By Lilly Drumeva-O’Reilly
Living in times of a pandemic puts a lot of stress on our personal lives and business. This time I decided to interview a leading American tourism expert on the subject.
Bob Burke is a recognized food and hospitality industry leader. He is known for creating and recreating award-winning, profit-generating restaurants, such as “Ovation”. His expertise lies in operations, strategic solutions, marketing and financial analysis. He was President of “Pat Kuleto Restaurants”, the “Piatti Restaurant Group” and “Real American Restaurants”. He was also President of the “Gordon Biersch Brewing Company” and successfully engineered the sale to an investor group in Las Vegas, NV. He has partnered with numerous celebrity chefs including the famed Chef Michael Chiarello in order to take successful restaurant concepts to new markets.
Bob Burke was invited to visit Bulgaria as one of the strategic advisors of the Bulgarian Entrepreneurship Center foundation. His mission was to consult major tourism resorts such as “Albena” and to give lectures at specialized colleges and schools.
Bob, it was a pity we could not welcome you to Bulgaria last year, because of health reasons. Now, your trip is put on hold again because of the COVID -19 situation. How do you cope with the isolation? How do you protect yourself? What is your survival strategy?
Yes, disappointed for not being able to come to Bulgaria last year. I had attended a dinner with Larry Biehl, hosted by Bogomil Balkansky, and met many Bulgarians now living in the US. They gave me insight as to what was then the current state of affairs, which got me excited to experience it first-hand. Perhaps next year-
I am coping like most everyone else, meaning shelter-in-place. So, besides walks and biking, I venture out very little. Protection is being smart—social distancing, surface cleaning, vigorously washing of hands, etc. Groceries and necessities are delivered—thanks, Amazon. I do spend a fair amount of time consulting with my clients as this is a unique period in time. We are looking at new ways to stay open and survive. My personal survival strategy—stay the course with shelter-in-place until enough testing and tracing data proves it is OK to venture out. Hopefully, this will all pass sometime soon.
“Tourism” is the industry which is hit the hardest by the Coronavirus crisis. What is going to happen in the near future? How could hotels and restaurants survive?
Tourism is changed forever. The World Tourism Council has warned that COVID-19 could cut 50 million jobs worldwide in the T&T industry. It could take a year at least to recover, depending on what restrictive measures are put into place. International air travel has come to a halt. The cruise industry has been upended and considered risky by many. The trend of “staycation” is growing. Many hotels are promoting local tourism. For example, high end hotels in Paris are now offering, to only the local population, large discounts for overnight stays. In San Francisco hotels are providing the City with beds to house front line workers, additional beds for hospital patients, and rooms for the homeless where tent camps are at risk. The city of SF is paying hotels a nominal fee for this service. SF area hotels will be hit harder but recover at a faster rate than the national market. Revenue per room is expected to drop from $206 to $87, a 57% drop. The short term pain is being felt more acutely here because all three kinds of travel—corporate, leisure and convention – are being impacted simultaneously.
Many restaurants offer takeaway services. Are they an option in order to survive during the crisis? What else could they do?
A number of experts agree with the general consensus that you are very unlikely to contract COVID-19 from takeout meals and there is no known risk of transmitting COVID-19 thru food. Many restaurants have been forced to pivot from their original menu and price points to a more limited menu that is affordable. The good news is you have world class chefs now preparing pasta dishes, burgers and soups that are incredible. Buzz words you now hear are “No Contact Food Delivery Option”. Here is how it works: you download the restaurant’s app and select “leave order at door”, a seal is applied to the meal so you know it hasn’t been opened, the driver leaves the meal on your doorstep- no interaction with the driver, payment and tip are already handled when you placed the order online. Delivery has ramped up considerably with people not being able to leave their houses. Additionally, many restaurants have expanded their “takeout” service to include discounted wine, beer, and in some locations “batch cocktails”. Others are adding needed and necessary goods to their space, including cooking supplies, cleaning supplies, paper products, fruits and vegetables, milk, etc. A One Stop Shop. In the near future when restaurants start reopening you will see fewer tables (50% less), bars with limited seating, disposable menus, servers wearing gloves and possibly masks. Not great. No one really knows how long it will take for people to feel comfortable again going out for dinner/drinks. Some predict 20-30% of all restaurants in the US will close this year, and perhaps 75% of all brewpubs.
Many people in the hospitality sector lost their jobs. What can employers do? How can they keep the workers, because they will need them in the future?
