Are we all doomed?
Speaking at the recent UK Hospitality summer conference, the serial hospitality investor said we were facing “two years of hell” and the only course of action was to “batten down the hatches” and “pray”.
Stark words and they set the tone and conversation for the rest of the conference - but is it as bad as he suggests?
Don’t get me wrong, the challenges the sector is facing are huge and certainly no picnic, but it’s also in the interests of a serial investor to talk the market down to create opportunities - if people panic and decide to sell up, prices will be lower than they might have been.
Not that I’m suggesting Mr Johnson has such an agenda, but his is a business that thrives on volatility - volatility that creates opportunities for investors.
But he makes a good point on discretionary spend - he pointed out that come the winter, when the energy bills really start to bite, and the food prices in the supermarkets are sky-rocketing, people will be forced to make hard choices about where they spend any spare cash.
Great opportunities
However, for me, I think that creates great opportunities for those of us in the pub and bar sector.
Pubs have always been able to flex and adapt to meet the market challenges - it’s one of our great strengths (and also a weakness as I mentioned in a comment the other week!).
We talk about pubs remaining an affordable treat, and we must continue to strive to maintain that.
People may not find themselves able to afford a michelin-starred restaurant meal, but they might be able to stretch to a nice bit of pub grub. If they think we’ll skip the meal - well, they can always come out for a drink.
We saw, during the pandemic, that reassessment of the need to socialise - people will still want to get out, we just need to ensure we’re providing the right platforms at the right prices to enable that to happen.
So are we all doomed as Mr Johnson says? The litmus test on whether he thinks it’s really grim will be whether he makes any investments in the next two years, but I suspect he’ll see opportunity.
But yes, for some it’s going to be very tough, but if I was anywhere in the hospitality sector right now, I’d rather be in the pub and bar area.
