AUSTRALIAN
AUSTRALIA’S NATIONAL HOTEL INDUSTRY MAGAZINE
July 2020
We are #StrongerTogether Getting the on-premise through shutdown and recovery
ED’S NOTE TAG
WE ENCOURAGE RESPONSIBLE DRINKING Get the facts DrinkWise.org.au
PUBLISHED BY: Food and Beverage Media Pty Ltd 41 Bridge Road GLEBE NSW Australia 2037 Tel: 02 9660 2113 Fax: 02 9660 4419 PUBLISHER: Paul Wootton EDITOR: Vanessa Cavasinni vcavasinni@intermedia.com.au
Editor’s Note THERE’S LITTLE
supplier partners have been supporting pub and
doubt that the last
bar operators through the #StrongerTogether
three months have
campaign, a digital resource hub for operators
been the toughest that
that provided government updates, support and
Australian on-premise
advice, supplier offers to the on-premise trade,
operators have had
and examples of how some businesses were
to endure outside of
coping with the shutdown.
wartime. With little
As venues start to re-open, we will continue
warning, pubs and
to support this dynamic industry in its toughest
bars had to shutdown
trading conditions by providing you with the
for two months, or eke out significantly less
information and insight necessary to get your
revenue through takeaway and delivery.
business through this pandemic. Because if this
Overnight, staff had their hours cut, were stood
crisis has taught us anything, it’s that we truly
down indefinitely or were let go completely.
are stronger together.
Pub operators have had to navigate through the unknown, adapting to shifting conditions at
Vanessa Cavasinni
a pace that has never been experienced before.
P: 02 8586 6201
Throughout this time, Australian Hotelier and its
E: vcavasinni@intermedia.com.au
Road to Recovery virtual summit Leading industry mastheads, Australian
Hear from the likes of Stephen Hunt (Hunt
Hotelier, Hospitality, Bars&Clubs and TheShout
Hospitality), Mikey Enright (Barrelhouse
will be hosting ‘The Road to Recovery’, on the
Group), Hamish Watts (Applejack
morning of Wednesday 15 July. The webinar
Hospitality), Zara Madrusan (Made in the
will address the challenges that still lie ahead
Shade) and Morgan Kelly (KPMG), Jennifer
for pubs, bars, restaurants and cafes; and
Russell (W. Short Hospitality) and Andy
highlight best business practice for hospitality
Mullins (Sand Hill Road).
venues in the current environment.
2 | Australian Hotelier
You can register for the webinar here.
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Thank you to our industry partners for supporting the #STRONGERTOGETHER initiative
These businesses have remained keen advocates and supporters of the on-premise industry throughout the shutdown.
Thanks to our valued partners
MY MARKETING DEPARTMENT
www.theshout.com.au/stronger-together
BUSINESS MODELS
4 | Australian Hotelier
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 The Sporting Globe in Knox, Victoria
sanitiser made available around the venue. While pump bottles on every table
July 2020 | 5
BUSINESS MODELS
Watch
video here Venue configurations We spoke to Paul Kelly of Paul Kelly design to get his take on how operators will need to reconfigure their venues to not only accommodate social distancing restrictions, but to make patrons feel safe in their surroundings. Watch the interview left.
and bars are a place to start, Steven Speed at WDS
getting business going again. The faster that we can
Hotels has gone one step further.
monitor and intervene on risks, the more we’ll be
“We’ve got proper sanitising stations. I think
able to open up things a little further.”
sanitising is going to be here for quite some time.
