry is the answer as long as the government continues to support us, but NOT solely with loans the majority can’t ever repay. And that’s it in a nutshell for this industry, ‘how will we ever pay it all back?’ Personally, I think I’ll be working till I’m 90 BUT quite honestly having spent 6 weeks at home I will happily work till I drop. I really miss the people and that is something everyone in hospitality will be struggling with, because it is a people business. Moving forward we still need answers on aspects of furlough. We also need more support coming out of this.The deferred VAT that needs paid in Q1:21 might be too much of an ask and we may need that deferred again. I think the restaurants and bars along with staycations at hotels in the country and seaside will come out of this much quicker than city centre hotels. I try to tell myself otherwise, hoping there will be lots of people who want a party in the city, eat out, go to the movies and get their lives back to ‘normal”’quickly. If the government just ends furlough then we go back to pre-furlough days and mass redundancies. With a forecast of less than 40% hotel occupancy till the end of the year and business not expected to be ‘normal’ until the summer of 2021 we can’t just keep on adding to the mounting debt as there will be little point as many will just bust. We probably need another year’s property rates holiday and a continuation of furlough for those in travel and tourism. Otherwise, there was no point in introducing furlough to keep people in jobs. in the first place. As I look back and try to reflect on what we did well and maybe not so well I remind myself; we make the decision based on the facts we have at the precise time and I haven’t spoken to any business owner that isn’t and wasn’t trying to do the best for their staff because, without them, we won’t have a hospitality industry to re-open.” HOTELSCOTLAND • 9
UNCHARTERED TERRITORY W BY ANGELA VICKERS, CEO, APEX HOTELS
e’re always planned for new openings at Apex, never closures so like everything else these days it’s all unchartered territory. Priorities have been getting our head around furlough and other business reliefs as well as keeping in touch with our staff and customers. We are grateful for the reliefs that have become available, particularly for the Job Retention Scheme which clearly enabled us to keep staff on the payroll. However, as we go through the phases of survival we are now asking questions around how long will the scheme continue and what happens when we re-open our doors and the world won’t be the same as we left it. That is our major concern currently, shifting from 90% occupancy levels to 30%, if we are lucky. Recovery won’t be overnight and predictions are that it will take at least 18months to get back to sustainable levels. Lack of clarity on lockdown exit strategy, extension of financial support and easing
10 • HOTELSCOTLAND
of travel restrictions makes it extremely difficult to scenario plan for the future. That said, there is comfort in the fact that we are all in this together, other travel and tourism industries are experiencing similar pain and ultimately the situation has to improve at some point. So more positively looking forward we need to find the resilience to start over again and look for innovative new ways of operating and diversifying revenue streams to make the industry great again. We are fortunate to be in a position to press the reset button in a country which offers the perfect setting for recuperation, adventure, sightseeing, culture and culinary pleasure. We need to harness the opportunity to embrace the staycationer and then, when the time is right, welcome back international visitors. This is without doubt a transitionary period of convalesce where we need to nurse our businesses back to full health and in doing so re-invent sustainable and more flexible operating models that can more adeptly adjust to modern day crisis prone scenarios.”
IN IT TOGETHER I
t’s difficult to imagine that just a few weeks ago, very few people were talking about Covid19 and hardly anyone had heard the term furlough. And yet here we are in mid-April in the midst of the greatest crisis to hit our industry and our wellbeing in living memory. The need to learn fast and adapt is something I’m sure we can all relate to. Of our 2 hotels in Dundee – we had to close Hotel Indigo. Our Staybridge Suite was more easily able to meet government guidelines and we already had guests with no alternative accommodation – so we kept Staybridge open and it has now become a hub for key workers. Both of our hotels are owned privately and the immediate stoppage and reductions in cash flow offered extreme challenges. The government incentives offered to industry are by necessity not ‘simple’ to obtain and with future business being completely uncertain, there have been many tough decisions being made. Furloughing the majority of our staff has been difficult but completely necessary to safeguard them and the future of the business. We are currently dealing with the furlough process which in itself is a challenge. I use an accounting firm and have a great Financial
BY BILL BURNETT, CYCAS HOSPITALITY
Controller, but this process is difficult to say the least. I really do expect some operators to really struggle with using this lifeline. Ideally furlough would have allowed us to retain a wider spectrum of key team members on a ‘part-time’ basis, but the guidelines were specific, and this was not allowed. So, we’ve reduced to a minimum operational team. Aid in relation to Business Rates, and VAT returns were in effect much easier to navigate and these are readily welcomed. They will in themselves though not replace immediate cash flow – essential for supplier payments and current staffing needs. And with the uncertainty of the future trading climate, the low rate business loans on offer are still a risk that many businesses may not be willing to undertake. There is no doubt that our economy and our industry globally has many years of recovery ahead of it. Operationally, we’re having to adapt what we do in order to safeguard my team and my guests. We’ve become minimalist. In many ways, we’ve reduced service levels through necessity – and our guests have been absolutely magnificent. There really has been a genuine sense of ‘we’re all in this together’ As the only major hotel in Dundee to remain open, we are genuinely offering refuge for key workers
only – we’re very specific at check-in. Reasons for stay have to be checked and supported by documentation by the employer. For those staying, they are genuinely grateful that we’ve been here for them. The team that has stayed on to look after the business are going above and beyond. I’ve named them as SuperHeroes. Each day they make the day special for our guests – and although we’ve reduced some services, we’ve also added some genuine daily surprises – little parcels of kindness outside every guest suite – a token of thought, sometimes a gift, or a joke, a beverage - a connection. Many of our guests are alone and away from their own family. In some ways, although we are all respecting our distances, we’ve gotten even closer to our guests. Eventually I am sure that much good will come from all of this. For the time being we are mindful of those who are dealing with loss and we know that many of us will be touched by this. We respect the real heroes of the NHS and the service they are delivering ahead of personal safety. In contrast that really makes the challenges we face ourselves seem all the more manageable. Hospitality will survive this crisis and will in time be stronger than before, because every hotel has its own Superheroes.” HOTELSCOTLAND • 11
DAVID COLLINS, CO-FOUNDER AND CHIEF OPERATING OFFICER FOR THE GREAT NATIONAL GROUP, SUGGESTS THAT STATE-SPONSORED DEBT FORGIVENESS MAY BE THE ‘SILVER BULLET’ THAT THE TOURISM INDUSTRY NEEDS AS IT LOOKS TO RE-EMERGE FROM COVID-19.
