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Fri 15th May 2020 - Friday Opinion
Subjects: The most dangerous phrase in politics, an open letter to hospitality leaders, making more money from your marketing and the hospitality sector needs room to breathe 
Authors: Paul Chase, Barak Peled, Victoria Searl and Philip Sandzer 

The most dangerous phrase in politics by Paul Chase

I’ve read the government’s document “Our plan to rebuild: the UK government’s covid-19 recovery strategy” three times now. In terms of what it says about reopening the licensed trade it doesn’t take us much further forward than the prime minister’s TV address on Sunday (10 May). We now know the sequencing of reopening in very broad brushstroke terms, but little else. 

On page 31 the document states from 4 July at the earliest, and subject to satisfying as yet unspecified covid-19 security measures, foodservice providers and pubs will be able to reopen. I take it foodservice providers means cafes and restaurants, but no attempt to define “pubs”, as distinct from bars, is made at all. There is no mention of nightclubs, of which there are about 8,765 (ref: Ibis World), or of a much-neglected sector, social clubs, of which there are some 17,000. And we don’t know whether hours of opening will be limited, or whether the government may relax social distancing because of trade body representations. In short, there is nothing in this document that enables operators to plan for reopening with any confidence.

I think the prime minister’s initial instinct was to limit government action to advice and guidance, such as Sweden has done, and not to have a legally enforceable lock-down at all. Then came the modelling from Neil Ferguson from Imperial College that predicted as many as 500,000 deaths if government did nothing, and the government panicked. The cry “something must be done” went up, and a lock-down is “something”. Besides, it was what other countries were doing – could they all be wrong?

I was initially in favour of a short lock-down because I accepted the government’s original rationale for it, which was to “flatten the curve” or buy time to increase intensive treatment unit/critical care beds. Well, with four Nightingale hospitals mothballed and 50% of level two and level three hospital beds lying empty, I think we have achieved that. Not one “expert” worth his salt will tell you we can stop a respiratory virus, and if they did they would be lying, or else I am deluded and we have no common cold or flu cases every winter. So, with up to 20% of the country likely to have already had the virus and a health service with a massive amount of level two and level three beds, we are more than ready for a second spike, as it stands. 

Remember, we cannot lock-down forever and we need to come out, which brings me to the flu season. Why do we have a flu season? The main reason is because as it gets cooler people coop-up and spend more time in close proximity; the population becomes denser and therefore it's easier for a virus to be transmitted. Also, people tend to eat less fruit and vegetables and see less sunlight and our natural defences are slightly depleted. The longer we stay locked down, the closer we will be to the next flu season, so essentially we will be hitting a second spike as people begin to mix, and a second spike will lead nicely into a third as the flu season kicks-in. If you want to overwhelm the NHS, then this is the exact way to do it. 

I agree with professor Johan Giesecke, who is an advisor to the World Health Organisation, who wrote: “Everyone will be exposed to severe acute respiratory syndrome coronavirus 2, and most people will become infected. Covid-19 is spreading like wildfire in all countries, but we do not see it – it almost always spreads from younger people with no or weak symptoms to other people who will also have mild symptoms. This is the real pandemic, but it goes on beneath the surface, and is probably at its peak now in many European countries. There is very little we can do to prevent this spread – a lock-down might delay severe cases for a while, but once restrictions are eased, cases will reappear. I expect that when we count the number of deaths from covid-19 in each country in one year from now, the figures will be similar, regardless of measures taken.” (Ref: article The Invisible Pandemic, Elsevier, 5 May).

New York’s governor Andrew Cuomo says: “It is shocking to discover 66% of new hospitalisations appear to have been among people largely sheltering at home.” I fear that is precisely what will happen here. According to Dr Steven Shapiro and the University of Pittsburgh Medical Centre: “Crowded indoor conditions can be devastating in nursing homes, while on the USS Theodore Roosevelt 1,102 sailors were infected, but only seven required hospitalisation, with one death. The USS Theodore Roosevelt had a crew of 4,800. Given the acute sample, testing was holistic. This yields an actual infection rate of roughly 23%, and among those infected, the fatality rate is 0.09%. Among the Roosevelt’s entire crew of assumedly healthy and able-bodied sailors, on a floating Petri dish, during the thick of viral outbreak that shut down all schools and placed healthy citizens across America under house arrest, the fatality rate as a percentage of the total crew was 0.02%.” (Ref: American Thinker, 5 May).

