The hospitality industry is a challenging line of work to be in at the best of times. With razor-thin margins, the rise of online reviews and Instagramming everything, and the ubiquity of delivery services, operators have plenty on their plate as it is. Throw in a global pandemic, nationwide lockdowns and growing wage awards, and it’s safe to say it’s been one hell of a ride for restaurants, pubs, and clubs around the country.
The past 18 months have undeniably been tough for the sector. However, it’s also spurred a wave of change that is transforming the industry for the better. From rethinking food and beverage offerings for delivery to adopting digital platforms and streamlining business efficiency, operators around the country are embracing technology to drive the industry forward.
As restaurants, pubs and clubs begin to imagine a post-COVID future, the biggest question on everyone’s lips is: where to next? Two pub owners, Brad Fitzgibbons from Fitzy’s in Toowoomba and Andrew Jeffreys (“AJ”) from Harajuku and Fritzenburger in Brisbane, share their trials and triumphs in the sector — and show how they’re reimagining the future of their business with new ideas, new technologies, and a healthy dose of good old fashioned grit.
The state of play
Three trends that are shaping the hospitality industry
Hospo has always been part of AJ’s life. Speaking about his memories with an obvious fondness and a glint in his eye, AJ recounts how he spent his formative years working at McDonald’s, before cutting his teeth in prominent Brisbane venues including Hotel LA, the Regatta Hotel and the Chalk Hotel.
“These were the backdrop of a lot of the best memories of my youth, especially the Regatta. I loved the atmosphere and the culture, teamwork — I loved it all,” he said with a smile.
After working his way up to a management position at Regatta and tasting different cultures around the world, AJ set up his first shopfront, Harajuku Gyoza, ten years ago. Fritzenburger followed shortly after.
Brad felt a similar wave of passion for the industry. A fourth-generation “publican”, Brad’s parents owned coffee shops and carveries and he spent his school holidays bussing tables (get this) for fun. In 2001, he bought Fibber Magee’s Irish Pub and transformed it into Fitzy’s Waterford Hotel: a tribute to the great Aussie road trip, fabulous cars, and the nation’s shared love of a great hearty feed. Fast-forward to today, and he now runs his own venues, including the iconic Fitzy’s on Church.
Over the years, both have bore witness to the massive changes that have taken place in the hospitality industry — and, most importantly, adapted and lived to tell the tale.
The cost of doing business
Wage increases and award compliance
Costs have always been high and margins have always been thin in hospitality. But as the minimum wage continues to climb, pub and venue owners need to be on the ball if they want to keep up.
Alongside the rise in costs of living, annual minimum wages have been steadily rising over the past few years. The Fair Work Commission increased the hospitality sector’s minimum wage and related award minimum wages by 2.5% to $20.33 per hour in 2021, on top of last year’s increase of 1.75%. What’s more, the 0.5% rise in superannuation will see wages lifted by nearly 5% in 2022.
With tourism at an all-time low and ongoing lockdowns throughout the country, many operators feel this has been a blow to an already-reeling industry — including Fitzy’s.
“The changes to awards have been challenging, to say the least. The cost of labour is crazy. We’re paying salaries that we’ve never seen before to keep good people,” said Brad.
There’s also very, very little room for error. Over the years, there have been many high-profile cases of staff at restaurants being underpaid or not having the correct amount of super paid. Dozens of everyday operators have been caught underpaying, whether knowingly or not, these cases demonstrate the potential for far-reaching ramifications — resulting in staff resignations, hundreds of thousands of dollars in fines, negative publicity, and even liquidation.
Brad Fitzgibbons Interview
General Manager at Fitzy’s on Church
Listen in below as Nick Braban from Tanda gets the opportunity to chat with Brad Fitzgibbons from Fitzy’s on Church in Toowoomba.
The importance of reviews and social mediaBrad and AJ have also had front row seats to the game-changing rise of social media and online reviews. Back in the day, owners only had to worry about write-ups from a handful of journalists. Now, everyone’s a critic. A survey by Capterra shows that 98% of Australians read online reviews before making a purchase, and 94% believe these reviews to be trustworthy. As more Aussies started taking stock of what their peers were saying online, AJ said his team had to as well. “We pay attention to Google Reviews, conduct quarterly manual reviews of Google scores, and empower our shift managers to reply to customer feedback.” However, he has a healthy dose of realism when it comes to online reviews. “We accept that not every review will be 5-star. We take reviews seriously but not personally, we understand that we might not get something right. Things can happen. Even with the best forecasting and rostering, sometimes we just get really busy.”
- 98% of Australians read online reviews before making a purchase.