C
19 has brought about lots of restrictions, most are worthy and warranted. The protection of front-line staff is unquestionably, undoubtedly critical and welcome. Equally citizens now, more than ever before, need to actively ensure personal restraint for their own safety and that of others. This is an unseen enemy which knows no boundaries although it does need to be said that it may perhaps have been enabled by the serial under-investment in public health to the point that it seems governments are now forced to bid for knock-off, sub-standard PPE from the very country that is the origin of this viral pandemic. Go figure. Leaving all that aside, what’s happening now on the world stage is concerning and will only compound the challenges facing the tourism industry. Once united nations are now beginning to adopt unilateralist, selfprotectionist measures, literally becoming silos in survival mode. Case in point, the European Union’s 60 year-old-plus history has been undermined in less than 6 weeks as countries start to do solo runs on fiscal, social and economic policy. Unchecked this could pass a tipping point where an emotional tsunami – fuelled by wide-scale bereavement, enforced self-isolation and raging uncertainty – will overcome even the most resolute to the point that society itself might collapse. This is not unthinkable by the way. And if you think
it is, who would have thought that the entire world could be brought to its knees within a matter of weeks by a bat. Or a pangolin. Or whatever species of animal/mammal it was. The mind boggles. To be kind, there is no precedent for the scale of what is being experienced globally therefore is it fair to focus on inefficiencies in preparedness? Probably not. It is instead the response that communities, institutions, governments deploy that provides the context for how this calamity is being dealt with. The tourism industry has largely stepped up to the mark. Pubs have closed. Restaurants have shut. Hotels lie vacant. Obviously this has not been entirely selfimposed: state lock-downs and enforcement rules have made it impossible to trade what is essentially ‘social’ business. What is marked however is that there have been few if any operators that have attempted to defy these bans with a universal acceptance and compliance obvious from the get-go. This despite the fact that this could prove terminal. And in some cases has already done so. As attention turns to ‘what next’ in terms of how do we re-emerge the economy, there’s talk now that the tourism industry will be among the last, if not the last, sector to be permitted to re-open for business .. so basically it looks like we’re first to close and the last to open. And whereas again there may be a general acceptance for this – the
“What will certainly emerge will be a new model for the tourism business, for how we operate, how we engage with clients, how we price, etc.. It will however be lessened as a challenge perhaps as we’re all effectively in the same boat including each of our competitors and customers so there may be more space and tolerance than we might think for adapting to this new normal.”