It seems more than obvious there is little sense in quarantining the young and healthy. Our efforts should be directed at shielding the elderly and infirm – in care homes, hospitals and in the community and we don’t need to put the entire population under house arrest and shut down the economy to do that.

We should end the lock-down now and return to the early government advice to the public, combined with a hygiene standards-led approach to reopening licensed premises and other businesses. To continue with lock-down will deliver diminishing returns in terms of direct deaths from covid-19; hugely increase collateral deaths from other diseases; and do vast damage to the economy in general and our sector in particular.
Paul Chase is director of Chase Consultancy and a leading industry commentator on alcohol and health

An open letter to hospitality leaders by Barak Peled

I am co-founder of a small restaurant group and a hospitality dedicated, independent training and management consultancy based in London. Having been following global developments closely, I ensured my businesses were preparing for the possibility of a lock-down from as early as mid-February. When it was announced, we acted with creativity and dedication to adapt our business model and combined with the government financial support that we received our business is ready to sustain even a prolonged lock-down scenario.

I am well aware many of my counterparts were not as prepared, or as lucky. I know millions of jobs are at risk and the prospect of “half-reopening” using social distancing and other measures had been rightfully rejected by industry leaders. I am certain this crisis will have deep and long-lasting effects on our sector, and I fear the worst is not behind us yet. All of which leads me to write this letter to you. Your many efforts to fight “our corner” are truly commendable. Our industry’s plight is real. Your efforts I am sure had much to do with the extensive financial support measures including the Coronavirus Job Retention Scheme, grants, loans and tax discounts that were extended. I worry though, in the race to protect businesses from the immediate consequences of a full and prolonged lock-down, grievous concerns for the long-term nature of our industry and society as a whole may have been overlooked.

Hospitality is so much more than the sum total of all the businesses, jobs and revenues that make it. Much more than the mere exchange of money for food and drinks. Hospitality is the very experience of being human. Hospitality is courtesy, kindness and the essential thread that holds all of human life together. Life deprived of hospitality has no hope of, nor reason for enduring.

The bell tolls for thee
Independent businesses, big and small, are the very fabric of our society and economy – they underpin the political stability and prosperity we have enjoyed for so long. So intertwined they had become that it can be said with certainty each is involved in all. The death of one business diminishes all others. Those of us who may still have businesses at the other end of this crisis will inevitably find we are working in a much-diminished world to the one we had entered the crisis in.

Bless You is an expression that entered our language when we were in the throes of a different plague. That plague has long vanished, but its imprint on our society survived it by 500 years. Unlike the lifespan of a virus pandemic, fear affects our consciousness, our relations and our society permanently. As leaders of business and industry, we must take courage in knowing a virus, however prevalent and malign, has not the capacity to change our ways of living. Only our decisions, actions and reactions can do that.

Over the past eight weeks or so, our society had rallied in a most moving show of uniformity and self-discipline behind the decisions of our government. The battered old shed that we call the NHS, hitherto the subject of much criticism and some ridicule, had turned overnight into a shrine. One by one we offered our old ways of living – “the old normal” – at the feet of this shrine.

It meant being good citizens to offer our livelihoods, our communities, our familial relations, our faiths, prosperity of our future generations and our very personal freedoms there. It was all meant to be temporary and we were all in this together. We followed the “Stay at Home, Protect the NHS, Save Lives” mantra to a tee, and have done so with an admirable sense of conviction.  Liberty lies in the hearts of men and women
Societies lose their freedom not because a tyrant has taken it away. Usually, it is because people willingly surrender that freedom in return for protection against some external threat. That threat is usually a real threat, but it is being exaggerated. The exaggeration turns into public hysteria, and hysteria is infectious. The public demands action and forget to check whether the cure is worse than the disease.

