Emily Newman interviews Jonathan Downey, founder of Hospitality Union and CEO, London Union.
Speaking to Hospitality Insights, Downey said he had initially created a broadcast only WhatsApp group with a handful of industry contacts but as the situation unfolded, in combination with Boris Johnson’s announcement on Monday 16th March to avoid pubs, clubs and theatres to stop spread of coronavirus, this group rapidly developed into over 3,000 hospitality business owners. “It took on a momentum and an importance that I didn’t want or expect. It was just supposed to be a way of me sharing a few thoughts and ideas with some mates in the industry.”
“I am a collaborator by nature and happy to share. There is a horrible gap of leadership and a reluctance to share and be honest – it’s one of the things I hate about hospitality. I am the complete opposite, brutally honest and incredibly keen to share, especially the bad news and the worst bits because that is how you learn and improve. That has always been my approach. People welcome that, especially in a crisis. We don’t have time to mess around. We’ve got to save millions of jobs and businesses.”
Asked why there is a reluctance to share, Downey said: “It’s male insecurity. It’s pathetic. Success in business, for a lot of men, is like a pissing contest with people obsessed with measuring themselves against others. I have never done that, I have always just concentrated on my own business. Judge success by your own standards and own ambitions, not by what anyone else is doing.”
Downey, humbly attributes his success to approaching the hospitality industry with a professional background, a desire to change attitudes and a need to contribute to making hospitality a more admired and worthwhile career.
We’ve witnessed incredible support for local hospitality businesses who have shown determination and innovation during the crisis whether it’s the restaurant up the road selling ingredient boxes and offering Zoom cookery lessons to create a culinary delight or the resilient deli processing telephone orders for vulnerable residents and delivering lunch to the local community. Could this be a chance for independents to prosper?
“Almost all the job losses this industry will experience by the end of the year will be in the independent sector, in livelihood businesses. They don’t have the financial support. They are best able to deal with the crisis as they are smaller, more nimble and owner managed but the virus and the government’s response has been so devastating, that many won’t survive.
“There is an aversion to our sector. We’ve seen, as a result of this crisis, that perhaps the banks were right to be averse because the business model is so fragile, in many cases. As a result of fear of the virus and then government announcements, we collapsed into insolvency in a matter of days. What kind of business model is that?
“Despite rising rents, ridiculous business rates, squeezed margins and increased staff costs, people are still running businesses they feel passionate about but aren’t making any money from.”
On whether the public returning to hospitality venues will drive a return to profit, Downey said: “I don’t know how long it’s going to take and whether they ever will come back. The loss of business from people staying away will be offset by the loss of venues so there will be less competition, but I don’t know if that will even out. People are less likely to travel so smaller and more local venues will do well as people stay closer to home.”
Downey pointed out that after the 2008 financial crisis, hospitality was a vital contributor to the bounce back, creating one in three new jobs for young people but “we’re not going to be able to do that this time because hospitality venues are social spaces and we have issues with distancing and a fear of other people.”
Concluding Downey said: “We have come together as an industry better than ever because of this but we have also seen a lot of the differences. I suppose that is just the nature of things. I don’t think people realise that the next three weeks will be the worst of this whole thing, there might be things put in place to support, like an extension of the lease forfeiture moratorium and perhaps something to help on rents – but I’m not hopeful – it’s going to be more fraught and more stressful over the next three weeks than it was at the beginning. ”