practicalities are in truth hugely challenging – the stoic-ness shown by tourism operators to date should not be taken for granted. Nor should the sheer number of people employed in the industry be forgotten .. 250k in Ireland, nearly 4m in the UK and 300m+ globally. Many other sectors will be taking the initiative so as to at least keep them at the forefront of policy-makers’ minds – after all if you’re not at the table, you’re on the menu – so it falls to ourselves and all our colleagues throughout the tourism industry, to actively engage in figuring out a blueprint for going forward. Leadership from trade associations and lobby groups will be key here but more importantly, I would suggest leadership from amongst operators on the ground. As to a solution for helping the tourism industry to re-emerge from this calamity, grants and loan holidays in themselves while welcome will simply not cut it such is the scale of the challenge facing our industry. Lateral thinking is what’s needed here so for example is it not reasonable to suggest some level of debt forgiveness as regards rates, water charges, VAT and corporation tax, much in the same way in the last crash debt was taken off banks’ balance sheets to allow them space to regroup and stabilise for recovery? Similarly business, and in particular small to medium sized businesses such as is typical in tourism, should likewise be provided with this opportunity. Unprecedented? Well, sort of but not really. Again refer to my point above about
the banks. But then again we’re now in unprecedented times and uncharted territory, and as such the old rules simply don’t apply. We need new rules for a new normal to allow us as an industry to reboot whilst continuing to enable the controlled management of this pandemic which has beset us all. ‘Moral hazard’ will likely be deployed to argue against state-sponsored debt forgiveness as it could ‘encourage bad behaviour’, etc.. And yes, while there may be a few operators that would take advantage of such a write-off or even a write-down, the vast, vast majority of operators are honest, hard-working citizens concerned about their livelihood and the livelihood of their employees who have done the right thing, and now turn to the State to likewise do the right thing. What is therefore needed is an extension of the ‘Social Contract’ deployed by Governments and Citizens who combined symbiotically to respond to C19 and now need to do this again to create an accelerated resurgence. Society will be the ultimate winner, the prize being stability, inclusivity and community .. and a fasttracked recovery. In terms of how this might be structured, there are folks on a much higher pay-grade than myself on this issue but it is surely within the gift of governments to for example create a C19-related Special Purpose Vehicle or SPV whereby the associated costs of dealing with the
pandemic plus this proposed write-off, are bundled together and capitalised or written off over 100 years? As a colleague of mine pointed out, this money is not owed to some divine power that has to be repaid under punitive terms. And as to managing C19, it will be with us it appears for a while to come so again the hotel industry has a responsibility here in adapting to rolling lock-downs and restrictions on operations: for example, implementing social distancing will leave some restaurants half-empty. But that said, at least they’re half-full .. What will certainly emerge will be a new model for the tourism business, for how we operate, how we engage with clients, how we price, etc.. It will however be lessened as a challenge perhaps as we’re all effectively in the same boat including each of our competitors and customers so there may be more space and tolerance than we might think for adapting to this new normal. Critical to this however will be equality and transparency in terms of enabling practical solutions for business as there’s now a heightened sensitivity to and expectation for the State and its bodies to do – and be seen to be doing – the right thing. This is in fact a huge, ‘once-ina-generation’ opportunity to recalibrate the global economy for the better, to address systemic dysfunction and to enable sustainability. As they say, never waste a good crisis..”
COMING OUT RUNNING BY STEVE GRAHAM, CHAIRMAN, MANORVIEW
T
o be honest, the minute Boris Johnson came out and said to avoid pubs and restaurants, I thought about closing down. This was about a week before the actual shutdown. On Monday March 16 I told my management team what I was thinking, but not everyone in the business knew. I saw other countries closing down and I thought it was inevitable. In some respects it was an easy decision to make because it had been made for us. This was before the furlough deal was revealed. But we were getting lots of calls from concerned brides and grooms and people wanting to freeze their gym memberships and such like making it difficult to operate because we didn’t know what was coming. Although we could have kept open over the next weekend we didn’t feel it was the right thing to do. We had a team of 500 people who could have picked up coronavirus, and so on the Tuesday we announced we were closing and that we would be keeping all the team on, but at 50% of their wages, for as long as it took. I think it was the right thing to do, anything else was just being in denial of what was going to come. Maybe that is easy for me to say, because that is the way I think. Once I made the decision I felt relief. I felt like we had taken back the power and at the same time, it allowed me to offer the NHS free bedrooms. That quick decision worked for us. We were able to close in a practical manner. The units were cleaned and perishable stock given away to charities and the right places – and that helped. When the actual shutdown came we were actually very well prepared. 14 • HOTELSCOTLAND
The following Friday the government announced the furlough scheme, a year’s holiday from rates, and Government backed loans and I could see that there would be more support coming from the Government which was a real relief based on the decision we had made. We spoke to our lenders and suppliers. Then we spent days and weeks going through cashflow projections, looking at where we would be in 3 months, 6 months 12 months – and producing all the information we needed for the bank in a thorough way which ultimately allowed them to give us support. The CBIL government loan didn’t work for us because of the five-year profile thereafter. We had to look at it in longer-term aspect and Barclays understood this and had approved our increased facility by Easter Friday. The bank could also see that we are still growing and expanding our business, and certainly, once we get back to normal that is what we will continue to do. I think the Government has done a reasonable job for businesses in the circumstances. They have been reacting to what has been happening and the Chancellor comes across very well. He has an eye on the economy and with furlough, is trying to keep everyone with a wage while at the same time trying to ensure the health and wellbeing of the country. Coming out the other side the Government will have to continue with support – a year won’t be enough for some people. We think it will be a full year before we get back to the profits we were achieving at the year-end 2019.