In the prime minister’s most recent announcement we learnt little in way of a path out of this crisis. We know the costs are mounting, our sector will be last to “relax” and the further duration of the lock-down remains indeterminate. We hear of “scientific advice” and “data” and “monitoring” but very little is being disclosed, and it is hardly ever questioned in the open.

As industry leaders, we have an obligation and a duty to question government policy for its efficiency, necessity and the science that has grounded it. As long as we continue to turn to our mother-state for protection, she will continue to serve us with her best effort at our perceived best interest. And as any parent knows, she will also pretend to have answers she hasn’t.

Public scrutiny, debate and even dissent are not to be mistaken for diseases of a healthy society. These are its very vital signs. Containing the voices of dissent is what makes us a free society, and what better place to begin an inquiry than Bismarck’s old advice – never believe anything until it is officially denied.

Your freedom to move your fist
Grown-up people are also called free agents. They are expected to evaluate risks independently, and provided with education and guidance, to decide on a course of action in line with their moral conviction. Society recognises this “adult-responsibility” and allows for it. That’s why some people still smoke while others choose not to. Some drink and some don’t. Some exercise and some don’t. Although we sometimes feel the “right” to preach a “better way of living” we all agree that, unless they harm others, people should be free to choose their own lifestyle.

How come then on the topic of covid-19, we all insist on behaving like children, who need to be told what’s good and what’s safe for us to do? The result of this child-like behaviour is we are having our schools closed, our churches locked, our businesses shut and our freedom to roam suspended. We are told to maintain “social distancing” (itself an oxymoron) and not to visit our parents. We are advised to fear each other, and we accept it without as much as asking to see the evidence.

So as to add insult to an already grievous injury, we are faced daily with a stream of experts of increasing magnitude, telling us we may have worked ourselves into a right mess. In an age of massive misinformation and fake news, it is important to fact-check and not accept anything as it is served, but when our very own (Lord) Jonathan Sumption OBE, Supreme Court Justice speaks up, I suggest we all stop to take heed. I am not saying we should accept the scientific or otherwise learned opinion of anybody simply because of their level of education or professional achievement. I am simply urging you, leaders of business and industry, to ask the questions, to view the evidence and decide for yourself.

Nature is nation agnostic
The first question that should be asked is “Why are we being told the virus behaves differently in every country?” The assertion is as absurd as claiming there is an Iranian law of gravity, as opposed to a say, a German one – and they are different in operation. The answer to the problem here rests in the many different testing methods, registration protocols and statistical analysis that each country uses. If countries use different methods and arrive invariably at different results – what science point out to lock-down being the most effective course of action?

Naturally, more questions will follow from the answers provided:
– Where do the numbers we use to calculate infection/mortality rates come from?
– How was the Royal College worst model (half a million dead) calculated?
– Were there any competing models that were not adopted, and why?
– Will Neil Fergusson be telling us to burn healthy cows again?
– Have we been counting people who die with coronavirus symptoms together with people who have died of coronavirus? Is this not conflating the numbers?
– We still don’t have reliable test kits – so how do we know the actual infection rate?
– Why will herd immunity not work in this case? (it is standard biology)
– What is the real risk for under-60s who are otherwise healthy and active?
– How many lives will the lock-down end up costing?
– Where is the money to cover for the covid-19 actions coming from?
– How long will it take us to pay it back? Isn't the likelihood of a deep recession combined with increased unemployment, increased taxes and reduced public services, high to produce more deaths than the lives we are saving?
– In the long run, will a significant increase to our national debt not further hurt the NHS (never mind saving it)?

These are only a few of the questions I urge you to be referring to the government when you next write or discuss the matter. To be asking such questions in light of the unprecedented sacrifices we are being asked to make is not an act of dissent – it is an act of love, care and responsibility. Leaders of hospitality, the day is not done. This is our time to make our values known and our voices heard. To have our tables pushed apart, our smiles masked and our communities torn apart while we busy ourselves with rent holidays and furlough technicalities is to let hospitality die on our watch, and with it humanity and society as we know it.
Barak Peled is founder and commercial director at Morso London and a founder of independent training and consultancy company Jist London 
 

Making more money from your marketing by Victoria Searl

Those of us who earned our stripes in operations will know operations, pre-lock-down, had largely remained the same since the dawn of time; deliver a consistently brilliant (and safe) guest experience through personality, empathy and charm, backed up by effective systems and procedures to get the nuts and bolts done. It’s a function that operated pretty consistently across the hospitality industry as a whole. 

