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Another, and another favourite hospitality business bites the dust.

We are told that it is all due to Covid-19, and we are told it is not Covid-19. We are told it is because of over-supply, industry-wide under-pricing, not clever enough branding, not possessing the ‘secret sauce’, the ‘one crucial step’.

We are told it is too little government support, or too much.

On small to medium business, Labour MP Deborah Russell let slip what many others were thinking, but then she took it back, and so did we, because a singular response to a sustained crisis is, at best, half true – and also not true at all.

Hospitality businesses have closed, and will continue to close, including some with previously strong balance sheets and incredibly smart business practice. Who would have predicted a global pandemic? Even the smugly loaded Bill Gates was caught somewhat off guard despite his early predictions.

We can quote the wisdoms of great businesspeople and gazillionaires ad nauseum – the reality is everyone has been caught out.

Warren Buffet has lost millions. In our own industry, our beloved Danny Meyer shed tears and thousands of employees – the ones he always wanted to put first.

The nation was not ready, the world was not ready – it seems a bit grim to expect every business, hospitality or otherwise, to have buffered themselves from the unimaginable.

Some will be unlucky – others will close because Covid-19 smashed their badly leaking business of poor productivity. They had always worked incredibly hard, but they never managed to get their head above the rising tide of professionalism demanded by a rapidly evolving industry.

High tourism numbers, and high-levels of sociable Kiwis perhaps clouded judgement – not a difficult hole in which to fall. Hospitality is notorious for seducing creative types and then ghosting them – leaving an empty cavern of perfectly distressed concrete walls and an overpriced oven.

The unlucky ones, and the ones who have learnt a brutal lesson will, we hope, try again when stronger and pressurised into unbreakable business bedrock.

But do not believe for a moment that the hospitality industry has not had its mind on speed dial.

There was plenty of amazing business before Covid-19 and some incredible business during the past harrowing weeks.

Hospitality is not broken, and while some cracks in the industry have always been transparent – there are piles of Level 3 ‘Profit and Loss Statements’ that are pure business beautiful.

There will be more at Level 2.

Some of the most exciting battle stories come from the hardest hit, and hospitality dense zones.

Wellington hospitality businesses that pivoted brilliantly and exceeded last year’s figures over Level 3 despite deep loses over Level 4.

Central Otago and Arrowtown businesses blitzing Level 3 without a single click and collect tourist. The Christchurch fringe, a two-day business conversion on the West Coast, many in the depths of Dunedin, and numerous heartening business figures coming out of Auckland.

The stories are there, not in the newspapers; on the sheets of Xero and Loaded.

At Level 2, some businesses will thrive because they have been planning their approach for weeks and they have had strong business practice for years. Their communities adore them.

Hospitality is a complex business model and it can mould the smartest business minds possible. Some will be pleased to merely survive in dire circumstances but their business acumen two years from now will be impressive.

There are numerous reasons why a hospitality business will survive even during the most challenging times. Some luck is required, but so is a great deal of woven wisdom and sharp business practice.

Some continued national and local support will go a long way amongst the brightest in the industry. But so, will a great deal of practical action within the business.

Is the re-invention or re-imagining of the hospitality industry really required? Well, for some hospitality businesses that may well be true.

But for others, the new news, is really the old news.

It does not sound as sexy, but solid and professional business practice remains the best way forward. It is not easy. There are multiple areas requiring attention, and many not always fun to undress.

Strategic leadership, financial planning, open book management, cost of goods management and stock-taking. Cultural leadership, guest experience, average sale – have you fallen asleep yet?

Marketing, sales, and fulfilment strategy, data building, pricing and menu design, systems design, ‘operations’ and process. Asleep yet?

If you are asleep then a hospitality business is not for you.

If you are awake and excited, we know who you are, and exactly how well you are doing right now. Bravo we salute you.

Yes, the world is changing rapidly. And yet, the faster the world changes, the more important the solid things become.

The industry will embrace all the fancy new toys, technology, and hype-talk – but what will save them will be all the stuff they knew they should have done before.

 

James O’Connell – CEO/Founder, The Hospitality Company.

2020-05-11T21:20:53+13:00