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Coronavirus - The Transformation of the Hospitality Industry

Coronavirus - The Transformation of the Hospitality Industry

by Luke Butler

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On the 8th March, I flew from Sydney with my family to visit Disneyland in LA for 5 days, then to Hawaii for 10. When we left, both Australia and the US were as normal as they had ever been.

Life was very ordered with people gainfully employed attending work and the general populace enjoying a drink and a meal in a restaurant if they chose to. That was literally less than three weeks ago.

The total global upheaval that has taken place in the ensuing days has been astonishing. We have morphed from a fully functioning society to a nation essentially in lock down, but it is the impact on the hospitality and leisure industry that concerns me most (for obvious reasons).

Using only our business as a barometer, it is easy to evaluate the significance of this event.  Hastings was on track to achieve a record month in March. By the 8th, we were ahead of budget for the period and had a significant pipeline with high forecasted conversion rate.

That all changed in the space of a week.

As soon as the Federal Government announced that it was taking a proactive approach to controlling COVID 19 – particularly by limiting licensed premises’ operating capacity – our pipeline all but evaporated.

Hastings’ experience is a valid reflection of the huge problems facing the industry and its employees. The number of staff stood down, made redundant or terminated over the course of the last fortnight is almost unfathomable.

From Merivale to Solotel, Applejack to Sand Hill Road, Accor to IHG and Spotless to Emirates – everyone is suffering. There is no escaping this pain and the impacts will be long-lasting for the sector.

Those in the hospitality business will understand the inability to withstand significant drops in revenue experienced by most operators. Several published articles have already stated this. Most businesses survive month-to-month meaning this challenge could well ruin a large number of companies, big and small.

Such a tragedy will reshape hospitality as we know it. My one hope is that the positive implications of this experience will eventually out-weigh the negative commercial aspects and in some ways, I feel we are already seeing that.

How many examples of creativity and ingenuity have we witnessed over the last two weeks? You need only open Instagram to see some of the incredibly innovative ways some operators are choosing to tackle the issue head on. We are being asked questions we’ve not been asked before.

The industry will emerge from this challenge and I believe it will be with stronger, more adaptable and creative business leaders who have fought to survive, learning incredible lessons along the way. Even those who don’t survive will emerge better for the experience in the long run.

I hope their learning and entrepreneurial spirit will drive them to keep pushing forward and create something new that can better survive the myriad of challenges.

Having started my business less than two years ago, I am in the pool of people who are being severely challenged by this crisis. Hastings is still in start-up mode and cash flow is everything.

Like so many of our industry’s employers, I had to make the extremely difficult decision to roll out redundancies to ensure that I could fulfil the entitlement obligations for our team, should things not recover as quickly as we need them to.

It’s going to be tough for a lot of people, however, the other positive I have seen is the way the industry has come together to support one another. That, if nothing else, is something we can take away from this.

Offers of free meals for laid off workers, messages of support, active attempts to connect in an increasingly disconnected community – these efforts are all meaningful. Let’s hope that attitude continues long after the virus has gone. I for one think this mindset is what makes hospitality people, hospitality people.

I have no doubt that this extraordinary experience will make those in our industry better in the long run, both commercially and as human beings.