As times changed, and business got harder, operators embraced technology (from scheduling platforms to wastage trackers) – and the data they generated. At both strategic and site level, teams have poured over the data trying to understand why things went well, and not so well; chiselling away to find the often marginal gains that turn ever decreasing sales and margin into bottom line profit. 

It’s fair to say operations was as much about the numbers, the tweaks, the next piece of technology that might give us the tiniest edge over our competitors, (and our own previous performance), as it was about showing our guests a good time. Yet marketing, in many cases seemed stuck in a time warp, was where decisions were driven by gut-instinct and executed with a very broad brush. 

And this crisis has highlighted marketing is still very much thought of as an expense rather than an essential investment, shown in part by the number of marketers on furlough. And yet, the marginal gains found in our operational data, exist just as clearly in our marketing data; if only we’re prepared to look for them. 

Imagine if I told you there was an operational system that could significantly increase footfall without sacrificing margin; or a system that compelled people to return again and again, without wasting precious promotional spend; or a loyalty scheme that kept users engaged without the need for constant giveaways – most operators would grab these systems with both hands. 

And yet, similar sorts of gains can be achieved with the systems that already exist in many marketing functions – when they’re used correctly, or as the developer intended. So here are three of the biggest drivers of acquisition, conversion and retention (and the good news is, you’ve probably already got them). 

1.Website and online
Imagine your website as a flower, attempting to lure in a constant stream of bees. But how do those bees know which flowers (or websites!) hold the tastiest nectar? Just like some of the most successful flowers have evolved to develop incredible fragrances, or wide-open petals, which make it easy for the bee to work out where best to focus its efforts; we can use Search Engine Optimisation (SEO), or targeted online ads to highlight our own best features; making it easy for your potential customers to know where to focus their efforts.

And Google doesn’t just help people find your website. Having a correctly set-up and optimised Google My Business profile puts your brand’s nectar front of mind for anyone opening a map on their mobile device. And given there are 24.9 million searches of “restaurants near me” taking place every month, (according to SideDish Media), being correctly listed and optimised is a really important way of getting seen, at exactly the time people are searching and ready to make a decision. Kind of like your flowers giving their petals a little shimmy to attract our thirsty bee. 

But the benefits of getting people to your website don’t end at that one search. By using pixels to track your visitors, you’re able to directly re-target them (and people who share the exact same characteristics as those interested visitors) on a range of platforms such as Facebook, Instagram or LinkedIn. 

2. CRM
Your CRM system is a really useful place to divert and hold the data coming into your business, continually enriching the profiles of your database. And this data can help you learn not only who your most common customers are, but who your most valuable are, in terms of recency, frequency and loyalty. And now you’ve used your data to get properly (if virtually!) acquainted, use what you know about their interests and behaviour to give them compelling reasons to stay engaged, and most importantly, turn interest into action – whether that’s a booking or purchase.

Dhilon Solanki, UK director of Sprout CRM, explains: “How you manage and leverage your data will ultimately drive long-term loyalty and advocacy for your brand. It’s crucial to understanding their interests, behaviour, frequency – all the key ingredients to create a richer customer profile. Strong engagement, combined with targeting the right message, giving a reason to visit/purchase, at the right time generates repeat customer business – something that is highly sought after now and will be of utmost importance when restrictions start to be lifted.”

But misuse of CRMs can damage engagement and conversion. As tempting as it may be to blanket send a message to the whole base, this lack of personalisation or relevance will quickly erode engagement, turning your oasis of opportunity into the driest of deserts. 

3. Social
As the crisis hit, many brands paused their social media through, what would be understandably seen, as financial necessity. However, social media is the emotional, up close and personal connection you have with a brand, and those who paused it were effectively saying “we don’t have anything to say to you as long as we’re not able to sell you something”; which is the equivalent of the friend who stops returning your texts when you stop offering them a lift to work. 