We are lucky because a lot of our business is postponed rather than cancelled. Hospitality was the first to close and we will be last to re-open. We are all in the same predicament and we are all facing the same challenges, but there will be opportunities – certainly, I couldn’t have got more bank support without the crisis. It has changed the bank’s outlook. Before they were lending against leverage now it is against cash flow – cash flow for debt servicing. For a company like us that is a positive, because we want to keep expanding. I love change - and everything is about to change. Our best period of growth was after the last crisis. The hard work and effort that we have put into this company over the last 10 years has given us the safety net that we need now. We all will come out at the same time and same pace as each other. It will be no better for one company than another. If we all think like that and move forward it will go back to normal one day – although there will be changes. I certainly believe there will be opportunities too. Since we got the funding we have started the process of bringing our suppliers up to date – everyone has to survive. We are also keeping our team up to date. We have an internal app and we post every day. We ask everyone if they have any questions and on a Friday I answer them in a Q&A session online. We are using this time to do some maintenance around our sites which we are usually struggling to do because we are trading. We plan to get as much in place as possible to
keep our standards up. When we do open we plan to come out running. We also still have staff working in units helping look after NHS staff. It has been one of the highlights of this shutdown that we have been able to offer this accommodation. I didn’t do it realising how good it would feel. It was an easy decision at the time and the response we have had has been amazing. Some of the NHS staff were sleeping in their cars to selfisolate from family. They couldn’t believe our gesture, we weren’t looking for anything from it, but when you can see that you are making a difference it also gives you a level of comfort and reassurance too. The comforting thing is that we are all in this together. People say hospitality will be very challenging when we do go back. But I have never known the business to be anything but challenging. I, for one, am always thinking about how to drive profit. I do think it will take time to go back to normality. I think people will appreciate eating and drinking and having a good time even more. We will have a busy period from this although people may be a bit cautious to begin with. I have also got four units leased out and we have given them a three-month rent-free period. We passed the support onto our tenants that we were getting. After all, we have to think about coming out the other side and I for one believe that something good always comes from something bad. I refuse to think negatively. . HOTELSCOTLAND • 15
GOOD PLANNING AND DECISION MAKING REQUIRED
BY TANJA LISTER, KYLESKU HOTEL, SUTHERLAND
“Many of our
communities are understandably concerned that once tourism and travel re-starts, that with this comes a substantial risk of transmission.”
16 • HOTELSCOTLAND
W
e closed the hotel on the morning of the 21st March, in line with lockdown announcements. As we are a seasonal business, we were just starting to get going for the season. We had opened on the 7th of Feb, but this had been a tricky month due to very poor weather and ongoing flooding across the UK. For most businesses in the North Highlands, the timing is awful as it falls right at the end of the winter closure period- and after any refurbishment/project costs have been committed. Coffers are empty. Furthermore, the main profits for the year are derived from trade between April and September, so the longer the lockdown continues, the greater the impact for the whole yearpotentially meaning that businesses will need to survive with little or no profit until Easter 2021. Given our location we are not in a position to recruit locally, and so need to make living provision for all our team- albeit some choose to settle here longer term. When we shut last month, we had a team of 23 FTE working with us, 14 of whom are currently living on site at the hotel- all locked down together. In the main, the furlough scheme is very welcome- our team are our biggest asset and we very much look forward to working with them when we re-open. Indeed, the hotel will be very reliant upon them in the early stages of re-opening and there is a risk that the longer the lockdown progresses, the more our live-in team will be suffering from cabin fever and choose to move on once restrictions are lifted. Particularly if other countries etc lift their restrictions and are recruiting for seasonal workers. However, we do have 5 new members of the team who joined us in March, in readiness for the Easter uplift. These team members are not eligible for furlough, and yet, these job offers were made many months ago. Some are from EU member countries and it is doubtful that they would even have recourse to Universal Credit. Given that many businesses were building up to Easter, this must be an issue that is reflected across the country. These employees will be needed
to get businesses back on their feet. We have also applied for the £25,000 government grant- however, despite applying for this the day it was launched, we have not received anything. I do have a concern that cash will run out if this hasn’t arrived by the end of the month, especially as we will need to pay our team before claiming back the furlough from the government. Whilst it is helpful to defer VAT payments, we will have quite a large outstanding tax bill later in 2020 comprising of accrued VAT, Corporation Tax from 2019 and Self Assessment. Whilst we had reserves to enable these bills to be paid they will have been used up to keep the business afloat now. Ultimately though, we are kicking the can down the road and I would imagine that for most businesses it would be a great help if all tax bills could be deferred for a further 6-12 months. Especially as we will have lost a large part of the season- if not all. Our small communities will have been almost completely shielded from the virus, and this will bring a further dilemma. Many of our communities are understandably concerned that once tourism and travel re-starts, that with this comes a substantial risk of transmission. This was already true before the lockdown happened. In some instances, this concern spills over into rather aggressive and unwelcoming behaviour and it would be great to see local councils, MSPs, tourism bodies engaging with our communities to ensure we remain famous for our ‘Highland Welcome’ and that the concern doesn’t alienate our guests just as our businesses are getting back their feet. Finally, I would very much welcome discussion now about suitable exit strategies. Whilst almost all would agree that it is too early to ease restrictions now, this should not preclude serious conversations about shaping those exit strategies. Businesses need confidence in government, and also time to plan. The fitness of our businesses and speed of recovery will be very much dependant upon good planning and good decision making now. We have all witnessed the impacts of poor preparation when it comes to testing and PPE. ”
