In a City of Sydney webinar, Justin Hemmes, CEO of Merivale, discussed how he thinks the hospitality industry is faring post-covid and in light of tightening economic conditions.

On Tuesday 9 May, Hemmes participated in a virtual Q&A titled ‘Transforming your business into a powerhouse’ as part of the City of Sydney Reboot webinar series aimed at small business operators.

In the session, Hemmes was asked about what he thought of the state of hospitality post-covid, and he was effusive with his praise for both its current strength and potential.

“We find ourselves in the most incredible situation. I’ve been in this business for 30 years, and for me, these are the most exciting times I’ve ever seen.”

Hemmes explained that before covid, Sydney nightlife in particular was centred significantly around Friday and Saturday nights, but the lockdowns made people re-prioritise going out, creating a week-round night-time economy.

“It’s brought out our innate passion and need to connect with others, because we had that stripped from us for two years to varying degrees. But as humans we need connection with family, with friends, with loved ones, and meeting new people. And now that desire has come out so strong because of covid.

“So hospitality has had a massive reset button, and I feel, certainly from when we opened up after covid, people were almost ecstatic to come into the venue and they were cheering to be meeting over a meal and a drink. It gave the hospitality industry an opportunity to really invest in that behavioural change.”

To ensure that there is enough on offer to keep the seven-day night-time economy going, the CEO said Merivale has invested heavily in longer and later trading hours, more shifts for employees, and live music and other forms of entertainment. Hemmes said it’s imperative that hospitality operators keep their offers lively to keep this cultural change towards going out any night of the week intact.

“I really feel, for me, it’s like the ‘Roaring 2020s,’” stated Hemmes.

“We have to really ride this wave to keep the momentum going for years to come.”

Economic headwinds and customer experience

With cost-of-living rising, inflation not yet under control and interest rate increases affecting many Australians, smaller hospitality businesses are the most worried about the current landscape and how to navigate their businesses through it. Hemmes referred to how Merivale handled a similar situation during the Global Financial Crisis (GFC) of 2008, and the opportunities it afforded the business.

“I’m the ultimate optimist, so I try to find an opportunity with everything. I remember the last time we had an economic crisis back in 2008, and everyone was talking doom and gloom, I grabbed my senior people together and said ‘We’ve got some really exciting times coming up’. I said, ‘We’re actually going to become an employer again.’ Because prior to that, if someone turned up and wrote their name correctly on the application form, they got the job. Now, we can actually recruit the best.”

While the CEO acknowledged that spending habits do shift in tough times, he noted that F&B venues stayed fairly resilient – as long as the customer experience was top-notch.

“When you do come across troubled times, the better experience you can give the customer, the busier you will become, because people want to be in a positive and uplifting environment. So if you do your job well and create the best environment in your own little ecosystem, then I actually think you’ll become busier, because the pie gets smaller, but you can get a bigger piece of it.”

Hemmes stated that a tougher economic environment meant that the best operators will in fact evaluate how they spend their money, making for a more agile and better-run business in the long term.

“Because we become lazy and spend too much on this and that, and so you be careful with your spending. But invest in your people and the experience, so don’t take any shortcuts there. And you’ll come out on the other side stronger, which gives you an even better base to go into the next stage of business.

“You may have to adjust your pricings to make it more affordable. You’ve got to be agile and you’ve got to work harder, but you will reap the benefits.”

Merivale operates more than 80 venues in New South Wales and Victoria, with the most recent addition being Oti’s, a pizza-by-the-slice proposition that opened in the ivy complex yesterday.

Vanessa Cavasinni

Vanessa Cavasinni is the managing editor of Australian Hotelier and Club Management, trade publications for the pub and club sectors respectively. Vanessa has been at the helm of Australian Hotelier since...

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