Skip navigation Scroll to top
Scroll to top

The reopening of hospitality

10 July 2020

The Brief - LGTV - Hospitality - 1200

Lucy Jones, Senior Marketing Executive

In conversation with The Ned, Loungers PLC and Shepherd Neame

When the Prime Minister made the announcement that hospitality venues in England would reopen from Saturday 4th July, the relief was palpable. Even though restrictions remain, a degree of normality has resumed. Hospitality was one of the hardest hit sectors by COVID-19: lockdown meant that restaurants, pubs, bars and hotels were abruptly closed down for months. Employees were furloughed; events and weddings postponed or cancelled; jobs have been lost and businesses have suffered. Nevertheless, this sector is known for its creativity, innovation and resilience. We ask experts in the industry their reflections on the pandemic and what the future may hold.

The hospitality shutdown

The emergence and spread of COVID-19 was rapid. At the beginning of the year, the topic barely reached headlines; instead, we were otherwise engaged with Australian bushfires, tensions in the Middle East, the US and China trade war, and Brexit. Come March, this new concept of 'lockdowns' had been introduced, and were being implemented by governments around the world. It was an impossible situation to predict and even to truly understand the gravity of. Ten days before the UK lockdown began, Jake Bishop, Co-founder and Director of Loungers PLC, an operator of more than 140 cafés, bars and restaurants across England and Wales, sent an email stating that there wouldn't be a bar or restaurant in Europe open in ten days. "Which seemed as absurd as saying that aliens would be landing," Jake added. It seems unlikely that anyone had ever realistically expected a wholescale shutdown of hospitality pre-pandemic, "And anyone that tells you that they had is lying!" is the perspective of Gareth Banner, Managing Director of The Ned, a hotel and private members' club in the City of London. Keeping an eye on the horizon and ensuring you are as protected from a risk management perspective as possible is a top priority for any business, "But a global pandemic was certainly not in the handbook," says Bishop. 

Pivoting during lockdown

Despite the lockdown, many hospitality businesses quickly pivoted their models. Restaurants arranged for delivery or takeaway meals, bakeries created afternoon tea hampers, pre-mixed cocktails were prepared by bars. Whilst Shepherd Neame, Britain's oldest brewery, had to close the doors of more than 300 pubs, they were able to find a way to keep going: "We have maintained our production facility to supply to the supermarkets and those few export customers who are still trading." They even went one step further and "teamed up with the Copper Rivet Distillery to make hand sanitiser for the emergency services."

The importance of maintaining a relationship with customers was also of vital importance to many hospitality businesses. Although Loungers PLC introduced a takeaway service to their model, they veered away from delivery. "We wanted to maintain our hospitality interaction and stay in contact with our customers. It was great to see so many regulars coming in, not only to get their Lounge fix but also to see their favourite Loungers staff." One of the main learnings from lockdown for The Ned was very much about that customer trust and sentiment, something that would continue to play out in reopening: "Just because the government announces that a business can reopen, doesn't necessarily mean that people will feel ready to return. We have to, once again, earn the trust of our guests and accept it may take some time."

Will hospitality 'bounce back'?

Over the reopening weekend, the media was filled with photos of patrons returning to their local pubs and bars; the day was dubbed 'Super Saturday.' Everything seemed as it was before. We know that the reality however is quite different, the rules on how venues are allowed to open for example. The Ned's Banner doesn't think there will be a full recovery in hospitality for quite some time: "Until there is a vaccine, I don't see how any of us can be confident that COVID-19 is a thing of the past and the hospitality sector remains highly exposed to the associated risks." As we see in Leicester, the first UK city to be put in local lockdown, there is still a long way to go.

However, as we have all learnt over the past few months, the value of human interaction is immeasurable when it comes to our wellbeing. Bishop says, "The belief from customers and staff is that hospitality will never go away and Lounges and Cosy Clubs, like most other businesses, will be making every effort to honour hospitality in its purist form. I'm optimistic about the bounce back." Likewise, Banner is "a strong believer that food and drink is social currency, and human beings will also value physical connection and interaction in well-designed environments." It may be that what we know as hospitality will have to change. Banner thinks that "this period will lead to innovation and new concepts that will shape the future of our sector."

What the future holds

As we have seen with the reopening of hospitality, as with many aspects of life now, things will not be as they once were. With no vaccine on the horizon, operational changes – something as simple as ordering your food – will be here for many months to come, perhaps longer. They may even become a permanent fixture as life shifts. Bishop thinks, "The raised sense of consideration on every detail which some have labelled a 'Reset' will be beneficial for hospitality as a whole in the future." The change in behaviour, such as remote-working, is also likely to have a big impact; Banner believes the landscape will be changed forever, "In London alone, we have already seen some much-loved hospitality institutions close their doors, never to reopen."

Technology will also play a big part in the future of hospitality and Banner reflects on its role during lockdown, "A big part of our business is the private members' club and, whilst the physical premises are very important, we have seen that the membership community can thrive digitally through virtual events and content. We have found ways to create experiences in people’s homes by collaborating more closely with brands that have also had to adapt their strategy."

The overriding sentiment from speaking to experts within the industry is one of positivity. While it has been challenging, and there are still challenging times to come, we know that hospitality will rise to the occasion. Bishop's view is: "Our industry is made up of incredibly tough, resilient, hard-working people with great spirits, it may take a little time, but I'm sure we can come out of this stronger than ever before."

With thanks to our contributors: Gareth Banner, Managing Director of The Ned; Jake Bishop, Co-founder and Director of Loungers PLC; Shepherd Neame.

Return to Insights

This communication is provided for information purposes only. The information presented herein provides a general update on market conditions and is not intended and should not be construed as an offer, invitation, solicitation or recommendation to buy or sell any specific investment or participate in any investment (or other) strategy. The subject of the communication is not a regulated investment. Past performance is not an indication of future performance and the value of investments and the income derived from them may fluctuate and you may not receive back the amount you originally invest. Although this document has been prepared on the basis of information we believe to be reliable, LGT Vestra LLP gives no representation or warranty in relation to the accuracy or completeness of the information presented herein. The information presented herein does not provide sufficient information on which to make an informed investment decision. No liability is accepted whatsoever by LGT Vestra LLP, employees and associated companies for any direct or consequential loss arising from this document.

LGT Vestra LLP is authorised and regulated by the Financial Conduct Authority.