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BY SUSAN STUART THE FOUR SEASONS, ST FILLANS
A
We re-opened in time for Valentines but even then we could feel the effects of Covid-19. Soon after I met with my staff and discussed going onto short working hours. At the time I am sure they thought I was being a bit melodramatic but the decision was the right one to make. 2 March – I could see that the public had stopped booking hotels and going out. So when I wrote my car off it forced me to rethink how the following few weeks were to function. We were still on winter trading hours so I stocked up on staff meals. Then the government started to react and over the space of a few days, we were an industry being shut down but not. There was direction for restaurants etc but not hotels On Monday 16th March my forward diary for March and much of April cancelled - every call, every email was a cancellation - I had been there with Scottish Water 2 years previously but you are still in the hospitality business to be taking bookings and be a host, not to be cancelling. It was the same on the Tuesday. This time my staff heard me speaking to guests and you could cut the atmosphere with a knife because they knew it was serious then. It was two very emotionally draining days. I had 3 staff meetings in 1 week, the last of which was to put staff on furlough. The tone of government was getting increasingly serious about staying at home and I half expected a curfew. Finn (my dog) hadn’t been himself over this period and I had a suspicion that he had eaten something. On 23rd I called the vet with my thought that he had perhaps eaten a t-shirt “Best to X-ray him and based on his history we may need to operate straight away as we are going onto emergency treatment only from tomorrow.” Lockdown became increasingly intense. We have a village store in the village and two hotels. We closed and I hope that this will be through to late May, opening then in some form. Hotels in Lochearnhead and Comrie are closed too. Our neighbouring hotel, The Achray continues to trade and is doing take-aways and deliveries plus a charitable isolation menu for the area. I have live in staff so it has been a novelty for them initially but they are getting bored. I may 18 • HOTELSCOTLAND
put them back to work occasionally with the 3 on 1 off furloughing rules – I am not sure. After the initial madness, it was a case of what direction do we turn to, to get information. Information was changing by the hour with a lot of top line strategy/theory being distributed. Things started to settle and we learned that grants were going to be distributed by councils. This generated so much “noise” that it was hard to filter through it all. Everyone was trying to be helpful and it meant that you read 20 pages of roughly the same information. This support has run a little late but considering nearly every organisation has had to furlough staff and react to an unknown set of circumstances, I think the delivery by the government has been pretty good. They promised hospitality grants prior to Easter and that is when I got mine. Business rates relief has been most welcome and prompt – a result of simply cancelling a D/D. The furloughing is now coming on-line but is a little more complex to process. A big decision I made was to pay my staff their furloughed wage in March out of my own pocket way in advance of the government pay out. My belief is that staff are on minimum wage so every penny for them counts and they are my responsibility. I hope I don’t have to wait too long for the repayment. I am still a relatively new business so I still have close relations with my bank (Natwest) and accountants (JCCA). Both have been worth every penny in recent weeks as they are intelligence gathering and have been a fountain of knowledge. I ultimately decided to stick to the JCCA “Covid 19 Hub” to get up to date information. They screen everything that becomes available and then post a sensible summary. It was JCCA who advised me to apply for CIBLS, now that it is 100% government funded. Having a close relationship with my bank has also meant that it was easy to speak to them about support until grants kick in. The prospect of calling my bank without a relationship and asking for financial support would have been massively daunting. Now bookings for April/May are being postponed. People are prepared to think about 2021 so hopefully we can look forward, but ultimately we are lucky. We have beautiful countryside that we can enjoy from our windows. ”
MY VIEW
WPOINT... “I am still a relatively new business so I still have close relations with my bank (Natwest) and accountants (JCCA). Both have been worth every penny in recent weeks as they are intelligence gathering and have been a fountain of knowledge.”
HOTELSCOTLAND • 19
MODELS OR ‘DARK KITCHENS’ POST LOCKDOWN? E IF HOTEL RESTAURANTS AND CAFÉS DO RE-OPEN IN JUNE WITH SOCIAL DISTANCING MEASURES THE SECTOR WILL HAVE TO CONSIDER A NEW APPROACH TO DINING EXPERIENCES.
P Business in Hospitality, has hosted a series of industry Zoom discussions across the country this week with top hospitality leaders to debate a number of key topics amidst the impact of the coronavirus lockdown on the sector. With many foodservice companies and hotels adapting their business models to stay afloat and support communities, it is clear that change is happening everywhere and at great pace. It is also clear that more is to come and that businesses are already looking at how future restrictions on restaurants and hotels will affect operational models moving forward.