But it’s not enough to plonk pictures of food, with cliched messaging, encouraging the user to “enjoy” or “try” your wares. Brands must create and maintain a strong and engaging presence in the most creatively authentic ways. That may feel a little odd while venues remain closed, but will pay dividends as restrictions (whether government or self-imposed) start to lift. 

Marketing consultant Vikki O’Neill says: “At a time when your existing guests and target market are spending more time than ever on social – where are you? It’s the perfect opportunity to be interactive, authentic and creative – and why wouldn’t you want to know how your guests are feeling or thinking? I’ve seen an increase in every social stat; from 120% in engagement, a 1,000% increase in social profile visits, from regulars; but also people who didn’t know the brand but had been exposed to our content and were wanting to know more. This has helped drive a 36% increase in Google searches for one particular brand in the five weeks since lock-down – all working to maintain our focus on acquisition and conversion once we’re through the other side.” 

While operations, finance and marketing are often, inexplicably, not only on different sides of the fence, but also in completely different fields, a consistent approach to technology and data throughout a business can drive success across all functions. 

And with a combination of both marginal and more significant gains maybe being the difference between sink or swim in these coming months, there’s never been a better time to use what’s within the easiest grasp. 
Victoria Searl is an industry marketing director and founder of Data Hawks, a hospitality data consultancy that finds and joins up your data, turning it into sales, loyalty and return on investment. Contact victoria@wearedatahawks.com

The hospitality sector needs room to breathe by Philip Sandzer

The proposals from Jonathan Downey and his #NationalTimeOut campaign are a very positive step that could work for all sides over a period. The upside for the owners and investors being occupied space and basic running costs covered through service charge payments, with potentially a full income stream in 2021. The key to success, however, is convincing the lenders at the top of the tree.

Clearly, the early beneficiaries are the operators, but they have no clue at this point what kind of business they will have when they reopen. And when is the crucial question. While the UK government has yet to publicly reveal its plans, it seems certain social distancing will apply and will therefore have impact on capacity. Less clear is when vertical drinking will be permitted, which would provide a welcome boost to the fortunes of many operators, given it is a huge revenue stream in the summer months.

Limits on capacity are not the only challenge though. Will operators be able to source food at the same cost? Are their staff still around? What will spend be with so many people financially worse off? And, even for those that can continue to eat and drink out, will they want to? A recent YouGov poll suggests the lock-down is having a detrimental impact on how consumers think they will behave in the future. Of those surveyed, 57% are uncomfortable visiting a restaurant; 63% are reluctant to go to a pub or bar; and 58% are apprehensive of visiting coffee shops.

Operators need to have the breathing space to work all this out, to plan for the new normal, and then get used to it in practise. And what of the other side of the coin – landlords? Landlords are ultimately responsible for collecting rent for their shareholders and to service their debt. But they do need an income, which is where the proposals signed jointly by the British Retail Consortium, the British Property Federation and Revo come into play. If the government adopts the Furloughed Space Grant Scheme they have suggested, liquidity will be injected back into the property sector, creating certainty for everyone involved.

But the long-term relationship between landlord and operator will still need to be resolved, regardless of whatever measures are introduced by the government in the short-term. A logical first step is to shift the emphasis from repaying deferred rent over a short-term period to something more like two or three years. Taking a longer-term view and working collaboratively with landlords increases the chances of deals being concluded successfully for both parties.

Surely it would be in the interest of the landlords and investors to take this approach as we work together on a new period of genuine recovery? By doing so, we as professional advisors can do our jobs properly by adding value to clients on all sides. This suggestion is not about kicking the can down the road – it simply reflects the need to give genuine hope and encouragement to our amazing, entrepreneurial restaurant operators as they get back open and trading.

It also provides the other side of the equation a real chance to keep their investments intact, honour their banking covenants, and ultimately help to resuscitate our once thriving hospitality industry. The alternative is swathes of empty premises with little prospect of income for the landlords, which in turn lead to bad debts and worthless unpaid loans.
Philip Sandzer is co-founder of Shelley Sandzer

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