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. Ben McDonald, JLL Hotels & Hopsitality
We’ve gone with ones you don’t touch and they’re
Less contact, more comfort
branded, so they’re going to be here for quite some
One of the most fundamental shifts to the way pubs
time. People see it as soon as they come in, so it’s a
operate, is a switch to a model that reduces the
statement that we’re taking this seriously.”
amount of communal touchpoints and gathering
There are a plethora of different hygiene protocols to seriously consider now, including
main source of this shift, is a move from queuing
staff and patron temperature checks, the removal
and ordering at the bar, to a table service model
of communal cutlery stations, the inclusion of
that will see patrons stay mainly at their tables, and
sneeze-guard screens, and the regular disinfecting
order both food and beverage either from front-of-
of touchpoints like ATMs and handrails. There are
house staff or through apps. This reduces the need
even air filtration systems to help remove germs
for congregation, and long queues around your
from a space.
public bar area.
With so many new protocols that you can enact,
How ordering and payment is processed is also
having checklists to stay on top of it all will be
going through a big shift, as patrons and staff
handy as you and your staff get used to this new
alike are uneasy with handling physical menus and
facet of operations. At SafetyCulture, the iAuditor
cash – items which could be touched by hundreds
app is a free tool that includes checklists from
of people per day in a pub setting, so enforcing
everyone from Australian governing bodies to the
or highly recommending electronic methods of
World Health Organisation and the CDC. You can
ordering and payment are another way in which
use any of the checklists and even modify them to
venues can make everyone feel at ease.
best suit your venue and keep staff on top of all that needs to be done.
While table service is currently a trading restriction in most states, some pubs groups have
“You can create really short checklists that
begun enacting the move long-term, as a method
your team can take two minutes to check. But it
of reducing community transmission and to make
gives you almost a real-time feedback within your
patrons feel more comfortable within their venues.
business to know in an analytics model that in this
Signature Hospitality Group has introduced a new
location they missed inspections today, and what
tap-to-order system to all of its The Sporting Globe
are the most commonly failed items. So you can
venues. After being seated, guests will use their
take action on that really quickly,” explains Venn.
own smartphones to tap the new devices set up
“That really is what we believe is the key to
6 | Australian Hotelier
among different patron groups within the pub. The
at the tables, which opens up the relevant website
BUSINESS MODELS
Extensive changes have been made by WDS Hotels at The Russell Hotel and Fortune of War
or app, allowing them to order their
setting? Stevan Premutico, founder
food direct to their table. The device
of me&u and a long-time advocate
There are more than 100,000
also automatically enters the venue
for the need for operators to adopt
free checklists available
location and table streamlining the
technology within their operations,
through SafetyCulture. You
ordering process and limiting contact.
says it’s all about the atmosphere
Checklist galore
can find a collection of
“This technology was designed in-
and the human connection –
hospitality checklists here,
house to complement and support the
something we’ve all missed while
that cover everything from
existing team structure and to create a
pubs have been closed. He uses an
re-opening for the first time,
safer and more compelling dining out
example of a host as a way pubs
employee procedures, food
experience for guests,” said a Signature
can adapt to this new scenario.
assessment and key area
Hospitality Group spokesperson.
inspections, plus much more.
At Australian Venue Co (AVC), the group has partnered with Mr Yum
becomes really critical. A host meets
across all of its venues for at-table
you, greets you and seats you upon
ordering via app.
arrival. That person is not there to
“We’re going to have a lot of focus
The faster that we can monitor and intervene on risks, the more we’ll be able to open up things a little further. Alastair Venn, SafetyCulture
“In the evolution of the pub industry, the role of the host
do the low-value stuff like take your
on contactless options for ordering
order and organise payment. Tech
and payment. I think it’s inevitable
can do that low- value stuff better
that there’s going to be greater social
than a person,” suggests Premutico.
distancing [long-term], so looking at
“The high-value stuff is the
things like placement of tables and
connection, the rapport, the fun,
gaming machines are crucial,” states
the banter that happens when a host
AVC CEO Paul Waterson.
interacts with a table. So if we can get
So with a move from bar service
rid of the low-value crap and allow
to table service and less mingling
the high-value magic to take centre-
and movement in between areas
stage, then everyone wins. It’s not a
of a pub, how does a venue retain
tech-centred experience – far from
a casual pub feel, rather than
it, it’s a human-centred experience,
becoming a more formal restaurant
that’s driven by tech.”
