By Luke Butler, managing director of Hastings People
The American hospitality industry has long been a source of inspiration for Australian operators and their venue offerings. Luke Butler, MD of Hastings People reports on a recent immersive trip to the US.
Hastings People opened a US outpost around nine months ago and I spent eight weeks in LA and NYC meeting with new and existing clients, while also immersing myself in the market to better understand how it works.
The trip length offered the opportunity to better understand how people use hospitality venues, allowing for repeat visitation to certain areas or venues; a luxury that often isn’t possible during shorter stays.
Here is what I observed:
- The market is massive. It’s no secret that the US population vastly outnumbers our own, but the scale is hard to fathom. There are more people in California (around 39m) than in the entirety of Australia, and therefore there is a huge number of venues. The disparity between the quality of venues is also vast, with many seemingly poor venues in terms of presentation, product quality and location, still able to survive, or even do well. The great thing is that if you do things well, with a focus on quality, you generally stand out.
- The talent pain is the same. Almost every meeting I had centred on the same people problems. The lack of quality talent, particularly in the mid-ranks, was really challenging operators who struggle to attract salaried staff members. The tip culture means that many choose to stay in tip-earning roles, rather than transition to full time management positions, and the cost of living pressures are further impacting this.
- We’ve already imported the best, pretty much. I didn’t see anything in the states that we haven’t widely adopted from a product perspective here in Australia. The American staples are well presented here with the exception of a couple glaring holes. BBQ. Like proper BBQ. We could do with some more of it because it’s delicious. Quality pizza by the slice would also be welcomed here, as would some excellent sports/dive bars, as long as they serve deep fried pickle chips a la Barneys Beanery in LA.
- We’ve already exported the best. Aussies are killing it! The imprint home-grown operators are having over there is amazing to see, particularly in the café and premium casual world, where a number of groups have formed to deliver food and beverage led operations that offer menus we’re familiar with here, yet stand out over there.
- Private clubs are a big thing. The population allows for a proliferation of operators in this space, and I struggle to think of many local offerings that are similar to what I experienced over there. The venues are very similar to traditional multi-outlet venues we have here, the primary difference being that you need to be a member (or guest of a member) to attend. It’s a venue style that is increasingly growing in popularity in the US, that is yet to take off here. The subscription revenue model could have legs locally but perhaps we don’t have a big enough population for the members club approach, yet.
- They don’t do pubs like us. The bar culture in the US is pretty great, but they just don’t have pubs that we would consider to be of a similar ilk to those we love. I don’t for a second think they are trying to imitate our venues, but it struck me just how different the pub equivalent is to our pub experience.
Generally it is pretty difficult to compare the two markets given the difference in population, however the well-worn practice of applying elements of what works in the US to the Australian market could still offer upside for a range of operator.
This piece was first published in the December issue of Australian Hotelier, which you can view below.