Hospitality Groups, Experts Share Pandemic Lessons

Ricardo Zarate Jr. – director of operations for Leucadia Company, which manages three Encinitas, Calif. restaurants, including Valentina (pictured), Moto Deli and Corner Pizza – said the pandemic has been the single largest influence on restaurant fortunes and futures. (Photo: Courtesy of Leucadia Company / Valentina)

Bar & Restaurant spoke to leading experts and hospitality group owners to discover what they’ve learned over the past year as a result of the Covid-19 pandemic, and how those lessons will impact decision-making in the future. Here’s their advice, which is also useful for single restaurant operators.

Lesson: Greater Disaster Preparedness Is Necessary

Patrick Hardy, a Certified Emergency Manager and Certified Business Continuity Professional, is the CEO of Hytropy Disaster Management, a small-business disaster management company in Baton Rouge, Louisiana. He’s developed disaster plans for thousands of small business owners, from small independent restaurants to restaurant groups with a national footprint.

Hardy said hospitality groups have discovered without question that greater disaster preparedness is necessary, particularly since the pandemic happened in concurrence with the massive 2020 Atlantic Hurricane Season and the massive gigafire in Northern California. They also figured out the hard way that planning is more than just submitting an insurance policy or requesting money from PPP loans.

Restaurant groups Hardy worked with learned that crisis communication messaging, training of employees on new procedures, and a commitment to quick pivoting during a disaster like Covid-19 required a larger coordination than many expected.

“Properties that did a proper lessons-learned analysis of the pandemic and other emergencies that affected them in 2020 discovered that management teams were in many cases not prepared to deal with the regulatory changes and quick pivots that were necessary to keep up with reopening schemes throughout the country,” said Hardy. “In California, groups were shocked that not only did the state have overlapping regulatory requirements, but each county had its own regulations that sometimes changed daily. This made it very difficult for owners and operators to maintain consistency throughout their property portfolio.”

For single restaurant operators, Hardy believes you can't afford to operate without a plan. “You need to prepare now, because the governance bodies are going to place greater regulations for pandemics, and you are going to be expected to follow it,” he concluded.

Lesson: The Importance of Branding, Consistency

Ricardo Zarate Jr. – director of operations for Leucadia Company - which manages three Encinitas, California restaurants, including Valentina, Moto Deli and Corner Pizza – said the pandemic has been the single largest influence on restaurant fortunes and futures. The key lesson learned from the pandemic was the importance of their branding.

“With all the pivots required, as policymakers changed regulations as the pandemic progressed, we had to ensure that at all times that the concepts of the food and services we were providing fit each location's style and model appropriately,” said Zarate. “For example, whereas Corner Pizza and Moto Deli could pivot very easily towards a take-out model, changing Valentina's towards take-out required substantially more thought and attention.”

Zarate said that simply boxing up menu items at their Valentina restaurant did not offer the experience in a way that would allow their brand to be represented well. As a result, they moved away from a take-out model to a hybrid to-go/street-side model that proved very popular and allowed Zarate and his team to showcase Valentina in a way that fit well with the brand.

Moving forward, “as we look at group-wide innovations and practices, we will be more thoroughly assessing how each concept may benefit or be hindered by these big-picture changes,” said Zarate.

Lesson: First, Run a Profitable Business, Then Take Care of Guests

Both the largest restaurant group and the single location mom-and-pop restaurant have the same focus, according to Zarate, who believes that you should first run a profitable business and then take care of your guests. This mantra is especially important, he said, because this pandemic has illustrated how these two themes are the core of the industry.

“Single restaurant operators need to be putting in the effort to have as detailed of a look at their financials and operation practices because if this is not done, it is very easy to not truly understand the financial health of one's business,” explained Zarate. “And if you can't keep the doors open, there's no possible way you can take care of your guests.”

Lesson: Know When to Pivot, and When to Adapt to Market Demand

For Little Italia Dining Concepts, the lesson learned was to know when it's time to pivot and adapt to the market's demand. In fact, coming off a week where Gio Di Palma introduced his newest pizza endeavor, Antico Roma Pizza, and revealed the upcoming Autopizza in Atlanta, Business Insider chose his beloved Antico Pizza “Napoletana” for its “Each State’s Best Pizza Place’ to represent Georgia.

Photo: Antico Roma Pizza

Two months into the COVID-19 pandemic and a growing demand from customers nationwide, Di Palma began shipping frozen pizza to a growing number of his celebrity clientele. “I always said that pizza is recession-proof; quickly I learned it could also be pandemic proof,” he said.

From there, Di Palma expanded Antico's offerings to provide a frozen pizza option. Initially, the shipping process was handled in-house from his Little Italia compound in Atlanta’s west midtown community. However, after entering the frozen pizza market, the demand took off and Di Palma partnered with Goldbelly, an online marketplace for food delivery.

In addition to Goldbelly, there are two other ways customers get their hands on the frozen pizza. The restaurant's Atlanta locations sell them fresh daily, and they're also sold in Atlanta from an ice-cream truck that was purchased and wrapped during the pandemic. Di Palma’s son Johnny and his friend enjoy making daily stops at several Atlanta hot spots.

As of today, the Antico brand is the only Georgia-based pizza that’s offered through Goldbelly, and the Covid-19 induced demand continues to grow.

“Being able to make changes to your business model to accommodate the market and changes is critical to remain both relevant and profitable,” said diPalma. “During the Covid-19 pandemic, patrons were not allowed to come to us, so we found ways to get our food to them.”

Lesson: Diversify Your Income Streams

Mark Domitrovich is founder and CEO of Pioneer Tavern Group in Chicago, a boutique hospitality company that owns and operates Lottie’s Pub, Frontier and Ina Mae Tavern.

Domitrovich said a big lesson for them was having to diversify their income streams.

“Through the pandemic, we have relied heavily on takeout, delivery and, now more than ever, technology,” said Domitrovich. “We had to get creative in order to find ways to supplement, and our biggest takeaway is that we must adapt in order to survive.”

Luckily, Pioneer Tavern Group recognized this very early on. “Although we are not out of the dark yet, we will continue to adapt to face today’s challenges and the inevitable ones in the future. Even when the pandemic is behind us, there will always be challenges on the horizon and we must continue to evolve to keep up,” he said.

Learn More: To get more valuable insights from industry leaders and the bar and restaurant community,  attend the Nightclub & Bar Show, the most important event of the year for operators. The event takes place June 28-30, 2021 at the Las Vegas Convention Center. Details can be found at NCBShow.com.

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