July 2020 | 7
BUSINESS MODELS
Spaces will need to be reconfigured in line with social distancing rules
Cash flow options
Changes in patron behaviour
With so many mandatory or recommended changes to be made to the pub business model,
In late April, me&u
significant expenditure is inevitable. While
conducted a survey of
capex is part and parcel of any hotel business,
Australians nationwide to
the need to spend it now is particularly painful
gauge attitudes around
when there has been very little revenue coming
hospitality in light of the
in over the last two months – let alone profit.
COVID-19 pandemic.
At WDS Hotels, which is located primarily
The results showed a
in the tourism and corporate end of Sydney’s
public that was keen to
CBD, Speed has been very comprehensive in his
get back to pubs, bars,
overhaul of the Fortune of War so that his venue
restaurants and cafes, but
will be in its best position to recommence trade.
with some slightly different
But it has come at a cost.
behaviours. Here are the
“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
Fortune of War’s branded hand-sanitising stations
safe to come back into a venue. We’ll be under the spotlight. [But] it’s going to cost us money to
thinking about the new trading environment that
do this, we will lose money.”
pubs have to contend with and adapt to. The
So how can venues get a hold of funds
points made here barely touch the surface, and
at such an imperative time? Morgan Kelly,
it can feel overwhelming when thinking about
partner – restructuring services at KPMG, says
what the future will hold for pub trading.
now is the time to talk to your bank, as well as
But in the midst of all of that, the need to
consider reaching out to private equity firms.
restructure certain parts of your business can
But for the best results be prepared with a
be seen as an opportunity; a chance to reinvent
detailed business plan.
parts of the business – and in fact, the wider
“If loans can’t be sorted out look to business
industry – that were stagnant before COVID-19.
restructuring options. But make sure you go in
It’s a chance to look at things that ‘we’ve always
with your revised business plan that demonstrates
done that way’, and reassess their worth.
how you will continue to be a viable and newly innovative business,” suggests Kelly. There is so much to consider when it comes to
8 | Australian Hotelier
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.
key takeaways for pub operators to consider.
• 65%
have
a preference for a digital menu
• 60%
are wary of
standing in queues due to hygiene concerns and;
• 95%
want to
pay on card or via their mobile device.
ROUNDTABLE Will Connolly, vice president investment sales for JLL Hotels & Hospitality, spoke to three savvy publicans to get their take on how COVID-19 has impacted their businesses and the industry.
Hardimans Hotel
Leaving lockdown: A publican’s perspective SINCE THE beginning of June we have
Inn, South Brisbane and The Collective
form of an ever-expanding economic
witnessed the easing of restrictions for
in Palm Beach. Global industry stalwart
bubble, where costs have been increasing,
our industry across Australia with varying
Michael Thiele re-entered the industry
there has been pressure on real margins
degrees of limitations, depending on
by purchasing Hardimans Hotel in
through ever increasing competition, a lot
which state you call ‘home’.
Kensington, Victoria which he re-opened
of it through price driven sales strategies.
in 2018. And having owned and operated
If our industry is to survive as we all
While many of our nation’s publicans feared how they would survive the
pubs throughout Perth, George Bagios’
know it, then all stakeholders, federal
uncertainty surrounding the COVID-19
most recent pub project has been the
and state governments, landlords and
lockdown, we’re now faced with many in the
establishment of The Coppersmith in
operators need to come up with strategies
industry deeming it ‘the great unknown’.
South Melbourne as a premier
and solutions for the biggest issues that
hospitality destination.
face the industry.
The general public certainly made no secret of their desire to be back to at the public bar, but will the coming weeks be viable for our industry as it works with limitations no one would have ever predicted? This week, we spoke with three publicans who between them have
Our industry over its lifetime has faced numerous challenges. With the COVID-19 crisis being the worst, how quickly do you believe we, as an industry, can recover fully from it?