EP’s remote industry debates are continuing to run on a regular basis in a bid to keep conversations flowing within the sector, to consider how life and consumer behaviours might change post lockdown and to share thoughts and ideas with likeminded individuals. Discussions have already shown a number of emerging proposals around how working patterns, dining environments and services may change with regard to the operations of hotels and restaurants. Chris Sheppardson, CEO at EP Business in Hospitality explained, “From our sessions, there seems to be two schools of thought on the economy. There are those who believe the economy will face a long, hard road to recovery and those who believe that it will simply bounce back. In terms of the hotels sector, many sit almost between 20 • HOTELSCOTLAND
this two schools and believe that the sector will return to some kind of normality as of Q2 in 2021. Although nothing is clear-cut, there are a number of discussions emerging in terms of how hotels and restaurants will continue to serve guests post lockdown, if social distancing measures are still in place. Certainly the fall in those staying in hotels may prompt managers to look at other models such as delivered-in services to accommodate in-room dining.” It has been suggested in the past that delivered-in food from suppliers such as Deliveroo and Just Eat could actually replace hotel room service in the future, but has the social distancing made this a greater more attractive possibility? In addition, the idea of hotels having ‘dark kitchens’ within their premises for delivered-in services to operate from, is one that has resonated with many hoteliers prior to lockdown, simply because it provides a differentiator; although now, it may be just the answer many hotels are looking for?” Sheppardson continued: “One thing is for sure, hospitality businesses need to make contact with each other both from a wellbeing perspective, as a community, to talk and also to debate and make contingency plans for the future. It’s true that we are all in this together so it is important that we listen to the voices of others who face the same situation and worries for the future and attempt to offer some positivity during what are dark times for many.
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HOSPITALITY TIPS FOR MANAGING CURRENT TRADE AND PREPARING TO BOUNCE BACK IN THE FUTURE
A
s hospitality operators continue to look for solutions to manage and protect their business through the downturn caused by the impact of Covid-19, Katy Hamilton of Access Hospitality offers some practical advice on managing current trade and using time and technology to plan for an uncertain future. First and foremost, though, operators should follow advice from the Government and the NHS to protect the health, safety and welfare of staff and customers and obtain the latest information on financial and other support. www.gov.uk/government/publications/guidanceto-employers-and-businesses-about-covid-19 www.nhs.uk/conditions/coronavirus-covid-19/ 1. Where businesses can remain open, for example those that have a strong delivery trade, make sure that staff are aware of shift availability and keep things as flexible as possible. Remember that their cashflow will be impacted when shifts reduce, so use appropriate variable, but compliant, methods to pay staff after shifts have been completed rather than necessarily having to wait until the end of week or month payroll 2. Simplify your menu – either now, or when you reopen – to reduce the number of dishes available, minimise stock holding and cut costs. There is comprehensive F&B technology available, which can be used to quickly implement revised menu planning, costing, ordering of ingredients and allergen information to offer a more practical offer. Same great quality, just a reduced choice, will help your cashflow and will be welcomed by customers if it means you can keep the operation open 3. Be flexible in response to customer’s reluctance to come out and mix in large groups. Can you offer online ordering for takeaway, for example, or offer a delivery service – particularly for those who may be self-isolating or reducing social interaction? If you have a private dining room, make sure that everyone knows about it as there will still be people who want to mix with friends in as controlled an environment as possible, whilst they’re still able to do so, and the privacy of private dining may give them the reassurance
they need to go ahead 4. If you run a community venue, think about your neighbourhood – we know that hospitality venues are at the heart of so many communities, so consider if there is anything you can do on a wider scale. Keep in touch with your regulars, particularly the more mature amongst them, and maybe make your site a coordinating point for providing support to those most in need. If you’ve got fresh produce that will go out of date during closure think about the option to donate this to those in need either at your site or deliver to a food bank to help the wider community 5. Healthcare professionals and other essential workers are going to be at the forefront of the battle against Covid-19 and people are already looking for ways to thank them for the hard work they know they’re going to be facing. Could you run a ‘pay it forward’ scheme where members of the public are able to pay for one of these employees to have a meal in your venue when the outbreak passes to alleviate some of the pressure they’re under and to say thank you? 6. Whilst it’s quiet – which it undoubtedly is – start planning your comeback. If you already have a loyalty programme, put some simple actions together to appeal to your existing customer base, or maybe incentives for people who haven’t discovered your business yet. And if you don’t have a loyalty programme in place, now’s the time to change that! Some businesses have started to offer vouchers, with customers paying now, helping cashflow, but not taking the service until business resumes a more regular routine 7. If you do have to close for a time, which is now almost a certainty, don’t just put the shutters up and hope for the best. Be proactive and complete some of those tasks you’ve been meaning to do for a while but have been putting off. Property maintenance is an obvious opportunity and if staff are being paid, but you are unable to open, channel the resource into other reasonable tasks where possible. Maybe checking the fire equipment, sprucing up the décor or running other equipment checks. Where a technology solution is available, use it to review what regulatory inspections are due soon and ensure that all online paperwork is in order
8. Updating staff records and training programmes is another positive option. Use your tech to assess what training is already available, which members of staff are due for a review and look for trends and improvement opportunities that could help your employee experience and your business 9. Keep in touch with your customer database or social media followers so they know you’re thinking about them and your business is top of mind when things return to some kind of normal. Focus on positives and keep upbeat, without being flippant, and encourage interaction. Maybe swap creative menu ideas that people have discovered whilst they’re in isolation, their wish list of pizza toppings or any new drinks that they’ve tried and would like to see available next time they visit your business. Everyone is going to need remote human interaction and you have the chance to conduct some informative customer research to help shape your future business plans at the same time 10. It’s understandable you are going to focus on cutting expenditure and making savings where possible, but as Peter Martin (founder Atlantic club) suggests “Coming out the other side fitter and leaner is a good objective. Continuing to invest in people and their development, in smarter tech, in clever design and in quality data and insight (not least to monitor progress through these tricky times) will pay off down the line”. A lot of hospitality technology is designed to reduce food costs, repairs expenditure, optimise labour costs and increase revenue from getting better booking conversions and driving more footfall. These technologies will be critical when we ‘come out the other side’ of the Coronavirus, and using the downtime now should put you in a better position to recoup profits when life returns to some sense of normality.