- 94% believe these reviews to be trustworthy.
- 84% of Australians have left a review online at least once in their life.
Takeaway-it or leave it
new consumption platformsGoing hand in hand with the rise in digital technology, hospo industries have had to completely flip their method of doing things on their head. Platforms like UberEats, Deliveroo and Menulog have opened the floodgates to a whole new sea of customers. But, alongside that, there come the logistical challenges of pick-up and delivery, getting on board with new apps, and rules around serving takeaway alcohol to customers. As pub operators, both Brad and AJ’s RSA compliance has to be airtight at all times. “As a corporate citizen, we need to be responsible in how we sell those products. Compliance is huge, especially with individual managers’ licences. We need to employ the right people to share the responsibility of upholding their standards and the government’s standards, which is why we spend a lot of time on compliance,” said Brad. These platforms also charge between 14 – 35% in commission, which puts even greater pressure on margins and labour shortages. Yet, regardless of everything that changes, Brad acknowledges that at the end of the day, it’s still a people business — and he needs the right staff on board to provide a great experience for customers. That’s why he always ensures he has “people people” on board and that he hires employees for their personalities first and foremost.
Andrew Jeffreys Interview
Director at Harajuku Gyoza & Fritzenburger Interview
Listen in below as Nick Braban from Tanda chats with Andrew Jeffreys below.
…and then COVID-19 happened
If it wasn’t tough enough being in hospitality before, the global pandemic completely upended the industry.
Faced with ongoing stay-at-home orders in 2020 and again in 2021, owners had to pivot their models and adapt to new hygiene and density requirements, while simultaneously trying to make rent and keep staff on the books.
Sure, it was tough. But AJ and Brad didn’t let that get them down.
AJ used technology to keep in contact with everyone and to organise rostering and takeaway. He also had to pivot their menu for the times: burgers were well-suited for takeaway and typically sell better than dumplings, so Harajuku Gyoza added these to their Broadbeach, Darling Harbour and Southbank locations.
“We didn’t try to be something we weren’t. We focused on where we thought there was an opportunity, but we didn’t go after every little thing,” he said.
This focus paid off. AJ did have to stand some people down — in fact, during that period his businesses recorded their highest turnover of staff in 10 years of trading. But as soon as JobKeeper came along, they were able to reopen and get moving again.
Brad shares a similar story. After shuttering Fitzy’s doors during the lockdown in 2020, the team found themselves having to completely rethink their game plan when they returned.
COVID-19 hit the industry on two other fronts: supply and demand. With borders closed since March 2021, the pandemic has only exacerbated resource shortages in the industry’s already-dwindling pool. Venues in popular locations used to be inundated with resumes from backpackers, international students and working holiday visa holders, all eager to find a gig on their travels. Now, with a ban on arrivals and the government’s crackdown on temporary visa holders, talent is scarce — and those who are good get snapped up in the click of a finger.
Labour wasn’t the only area to be affected. Domestic and international tourism has also plummeted to record lows. Deloitte reported that inbound international and interstate travel in 2020 dropped 81% and 65% respectively, which has resulted in approximately $85 billion lost in visitor spend.
And the hospitality sector? It copped a large brunt of these losses. Forced closures led to an approximate 19% drop in revenue for pubs, bars and nightclubs, and restaurants saw a 25% decline. Throw in high commissions from online food and delivery platforms, and there wasn’t a lot of wiggle room — if any.
It’s enough to make anyone throw in the towel, but not Brad. Once again, he rose to the challenge. The labour shortage, coupled with a decline in tourism, forced the team to put every part of the business under a magnifying glass and prime it for efficiency and output.
“We had to address our menus and go, “wow we just haven’t got the staff to be able to put out this food”. During downtime, we worked with the head chef in the kitchen to write a menu that would work with particular KPIs and labour hours. What we were serving needed to be efficient, profitable and something the customers like. People who worked in gaming also had to look at their skills and see where else they could lend a hand,” he said.
That’s where the team’s use of Tanda gave them the upper hand. With all the costs of running their business at their fingertips, Brad and his team were able to pinpoint exactly where the opportunities were and where they needed to adjust their spending.
“We had time to pull things apart during the shutdown and look at the sectors of the restaurant that needed to be a profit driver. We’ve come out of that a better operation because people are multitasking.”
COVID-19 and digital transformation
The perfect storm for change
Like it or not, COVID-19 is a timestamp on the hospitality sector. Like entropy, there’s no way of going back to what was — but this isn’t necessarily a bad thing. Our ‘new normal’ has accelerated industry transformation, forced businesses to innovate, and pushed owners to streamline their operations. And at the heart of this revolution, there’s technology.
