Coming out of COVID-19

Leura Garage

As hospitality businesses throughout Australia move out of lockdown, challenges abound. Here’s our guide to establishing short, medium and long-term goals for restaurants and caterers. By Lynne Testoni

It’s been the business blip that no-one expected—even the normally agile hospitality sector. COVID-19 and its associated shutdowns have thrown up challenges that even the best prepared restaurants and cafes have struggled to meet. 

However, while it’s been a difficult year, business consultant Aaron Day of 3rd Gear says that there are good reasons to be optimistic about the future.  People love eating out, and that will always be a key driver of demand, he says.

“I think there are good things ahead,” he adds. “Restaurant and cafe owners need to remember that people are now craving for the simple joys that they used to take for granted.

“For those that can make it through, I think there are going to be some good times ahead. There are also going to be some market share opportunities as well. The ones that don’t make it are going to leave gaps in the marketplace.” 

James Howarth of Leura Garage

The lockdown hump

Restaurateur James Howarth of Leura Garage in Sydney’s Blue Mountains was especially hard hit by the pandemic because his business was dependent on overseas tourists, a market that is non-existent at the moment. 

“The lockdown led to a great deal of stress because of cashflow and all the uncertainty,” he says. “And of course, you’re managing everybody else’s stress as well when it’s your restaurant. It’s like you are conducting an orchestra that’s out of tune, so you need to step up. 

First steps

Consultant Paul Gardner recommends using any down time to take a good hard look at your business model—and make any necessary changes.

“Ask yourself what does success look like for us today?” he says. “Is it attracting 500 people to a sitting three times a day? Or is it attracting quality people to a special event? How do we mark our success? Is it yield? Is it profit? Is it revenue? That’s a really, really critical piece for businesses. 

“And then once you’ve got that in place, think about how do you achieve that with personnel. Do you need new technology, such as asking if it is time for the restaurant’s booking system to be completely overhauled?”

Reworking the offering

After 10 years at Leura Garage, Howarth says he had to completely rework his offering. The restriction on diner numbers meant that he wasn’t able to seat as many people, so he started restricting guests to a set menu.

He also had to renegotiate terms with all his regular suppliers, who are predominantly local producers.

“The people up here in the Blue Mountains are all pretty tight. And so friendships were definitely strained. Fortunately, we were able to access the bank guaranteed loans of $250,000, and then were able to start paying some of our suppliers.”

Consultant Aaron Day

COVID compliance

Aaron Day says that it’s important for restaurants and cafes to get COVID compliance sorted right from the get-go. Regulations vary from state to state, so it’s worthwhile spending time to ensure that you are up to speed with the relevant regulations. 

“There can be a bit of an upfront cost with instigating and creating those processes and systems, but they’re critical, and especially in hospitality,” he argues. 

“You have got to be very obvious with your whole COVID strategy—people need to feel safe, and they need to feel that you care about them. They need to know that they can trust that environment that they’re entering.”

In the medium term

Day says that once you are back and open again, it’s a good time to review and improve your marketing. 

“Have a look at your website, to check it still reflects your business, such as whether it has the current menu, for example,” he says. 

“Look at your social media, and take the opportunity to maintain a connection with your customer base. See if you can be helpful, but at least keep them updated and connected and let them know what’s going on.” 

He also recommends surveying your customers. “Survey your customers, implement your findings, then share what you’ve done,” he says. “It builds the connection, and it allows you to improve your offer.”

Increasing spend

Howarth says that the set menu established in the early days after lockdown eased has actually been good for his business’s bottom line, resulting in an increased spend from most customers.

“We developed a little bit of spiel about how things have changed because of limited capacity, and we now have a set menu. So we’ve raised the average spend, on average, by about a minimum $16 per head, up to $25 head, but it’s not without its challenges. 

“You’re going to risk alienating some customers. We have eliminated pizza, which was something that our business was built on. Because pizza is something that everybody shares, of course, and we just couldn’t afford to do that. So we had to take pizza off the menu. Now we do takeaway pizza only, but it did increase customer spend.”

In the long-term

In the long-term, a successful hospitality business is all about your staff, says Day. He says that when planning for 2021, he thinks this is the time to secure good people both in the kitchen and front of house. 

With restrictions on overseas workers, he says now is the time to protect your future by recruiting the best people you can find and working with existing staff to make them happy—and stay with you. 

Howarth says that systems around food hygiene will be even more important, because he feels that customers will have a higher expectation in this area that ever before. He has always been a stickler for hygiene, but predicts that communication around this area will be even more important because customers will be nervous for a while.

“It’s going to be more important for the customer to know that venues are clean. You’ve got to keep on top of everything all the time.”