Covid-19 has crushed the hospitality industry like a mack truck rolling effortlessly over a bicycle - and we need YOUR help to pick up the pieces.
What many people don’t realise is that the business model of most hospitality operations is well and truly [email protected]#$ed, and that was pre-covid!
Here’s a quick rundown of the numbers involved in running a restaurant to illustrate just how close to the edge your favourite restaurant probably already was before a global pandemic shut them down.
Cost of food and beverages - 35%
Wages - 35%
GST - 10%
**holy shit that’s 80% already
add to that RENT / utilities / repairs & maintenance / accounting & admin / advertising / insurance / compliance.
With numbers like these it’s damn near impossible to even think about making a decent profit in hospitality. Operators would be persecuted if they dared to charge the prices required to make a profit margin viewed as the norm by most other industries.
Many operators are happy to just break-even to be able to do what they love, but that doesn’t leave much capital in the business to get through tough times. When the first lot of restrictions were imposed on restaurants our industry took a huge hit because while the amount of customers allowed into venues reduced dramatically (along with revenue), they still had huge expenses coming out as they scrambled to negotiate lease terms with landlords, negotiate with suppliers, decide the best way to utilise staff etc.. all the while waiting to see what the government announced next to see if they could proceed forward or ‘call it a day’. We lost a lot of good establishments early in this Covid nightmare and there are plenty more that are only just holding on.
Enough doom and gloom - the point of this blog is to let you legends know exactly what you can do to help your favourite hospo establishments survive now and thrive in the future.
NO-SHOWS ARE A NO-NO (ALWAYS, BUT ESPECIALLY NOW)
This is a really important one.. At the time of writing this, restaurants (depending on where in the world you are) are starting to gradually re-open with strict restrictions on the amount of customers allowed in the restaurant at any one time. If you are lucky enough to secure a booking make sure you show up. It wouldn’t have been an easy decision for the owner of the establishment to decide to open up at all, in many places in Australia and New Zealand you are only allowed to have 10 customers in the venue at a time, restaurants rely heavily on a high volume of customers coming through the doors in order to be profitable. No-shows will literally kill some businesses who have been brave enough to re-open with these restrictions in place.
SPLURGE - IF THERE’S AN EATERY THAT YOU WOULD BE SAD TO SEE GO, NOW IS THE TIME TO SUPPORT THEM.
If you are in the position to be able to do so, now is the time to splurge! Please don’t just order a cup of tea and sit in the restaurant for an hour. You are taking up one of the few seats available for the establishment to have a crack at making some money and keeping their dream alive. Supporting restaurants now will help them overcome these unprecedented times and continue to be there to serve you for years to come.
AVOID UBER EATS IF POSSIBLE
Uber Eats (and menu log) take a whopping 30% commission fee from all orders. As outlined above, hospitality operations simply don’t have any room to move within their already tight margins, giving 30% of every order to Uber Eats just isn’t sustainable. Where possible always try to call restaurants directly and enquire about their delivery or pickup options, sometimes this will work out to be cheaper for you too.
LAST BUT NOT LEAST - DON’T BE A DICK (THANKFULLY THIS IS ONLY AIMED AT A SMALL PERCENTAGE OF PEOPLE)
Speak to anybody who has ever worked in hospitality and they will be able to give you many examples of times when they were degraded, put-down, abused, basically just treated as second class citizens - usually over nothing more than a tiny mistake. Now that much of the world has been in some form of isolation without the privilege of being able to visit their favourite restaurants it could be a great opportunity for people to realise how thankful they are for their favourite hospo spots that they might have taken for granted in the past. We as an industry are hoping that you guys have missed us as much as we have missed you!
This could be the reset that our industry has so desperately needed for such a long time.