By Kunal Sawhney, CEO of Kalkine
A new era for the UK hospitality industry is about to begin, once the government gives a final nod to re- open pubs, restaurants, cafes, and other hospitality venues on 4th July 2020.The industry got a reason to cheer after Prime Minister Boris Johnson’s announcement. The indus- try, which was struggling for survival has finally got some hopes to stand back on its feet, but this might come at a cost. All establishments are expected to keep records of all their guests to enable contact trac- ing and maintain adequate hygiene as per government guidelines. On the top, this relief comes with a strict warning that the re-opening permission is ‘conditional and reversible’.
‘I’MPACT OF THE LOCK-DOWN
It is concerning for the industry as well as for the economy that the industry, which is amongst the top employers of the nation and churns bil- lions in revenue every year, is on the verge of a collapse.The UK pubs and beverages served in these pubs contribute billions of pounds in govern- ment tax revenues as well. But around 47,000 of these pubs across the country have remained closed since March 20, 2020, which means there has been no revenue for these establishments and for the government unless they were to work around an online business model. Further, it was estimated that it would have costed these pubs almost £100 million every month in cash, during this period of the lockdown.
‘I’NTRICATE CHALLENGES PUBS MIGHT FACE WHEN THEY RE-OPEN
‘Embracing adversity as a chance for the opportunity’ could be the new mantra for the industry players as they plan to re-open.Though, re-opening might come with stricter rules and guidelines to comply but that is not
going to be the only challenge they are expected to face.There could be restrictions imposed initially on the number of guests allowed inside the premises coupled with a possibility that they might not see enough guests visiting their pubs initially.
Thus, what will matter here would be how these businesses attune to have an innovative and a changed business model. Moreover, one big relief was already offered to the industry when the social distancing norm was relaxed to ‘one metre plus rule’.This was something the industry was in desperate need of, otherwise only one-third of these pubs could have taken the advantage of the re-opening announcement.
‘I’DEAS FOR PUB-OWNERS
Adopting ‘Digi-Business’: Though pubs will have to maintain records of all their guests and will have to comply with strict government guide- lines, they can rely on technology to help them run their business more efficiently. Pubs can develop their own app to maintain records of all their guests, which enables contact tracing.The app can help further by offering guests a hassle-free check-in experience, enabling them to pre-booking their slots reducing wait time and book orders on-line.This will also help managing the required level of social distancing.
Capacity Management and Seating Modalities: Some more ideas these pubs can think to implement include, re-arranging their sitting arrangement, modifying washrooms to maintain social distancing, having separate entry and exit doors, ensuring contact-less payment systems, encourage online order booking, set a limit on maximum number of guests inside the premises and even start serving take away orders (if not done so far).
Moving from Traditional to Disruptive Ways: More specific guide- lines for the pubs are expected to be issued by the government at a later date, but if we have to take clues from the countries where pubs are already open, it appears that Sweden never went into a complete lockdown and relied heavily on its citizens to follow social distancing norms. In Australia, pubs opened with a three-step plan, first by limiting the number of guests inside the premises to 20 and then gradually increasing the num- ber thereafter. Italy on the other hand, opened its hospitality sector with
stricter surveillance, however, many cities allowed these establishments to extend their outdoor open spaces for free by closing the sub-streets.We still need to see how the new normal for the industry will look like, but it (definitely) needs to be disruptive compared to the past.
‘ALCOHOL FOR THOUGHT’ AS YOU WOULD WANT YOUR GUESTS TO ENJOY THE DRINK!
Though, city pubs in the UK have limited space and the crowd is over- whelming, pubs on the countryside are better positioned with lower foot- fall, open gardens, and extra spaces to manage their guests. However, the challenge is not just going to be limited to comply with the government guidelines, but also to adjust their business models to the new normal. Remodelling the long-established business traditions is not easy and will need a lot of new strategies to keep the business running.They would also further need financial assistance from the government to survive – as per British Beer and Pub Association (BBPA) only six out of ten establishments would survive past September without any further support from the gov- ernment.Though the government have announced steps of financial sup- port during coronavirus lockdown, but a stretched handholding will be needed in the future as well.
Let us take a glance at some biggies of this industry in the UK amid the prevailing scenario:
JD Wetherspoons Plc (LON: JDW) had already announced that it would open its 874 pubs across the UK and Ireland on July 4, on getting approval from the government.
Marston’s Plc (LON: MARS), begun brewing well in advance to fill its 1,400 pubs and bars, anticipating the government orders.
Owner of the famous brands, Harvester and O’Neill’s, Mitchells & Butlers Plc (LON: MAB) has secured £100 million of new funding and is all set to welcome guests with safety becoming the top priority at all its sites.
Others like Greene King Plc has launched “Pub Safe” and will be reopen- ing with five commitments for customer and team safety.
Disruptive business ideas can untap diverse opportunities, do not ‘Quarantine’ your operations to a ‘Restricted Business Mode’.