• Simplify the Federal Hospitality Award and remove penalty rates • Lower business tax • Raise GST • Abolish FBT • Abolish payroll tax • Abolish stamp duty
decades of experience within pubs
Thiele: There has never been anything
• Rents re-evaluated, at a more realistic
establishing and heading up brands
like this current pandemic in my or anyone
level for pure hospitality businesses,
such as Beer DeLuxe and Open Door
else’s experience or lifetime. However,
unless landlords want to be looking at
Pub Co. Craig Shearer of Open Arms
this is the opportunity of a lifetime; the
increases in vacancy rates
Hospitality currently operates The
chance for the industry to RESET.
Terminus Hotel, North Fitzroy in Victoria; and two Queensland venues, the Plough
Unless the above can be resolved, I
I believe that the industry has been
don’t believe things are going to get back
living too long in a fool’s paradise in the
to anything like “normal” for a significant
July 2020 | 9
ROUNDTABLE
period. Those with deep pockets will survive, but a
think most businesses that do survive this will come
lot will not.
out of this with a leaner business model.
Shearer: None of us have ever been through a
This is a chance... for all venues to look at how they can best position themselves going forward. George Bagios, The Coppersmith
Bagios: I certainly think the takeaway option will
situation like this, so not having the ability to crystal
live on with us and most other venues. We’re located
ball likely scenarios has meant we just have no idea
in a dense residential area of South Melbourne,
what a recovery looks like, how long it may last, or
so I believe it makes sense for us to continue on
if people will return to normal social and spending
with delivery of boutique wine to some of our more
habits again. I don’t think there is a quick fix.
‘well-heeled’ neighbours and also continue to offer
We are now seeing a few outbreaks occurring
ready-made meals and even the pre-packaged ‘finish
through Victoria that show just how quickly the virus
off at home’ dining experiences which has been an
can get going again, so I feel that without a vaccine in
excellent initiative of our industry.
place, it will be very difficult to kick start our industry again. I am confident we will get there eventually, it may just take a little longer than we all hope.
Has this made you consider keeping some of the initiatives you’ve been forced to make implemented even after the lockdown?
Do you think this could in fact be a positive long term for our industry given the public has potentially been given a reminder of what they ‘have lost’ during this time? Thiele: The public is very aware of what they are missing out on, but will they be prepared to pay more for what is a very expensive service and
Thiele: Labour is our largest single cost so
product to provide under the current restricted
initiatives we would consider keeping would
trading conditions? We’ll have to wait and see.
be contactless ordering from an app, whilst
Unless there is significant change in regulation and
also limiting the kitchen trading hours to more
our industry RESETS, the public is going to end
commercially viable times.
up with less to choose from in terms of hospitality
Some of the services we have suspended we would simply discontinue or perform ourselves. I
offerings when they go out. Shearer: Quite possibly. It might be a very long time before we look back on this in time and say,
Plough Inn
“that helped my business/industry”, but I think eventually we might. I am pretty sure that with improved hygiene and cleaning processes, there will be a long-term behavioural change we see from our operators and yes, just maybe there may be a little more love for your local. Bagios: I certainly think it could be a positive. A few days after the lockdown came in, we began to get our head around the fact that it was a chance for not only our venue to revisit some of our practices, but for all venues to look at how they can best position themselves going forward. We all certainly
The Coppersmith
hope that we never experience anything like this again, but who knows? All venue operators will now be even stronger than before in their resolve, along with the greater public buoyed by their desire to support our pubs – that must be a positive. On behalf of the JLL Hotels team, we stand in support of all publicans as they begin their journey across Australia’s easing of restrictions to in turn, build a stronger and even more resilient industry than before.
10 | Australian Hotelier
OPERATIONS TAG
The
Post Pivot The complexity of re-opening is taking form as we digest the proposition of not being able to return to unhindered trading conditions for many months to come. By Luke Butler, managing director of Hastings People.
economic impacts will mean it is unlikely that pre COVID-19 customer levels will return immediately. Secondly, a considerable percentage of consumers may have less money to spend and will be apprehensive about general visitation, or large event gatherings due to health and safety concerns. Finally, operating costs will likely normalise before trading conditions or revenue. Labour may be reduced in some instances, however cost of goods and rent will return with gusto.
