8 minute read
BUSINESS MODELS // A new way forward
Restrictions may be lifting, but the traditional pub model no longer works post-shutdown. Here’s some of the ways hotels will have to adapt their operations.
THE PRESSURE of the two-month shutdown has eased somewhat for venues all over Australia, as restrictions have been lifted to varying degrees, and pubs can begin in-venue trade once more. But with caveats to that trade in the form of social distancing and health safety measures, as well as patron wariness in an ongoing pandemic, pub operations cannot go straight back to business as usual. It will be a long time before pubs trade at pre-shutdown conditions, if at all.
“Whilst devastating, COVID-19 will force many, if not all operators to rethink elements of their business model to establish a more robust operation and somewhat ‘future-proof’ themselves to a certain degree,” states JLL Hotels & Hospitality senior vice president Ben McDonald.
Almost all aspects of pub operations will have to change somewhat – some just a little, while others will have to be overhauled completely.
Hygiene protocols
With concern for people’s safety being paramount, hygiene protocols in venues will have to become even more stringent than they have been in the past. This is not only to ensure the immediate safety of staff and patrons alike, but in order to minimise the chances of a second wave of COVID-19 once more shutting down the country. With fears that a ‘Ruby Princess incident’ could take place in a hospitality venue, operators are taking more precautions than ever. As an industry that has always been stringent about hygiene, particularly around food, upping protocols to be stricter than ever will not be too big a leap.
“The hospitality industry has always had a heightened focus on food safety. So that’s one big advantage for restaurant and pub owners to have some degree of confidence that they already have a strong hygiene culture,” states SafetyCulture COO, Alastair Venn.
While back-of-house protocols remain at the highest level, it’s in the front of house where things will have to change. First is a reconfiguration of your dining and other seated areas to create space between groups of patrons. Next is hand sanitiser made available around the venue. While pump bottles on every table and bars are a place to start, Steven Speed at WDS Hotels has gone one step further.
“We’ve got proper sanitising stations. I think sanitising is going to be here for quite some time. We’ve gone with ones you don’t touch and they’re branded, so they’re going to be here for quite some time. People see it as soon as they come in, so it’s a statement that we’re taking this seriously.”
Extensive changes have been made by WDS Hotels at The Russell Hotel and Fortune of War
There are a plethora of different hygiene protocols to seriously consider now, including staff and patron temperature checks, the removal of communal cutlery stations, the inclusion of sneeze-guard screens, and the regular disinfecting of touchpoints like ATMs and handrails. There are even air filtration systems to help remove germs from a space.
With so many new protocols that you can enact, having checklists to stay on top of it all will be handy as you and your staff get used to this new facet of operations. At SafetyCulture, the iAuditor app is a free tool that includes checklists from everyone from Australian governing bodies to the World Health Organisation and the CDC. You can use any of the checklists and even modify them to best suit your venue and keep staff on top of all that needs to be done.
“You can create really short checklists that your team can take two minutes to check. But it gives you almost a real-time feedback within your business to know in an analytics model that in this location they missed inspections today, and what are the most commonly failed items. So you can take action on that really quickly,” explains Venn. “That really is what we believe is the key to getting business going again. The faster that we can monitor and intervene on risks, the more we’ll be able to open up things a little further.”
Less contact, more comfort
One of the most fundamental shifts to the way pubs operate, is a switch to a model that reduces the amount of communal touchpoints and gathering among different patron groups within the pub. The main source of this shift, is a move from queuing and ordering at the bar, to a table service model that will see patrons stay mainly at their tables, and order both food and beverage either from front-ofhouse staff or through apps. This reduces the need for congregation, and long queues around your public bar area.
How ordering and payment is processed is also going through a big shift, as patrons and staff alike are uneasy with handling physical menus and cash – items which could be touched by hundreds of people per day in a pub setting, so enforcing or highly recommending electronic methods of ordering and payment are another way in which venues can make everyone feel at ease.
Spaces will need to be reconfigured in line with social distancing rules
While table service is currently a trading restriction in most states, some pubs groups have begun enacting the move long-term, as a method of reducing community transmission and to make patrons feel more comfortable within their venues.
Signature Hospitality Group has introduced a new tap-to-order system to all of its The Sporting Globe venues. After being seated, guests will use their own smartphones to tap the new devices set up at the tables, which opens up the relevant website or app, allowing them to order their food direct to their table. The device also automatically enters the venue location and table streamlining the ordering process and limiting contact.
“This technology was designed inhouse to complement and support the existing team structure and to create a safer and more compelling dining out experience for guests,” said a Signature Hospitality Group spokesperson.
At Australian Venue Co (AVC), the group has partnered with Mr Yum across all of its venues for at-table ordering via app.
“We’re going to have a lot of focus on contactless options for ordering and payment. I think it’s inevitable that there’s going to be greater social distancing [long-term], so looking at things like placement of tables and gaming machines are crucial,” states AVC CEO Paul Waterson.
So with a move from bar service to table service and less mingling and movement in between areas of a pub, how does a venue retain a casual pub feel, rather than becoming a more formal restaurant setting? Stevan Premutico, founder of me&u and a long-time advocate for the need for operators to adopt technology within their operations, says it’s all about the atmosphere and the human connection – something we’ve all missed while pubs have been closed. He uses an example of a host as a way pubs can adapt to this new scenario.
“In the evolution of the pub industry, the role of the host becomes really critical. A host meets you, greets you and seats you upon arrival. That person is not there to do the low-value stuff like take your order and organise payment. Tech can do that low- value stuff better than a person,” suggests Premutico.
“The high-value stuff is the connection, the rapport, the fun, the banter that happens when a host interacts with a table. So if we can get rid of the low-value crap and allow the high-value magic to take centrestage, then everyone wins. It’s not a tech-centred experience – far from it, it’s a human-centred experience, that’s driven by tech.”
Cash flow options
With so many mandatory or recommended changes to be made to the pub business model, significant expenditure is inevitable. While capex is part and parcel of any hotel business, the need to spend it now is particularly painful when there has been very little revenue coming in over the last two months – let alone profit.
At WDS Hotels, which is located primarily in the tourism and corporate end of Sydney’s CBD, Speed has been very comprehensive in his overhaul of the Fortune of War so that his venue will be in its best position to recommence trade. But it has come at a cost.
“The Rocks and Circular Quay relies on ships, tourists and corporates, so we have to do it better than ever because people want to feel safe to come back into a venue. We’ll be under the spotlight. [But] it’s going to cost us money to do this, we will lose money.”
So how can venues get a hold of funds at such an imperative time? Morgan Kelly, partner – restructuring services at KPMG, says now is the time to talk to your bank, as well as consider reaching out to private equity firms. But for the best results be prepared with a detailed business plan.
Fortune of War’s branded hand-sanitising stations
“If loans can’t be sorted out look to business restructuring options. But make sure you go in with your revised business plan that demonstrates how you will continue to be a viable and newly innovative business,” suggests Kelly.
There is so much to consider when it comes to thinking about the new trading environment that pubs have to contend with and adapt to. The points made here barely touch the surface, and it can feel overwhelming when thinking about what the future will hold for pub trading.
But in the midst of all of that, the need to restructure certain parts of your business can be seen as an opportunity; a chance to reinvent parts of the business – and in fact, the wider industry – that were stagnant before COVID-19. It’s a chance to look at things that ‘we’ve always done that way’, and reassess their worth.
And amid all the chaos and stress, that’s a silver lining if there ever was one – the chance to create something new, and something better.