From hotels adopting Amazon’s Artificial Intelligence (AI) voice assistants to Singapore’s local AI concierges and virtual dining concepts, the latest VR, AR, AI and machine learning technologies are rewriting the rules of hospitality as we know it. While there’s still a long way before these become as common as food delivery apps, they’re a glimpse of an exciting future powered by ingenuity and innovation.
Closer to home, for operators like AJ and Brad, technology is the enabler for a venue that’s more competitive, more connected, and more efficient. AJ says implementing new software, like Tanda’s automated rostering, attendance and award compliance platform, has dramatically shaved down the amount of time he spends on paperwork — allowing him to focus his energy on what really matters.
“Having the right technology in place to effectively manage your rostering and wages allows you to spend more time focusing on the strategic direction of the business because you know that scheduling and wages are correct and compliant,” said AJ.
With a huge weight off his shoulders, AJ and his team are able to be more connected with staff and customers, create menus and services based on customer feedback and data, and explore new avenues to reach customers and meet their needs, from delivery services to online booking platforms.
What’s more, this access to real-time rostering data through Tanda has transformed AJ’s business management style — enabling him to gain a transparent understanding of costs, especially labour, so he can be agile, pivot when he needs to, and make decisions as quickly as possible.
“Harajuku and Fritzenburger use Tanda to help manage their rostering and labour costs. We take advantage of Tanda’s live daily labour costs feature in combination with their daily sales reporting, so we always know where we stand. We can see our daily labour costs live in Tanda so everything is really open and transparent,” he said.
Tanda has also helped AJ ensure his business is complying with the government’s ever-changing award requirements. With Tanda, operators can keep an eye on labour costs, while also ensuring they’re meeting minimum requirements with the platform’s automated award calculations.
At the same time, this data is informing their online reviews and performance. AJ regularly hops into the platform to check the level of staffing and see how this corresponds with the feedback the venues are getting.
“Sometimes the stars align and we are a lot busier than expected and sometimes the service might struggle. With how important the cost of labour is, there is probably a healthy level of negative reviews for being understaffed. If you’re rostering for ‘just in case’ all the time, you’re probably not going to make any money,” he added.
He’s even had time to roll out new technologies in his venues, from an AI POS that’s fully integrated with online ordering and rewards platforms to QR ordering at tables, tablet ordering at Harajuku Gyoza, and QR codes to add customers to their email database so they can stay connected.
For Brad, it’s about cost management and wages and award compliance. Tanda made it easy for him to keep track of costs, including hourly rates and entitlements — particularly as he had a lot of old-timers who had racked up long service leave.
“There were times where we lost control and costs blew out. It was a big, big learning curve and there’s a lot of responsibility, particularly in a family business. There was a lot of pressure to perform and there was a period in the mid-2010s where we didn’t do that. At that point, I knew we could no longer work on the fly in a business of this size. Costs, particularly the labour element, became a big focus of ours on a daily and weekly basis.”
It’s also taken a lot of the pressure off when it comes to keeping up to date with training and certification requirements, such as the RSA and RSG. The platform’s paperless employee onboarding ensures that new hires have the certifications they need from the get-go, and sends proactive reminders if an employee’s licence has expired or they’ve hit their working hours.
And, at the end of the day, technology has given Brad more time to adapt to changing customer expectations and keep his team engaged.
“I see it as my job to make sure they are still motivated, still writing new menus, still developing cocktails — just making sure we’re not stagnant. In this marketplace, small bars and restaurants are popping up everywhere with relatively low capital outlays. We have to be on our game.”
Reimagining the future of hospitality
As they look forward, Brad and AJ are excited about what’s in store for their businesses. With digital technology like Tanda at their fingertips, both owners feel reassured knowing their wages and award compliance are taken care of and that staff are paid correctly and on time. Technology is also empowering them to elevate their service through accurate labour forecasting and rostering, and create an exceptional experience for their employees through onboarding and data management.
Ultimately, it’s equipped them with the tools they need to run an efficient and successful business in the future. AJ says that the key for any operator is to ensure they have the systems in place to keep things running smoothly, which allows owners to focus on the bigger picture.
“I’ve learned to set up the business so you’re not working in the business more than you’re working on the business. Having good people that you trust allows you to do that. Have annual strategy meetings, then quarterly meetings to make sure they are on track, then monthly and weekly to keep everyone on task. This keeps you from getting distracted by other things that pop up. There are always things that pop up. But with a clear strategy, you can keep focused on your objectives and goals.”