Diversify and de-risk: How Tilley & Wills got through 2020
The Tilley & Wills strategy of diversifying on the macro and micro level served it well throughout the COVID-19 crisis.
2020 was an incredibly tough year for the pub industry, but Tilley & Wills’ overarching strategy of diversification served it well throughout the crisis. As venues reopened, the group was able to negate the revenue streams that were hit the hardest by restriction with the others it already had in place, and some new ones they were able to add quickly. The business was not left entirely unscathed though, with CEO Nick Wills recounting the impact it had on the group as a whole.
“It was obviously a shocker of a year. [COVID] affected our revenue significantly, it affected our bank valuations, it’s obviously affected our staff morale and culture, and certainly we’ve had to think more conservatively than we did at the beginning of 2020.”
The biggest impact of the crisis was felt at its Verandah Bar and Greenwood Hotel venues, located in Sydney’s CBD and North Sydney respectively. The two venues normally have a significant corporate patronage, but with people working from home most of the year, the venues had to pivot pretty quickly.
While Verandah lost a lot of its functions market, its F&B offering has kept loyal customers returning, and the venue has focused on hosting smaller groups rather than larger functions.
“At the Greenwood we’ve focused a bit more on the locals, which we’ve never done before. We put a big screen in there on the weekends, which is great for live sport viewing. We’ve had to adjust but the fundamentals are still the same – great food, great service and the venues present very well,” explains Wills.
The New South Wales-based group also made its first interstate purchase in 2020, adding The Prince Consort Hotel in Brisbane’s Fortitude Valley – formerly known as The Elephant Hotel – to its stable of pubs (pictured). The move into the Brisbane market was made to chase better yields, and to diversify and de-risk the group’s portfolio.
The large-format hotel has been reconfigured into an “eight-bar collective” that includes a cantina-style food offering, a sports bar, beer garden, cocktail lounge and a live-music venue. With so much space to play with, Wills said it made sense to ensure that a variety of tastes were catered for in the venue.
“The venue is so big that targeting one or two demographics just wasn’t going to cut it. We saw the opportunity to create something pretty special, and basically cater for everyone under one roof. One thing Simon [Tilley, co-founder] and I have never done is take ourselves too seriously, and it’s important that people don’t forget that pubs really need to be fun venues,” states Wills.
“So we made sure that anyone would have fun within The Prince Consort. Whether you want to have a cocktail party, enjoy some rock and roll, sip on some tequila or drink a slushy, have an upmarket experience, enjoy a beer outside or watch some sport (we’ve got the biggest sporting screen in southern Queensland) – there’s something for everyone. It’s a really special place.”
With a relatively sound balance sheet, the group is looking to continue to expand this year, with another two or three venues expected to be rolled out. The group is also planning on expanding Verandah Bar, with the addition of a café to capitalise on the early morning CBD crowd, as well as enlarging the footprint of the venue’s main bar. For Tilley & Wills, bigger is better.
“Our underlying strategy has always been that we like venues with scale so that you can do things bigger, better and more efficiently.”
Tilley & Wills’ NSW Area Manager, David Thompson, will be taking part in a panel at the Pub Leaders Summit on 22 March to discuss past and present strategies for coping with restrictions and surrounding the pandemic, and the agility of the group’s venues. You can book your tickets here.
The above article was first published in Australian Hotelier’s Annual Industry Leader’s Forum, last month. You can read the issue below.