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Hospitality learns agility is key during lockdown

Chris Petts Chris Petts

We all know the challenges that the hospitality sector faced in 2020. Chris Petts looks at how we've helped our clients stay agile and ready for anything when it mattered most.

The UK hospitality and leisure sector has always been susceptible to external factors, including economic conditions, changing consumer demands and agile competitors, but COVID-19 has changed the sector in ways no-one could have foreseen.

As we approach the end of the latest, and hopefully last lockdown, smart operators are reviewing their portfolios, offerings, and footprint to ensure that they reflect what the new consumer landscape looks like.

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The state of the hospitality sector

The rise of the staycation initially benefitted hotel and holiday-home operators, but the various and continued lockdown restrictions have called time on that initial good news.

The most-affected businesses have been city centre-based, particularly high-density office areas reliant on commuters. These are ordinarily a key component of the city centre economy, but are going to be the last to reopen and face prolonged trading restrictions.

The general view is that city centres may never see levels of footfall return to pre-coronavirus levels, whereas suburbia will benefit.

Various government support schemes have assisted these businesses to survive during lockdown. However, they are now faced with a new round of challenges as they reopen.

Aside from servicing this additional debt, the consumer market will be a different landscape and one that is hard to predict. What is clear, is that businesses which plan, pivot and act quickly will be best positioned to take advantage.

The ability to out-perform the market will depend largely on how they can evolve to meet the demands of the customer, reacting to changing demands and modifying their offerings to accommodate the new footfall and consumer patterns.

Case study

Griffin

120x120-purple-coffee-cup.pngWe were engaged by Griffin, an independently owned brewer and pub operator, to secure funding to assist in delivering its three strategic objectives:

1 Increasing the scale and profitability of the brewery

2 Diversifying the pub estate

3 Extending the reach of its own brand beers

We became a trusted adviser to the firm, introducing a variety of food sector, debt advisory and corporate finance specialists to help Griffin realise its ambitions. This included securing a working capital facility for future acquisitions totalling £40 million.

We subsequently assisted Griffin to acquire a number of smaller pub and bar operators, and supported them to secure additional funding to deliver new brewing contracts (both alcoholic and non-alcoholic beverages) to further diversify and improve the customer base and supply chain. We supported the business during 2020 with a CLBILS application to support its short-term requirements.

In 2021, we're assisting Griffin to secure a further tranche of funding, acting as a sounding board to management as it looks to pivot its strategy to re-shape its business for the next five years and beyond, diversifying the pub estate and extend the reach of its own brand beers.

How we help our clients

We've been supporting all parts of the hospitality and leisure sector by bringing together knowledge from across our firm. This includes sector specialists, financial modelling teams, strategic input from business restructuring, and ensuring access to the appropriate funding through our debt advisory teams.