Many of these options are available to everyone, but some may be enhanced by using technology so if you are interested get in touch with the ACCESS GROUP on 0845 345 3300 or hospitality@theaccessgroup.com HOTELSCOTLAND • 23
C U S TO M I S E D E M B R O I D E RY
M I L A N O 7 0 0 G S M S U P E R I O R C OT TO N TOW E L
S PA 3 0 0 G S M C OT TO N W A F F L E B AT H R O B E
A R G A N M E A D OW TO I L E T R I E S - N E R O L I WO O D
M O N AC O 5 5 0 T H R E A D E G Y P T I A N C OT TO N S AT E E N
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HOW QUICKLY WILL YOU GET BACK TO FULL SPEED BY GORDON WHITE, MANAGING DIRECTOR, FATBUZZ
IF THERE’S NOTHING PRACTICAL YOU CAN DO AT THE MOMENT, LOOK AT WHAT YOU MIGHT DO WHEN YOUR HOTEL REOPENS.
T
here’s little doubt that the hotel sector has been one of the hardesthit industries; travel has ceased, business meetings are confined to video conferencing, weddings have been postponed, and charity/awards events are all on hold. We have never experienced such a debilitating time. So, it’s hardly surprising that hoteliers are in a state of disarray. A temporary closure is hard enough to deal with, but when it happens so swiftly, and with no definite end date, it makes you wonder what you can do to protect the long-term viability of your business. However, one thing we do know is that this painful period will end. I also think it’s not unreasonable to assume that business will return fairly quickly. So, assuming you can survive the period of lockdown, what should you be doing to attract business quickly when current restrictions are lifted? It is fair to assume that many people will miss their overseas holiday; many because of travel restrictions, and others because they don’t have the appetite for travelling abroad at the moment. Indeed, I know from our clients in the hotel trade that there is already a great deal of interest in staycation breaks. Therefore, you should be doing what you can via online advertising to promote your offers to a UK based audience. Of course, you don’t yet know when you will reopen, but you can be answering enquiries and keeping in touch with those who are making enquiries. Promoting the fact that you will be featuring some reopening offers should encourage people to join your mailing list. For example, develop a none date-defined offer now, but make it clear it will be available to subscribers first, and on a first come first serve basis when the dates are released. This will encourage people to sign-up for further news.
Indeed, focusing on building your database may be one of the most productive things you can do at the moment. Create a reason for them to sign-up. Give them VIP status by offering exclusive deals. Run competitions through your social channels for special discounts and advance access to promotions. The names you can add to your database now will be very useful in driving business in the future, even long after the lockdown period is over. You should also focus on local business. Many of you may be conducting community-based activities right now. If so, this is helping to build trust capital for the future. If there’s nothing practical you can do at the moment, look at what you might do when your hotel reopens. Perhaps a reopening event? If so, use this to create some engagement now. Again through your social channels, promote that you will be hosting a reopening event. Create social media based competitions to win invitations, drinks or meal packages. Now, more than ever before, consumers are looking forward to going out when it is safe to do so. Also, social media activity is very high at the moment, so use this opportunity to engage with your online community and provide them with something to look forward to postlockdown. The important thing is to communicate and remain visible to potential customers. They are looking for somewhere to go, and you are looking for someone to visit. It may not seem like it from where you are right now, but investing now will pay dividends in the future, and hopefully, the not too distant future. When restrictions are lifted, you must get back to full trading as quickly as possible. Don’t wait; the green light will come, preparing now will help you accelerate from the starting line and take you to a happier place in a much quicker time. HOTELSCOTLAND • 25
EVENTS HAPPIER DAYS AND MORE TO LOOK FORWARD TO...