Most hotels and restaurants were forced to close, furlough their staff, and direct them on how to obtain unemployment benefits. We are currently in Phase 2 of what is termed PPP (Payment Protection Plan), which is a “loan” program thru the SBA and your bank. They are providing small businesses (under 500 employees) up to 2.5X’s their monthly payroll to be used for payroll (bringing back staff), rent and utilities. You have to begin using the funds within 10 days of receipt and the loan expires in 90 days. If you follow this, then the loan is forgiven. There are still many details to be worked out and loopholes to be closed. They are already talking about another round of additional money possible for the restaurant industry in particular. Almost all US restaurant workers rely on tips to supplement their hourly pay. It has yet to be determined how that will factor into future government funding.
You developed special know-how for the hospitality sector, which you call the “5 Ps”. Tell us more about it?
The idea was to have a very simple way of thinking about your restaurant business that covered all bases and easy to remember.
The 5 P’s are Profit, People, Product, Promotion, Physical Plant. I later added Plussing the Guest. Owners and managers can follow this script during their monthly meetings:
Profit—How did we do this month? What’s working, what’s not? Top line sales, cost of goods sold, expenses, bottom line profit/loss? Quick data points that paint a financial picture.
People—How are our staffing levels, hiring needs, turnover, staff reviews, training and development?
How can we staff our restaurant/hotel with the Best of the Best?
Product—Review of menu sales by item, customer comments, plate presentation, price/value, quality of product coming in the back door, cost of sales.
Do we have a dynamic and enticing menu that is fairly priced and customer friendly?
Promotion—What is being done to increase the number of people walking in the door, social media presence, advertising & PR, staff interaction with the guests?
How are we perceived by our guests? How to add more fans?
Physical Plant—repairs, maintenance, wishlist, cleaning guidelines and adherence, safety standards in place.
Does everyone have everything needed and in good working order to give the guest a quality experience?
Plussing the Guest—How to take the guest experience to the next level? What can we do to “Wow” the guest? What will they remember most upon leaving?
Examples: Hotel minibars that have unique, one-of-a-kind chocolates and treats that are all complimentary, restaurants provide kids with a mini pasta dish upon being seated to help parents relax and enjoy, golfers coming off the course receive an ice-cold face towel to end their round.
“Tourism” is a major sector of the Bulgarian economy, a big revenue source. Are you familiar with our country? Could you give a few tips to our hotel and restaurant owners?
Although I do not know specifics, what I do know is that Bulgaria is tourist driven. A few tips—
Be very selective in hiring, train, train, train, provide a unique experience, make the guest feel extra special, deliver on your promise.
Foreign visitors to Bulgaria will probably have to wait for a longer period. On the other hand, this is an opportunity for hotels and restaurants to focus more on the domestic market and improve their services. What is your opinion?
Agreed. A good time to regroup and be laser focused on your local customers. As mentioned earlier, develop a marketing plan around locals. Make staying close by an adventure. Staycations offer a new and local experience to area residents offering unique prized services and activities that allow area travelers to maximize vacation time, avoiding long travel times or the hassles of traveling abroad. Locals will then become your biggest cheerleaders. Also, grow your web-mobile presence. More and more people are using cell phones/tablets to plan vacations, make travel arrangements, pay for goods. The tourism sector must be “social, local and mobile”.
How do you think the COVID-19 crisis is going to affect travel in the future? Many countries will keep some of the restrictions and safety measures. Donald Trump just banned emigration to the US completely?
People are going to be cautious and reluctant to jump back in to travel, going out to bars and restaurants, getting on a cruise liner, etc. This will take time. Remember, it took the airlines approx. 3 years to get back to normal levels following 9/11. You may see restrictions on travel between certain hot-spot countries, or even car/train travel across borders. There were 1.4 billion international tourist arrivals in 2018. With travel halted recovery will take time. But it will come back—too many livelihoods depend on it. More than 10% of the global workforce is employed by the tourism industry. Travelers are going to expect a disinfecting regime in hotels, restaurants, airlines, trains, etc. Personal space becomes important. Hotels, airlines and especially cruise lines will have to determine how to give travelers personal spaces they can control. You may have to consent to temperature taking or having to show negative COVID-19 testing.
In the short term, think drivable local trips to vacation rentals. Airbnb type places will do very well, especially in remote settings.
How is life going to be after COVID-19? Will people be afraid to socialize? Will most of the activities happen online? Could tourism be done online? Famous museums such as “The Hermitage” in Russia offer free online tours…
International travel is going to open slowly. Restaurants and hotels will be suffering for at least the next year. People will change their eating/going out habits. Packed bars will be a thing of the past. But we all have a need to socialize. So, perhaps the 6’ social distancing rule will be phased out and small groups will begin to gather again. It may take some time for large sporting events to come back, but they will.
Yes, online is and will be an alternative to travel. It may be online or thru virtual reality. You can now explore all the great national parks, museums, art exhibits online. One of the biggest contemporary art auctions just took place, 100% online, and they recorded record sales.
Looking forward to Post COVID-19.