AS COVID-19 took hold of the industry,
and those who continue to develop and
a number of businesses took creative
adapt once the season has started will
you begin to realise that returning with a
action over the last three months in an
take the cookies.
‘business as usual’ approach is not going
effort to counteract the loss of trade,
Customer expectations are not going
When you combine these three points,
to suffice. Even a moderate forecast on
while others chose to simply accept it
to mirror a pre COVID-19 world once
trade levels, will cause alarm bells to ring
and enter full hibernation.
play resumes, and the playing field will be
for many operators.
Takeaway felt like an obvious choice
unlike any we have experienced. In order
for many, but it is expensive to execute
to navigate this successfully, thinking
Time for innovation
and sufficient volume has been difficult to
really needs to shift from the short-term
It is my position that through necessity,
generate. It is an activity that might make
to medium- or long-term.
re-opening will require a time of rebirth
operators feel like they are doing something but most commonly, it is a loss leader.
There are a few of assumptions on which we can base our thinking.
for venues, and this is when I believe the real innovation needs to take place.
Navigating our way through partial
Firstly, venues will not return to full
or full hibernation is akin to pre-season
trading capacity for some time and even
to drive multiple revenue streams, both
Venues need to be viewed as platforms
training. The real test of skill is on its way
when legally permitted to do so, broader
inside and outside of their four walls.
July 2020 | 11
OPERATIONS
MENTAL HEALTH
Yes, one could expect gaming revenue to return quickly for certain venues and demographics, however who knows to what level. Player patterns will definitely have shifted, maybe by a little, maybe by a lot. Perhaps some players will lack the desire or funds that once led to them sitting in a room for an extended period of time. A moderate change to player behaviour will heavily impact many hotels, not only in As on-premise trading resumes, takeaway can be viewed as an ancillary revenue driver
revenue but to the valuation of businesses and properties, which when applied across a portfolio of venues, can significantly impact a company’s net position.
will still be attractive for peak periods, so
So, what could a post pivot look like?
re-evaluating promotional activity at these
Offering takeaway makes more sense
times, or pointing activity at different
when a venue is trading. Kitchens will
trade periods, is worth considering.
be staffed regardless and this service
Reservations are a great way to ensure
could supplement on-premise revenue by
available seats are fully utilised during
encouraging more food and beverage out
peak times. Seat wastage is an issue
the doors.
exacerbated by restricted numbers, so if
Bottled cocktails, draught beer,
you can ensure every seat at every table is
ready-to-heat and ready-to-eat meals
fully occupied, you will make more money.
will continue to be in demand as people spend more time at home. Enabling sales through your website or over the phone is easy to establish and, if actively pushed, could effectively increase revenue with minimal cost implications. Running promotions might require some thought. Do you need to discount food in-house or is this an activity that is better reserved for takeaway items only? Getting out of the house and into a pub
Supporting reservations and general
Venues need to be viewed as platforms to drive multiple revenue streams, both inside and outside of their four walls.
punters with table service while ensuring tables are turned over a couple of times a night will improve upselling ability and overall revenue. Offering packages to increase the per-head spend is something worth considering. Perhaps they can be a combination of products to be consumed in venue and others to be taken home. Corporate and social events are going to take a completely different form. Creating
Hampers can help capture some of the functions market that has not yet returned
a service product that can cater to this market off-premise is a big opportunity. A number of operators have experienced success selling ‘party packs’ or hampers to customers during hibernation and this could be another example of offers that make more sense when venues are trading. The value of a customer has never been higher. Understanding and then catering to their needs inside or outside of your venue is a great strategy. Increasing innovation from the outset and then scaling back once trade patterns become clear might just be the difference.
12 | Australian Hotelier
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