26 • HOTELSCOTLAND
HELP FOR HOSPITALITY
GRANTS UPDATE
Economy Secretary Fiona Hyslop confirmed last week that grant funding for the newly self-employed suffering hardship and SMEs in distress will be available at end April. The new £100 million fund to will be broken into three separate funds as follows: • £34 million Newly Self-Employed Hardship Fund, managed by Local Authorities, will be allocated to the newly self-employed facing hardship through £2,000 grants • £20 million Creative, Tourism & Hospitality Enterprises Hardship Fund, managed by the Enterprise Agencies in partnership with Creative Scotland and VisitScotland for creative, tourism and hospitality companies not in receipt of business rates relief • £45 million Pivotal Enterprise Resilience Fund, managed by the Enterprise Agencies for vulnerable SME firms who are vital to the local or national economic foundations of Scotland Ms Hyslop also confirmed that the grant funding will be open for applications by the end of April, and that recipients will receive funds in early May. She said, ““This funding is intended to relieve the hardship of
individuals and smaller firms that are ineligible for support from the UK Government or are not in receipt yet of the funds they need to survive. “Our hospitality, tourism and creative sectors have been decimated by this crisis and previously profitable businesses have seen demand dry up overnight. “As well as dealing with this immediate crisis, we must look to the future. We must ensure that those businesses with a part to play in strengthening resilience in Scotland’s economy survive this crisis and thrive in future, which is why £45 million is being allocated to those firms. The recently self-employed, who are excluded from the UK’s scheme but suffering hardship, will be able to receive £2,000 grants. For creative, tourism and hospitality companies of up to 50 employees not receiving business rates relief, there will be rapid access £3,000 hardship grants or larger grants up to £25,000 where it can be demonstrated support is needed. The support and larger grants for pivotal SME enterprises will depend on the specific need of the enterprise and be developed by the relevant enterprise agency with wraparound business advice and support.
BOUNCE BACK LOAN The Bounce Back Loan scheme will help small and medium-sized businesses to borrow between £2,000 and £50,000. The government will guarantee 100% of the loan and there won’t be any fees or interest to pay for the first 12 months. Loan terms will be up to 6 years. No repayments will be due during the first 12 months. The government will work with lenders to agree a low rate of interest for the remaining period of the loan. The scheme will be delivered through a network of accredited lenders.
You can apply for a loan if your business: is based in the UK, has been negatively affected by coronavirus, was not an ‘undertaking in difficulty’ on 31 December 2019. You cannot apply if you’re already claiming under the Coronavirus Business Interruption Loan Scheme (CBILS). If you’ve already received a loan of up to £50,000 under CBILS and would like to transfer it into the Bounce Back Loan scheme, you can arrange this with your lender until 4 November 2020.
ISSUES STILL TO BE RESOLVED UK Hospitality, the STA and the SLTA are working on behalf of hospitality businesses throughout Scotland. On their agenda:-
Extend property rates holiday from March 2021 to March 2022 - New assessments for property rates are already underway!
Grant Support Proposal for Properties +RV £51k - There are currently 2,400 tourism businesses that have an RV of greater than £51k and are therefore not currently eligible for grant support.
There has also been calls for the Government to:-
The extension of the current furlough beyond June.
Reduce Air Passenger Duty to encourage overseas tourism when the lock down is over.
It has also been suggested that the Government re-visit reduction in VAT. The UK has one of the highest in Europe for hotels, food and beverage.
Abolish the Tourism tax.
Hold Insurance companies to account for not paying out. HOTELSCOTLAND • 27
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HOTELSCOTLAND • 29
CHECKOUT O
ver the last month, I have gone from wildly pessimistic to less, in fact much less. There is no getting away from the fact that it is not going to be easy, getting back up on our feet, but right now nobody really knows how it is going to pan out. Not the experts, not the politicians, not any of us because this is unprecedented and none of us is psychic. The hotel industry has had tough times before - the Gulf War, the IRA bombing, umpteen recessions - It has always bounced back and it will do the same now... whether that is the end of this year, next or the year after, it is only guesswork at the moment. But I trust, and I said this at the start, that the Government - both the Scottish and National - will support Scotland’s tourism and hospitality industries after all, it is critical to the health our economy, employing as it does close to 350,000 (directly and indirectly) just under 10% of the Scottish workforce. Therefore I do think they will extend the furlough, and I do think there will be support for those with Rateable values over £51K. Certainly, that is what your trade bodies are lobbying for. There has been support for most businesses - whether in grant or loan form, although taking on more debt is not ideal.
BY SUSAN YOUNG, EDITOR Right now it feels like we are all in a coma - we are being kept alive, in the hope that when they bring us out of there will be a sustained recovery. Some people bounce back, healthier than others, and that will be the same now with hospitality. But I prefer to think of business as paused... I am confident that there will be support from all corners, from the Government, from each other and from your customers. People will not forget the businesses that have supported the NHS, who have adapted and delivered food, who have represented the local economy and who have looked after their staff. But we will not forget those that have not supported us - including Booking.com and various other OTA’s and third party agencies. I see that Booking.com has gone to the Dutch Government for financial support... enough said! However, let’s not forget the suppliers to the industry they too, have seen their business cease. I think we will all be supporting local more than ever before, and we will be supporting businesses who supported us. Tell me your stories, let me know how you have got on the good and the bad. If we have our health we have a future and that is a fact.
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