The old local pub ain’t what she used to be
Cashed-up from poker-machine profits, Australian hoteliers are revolutionising the industry, turning local pubs into buzzing village hubs designed to attract everyone from fine diners to preschoolers to mother’s groups and those looking to “pick up” a romantic date.
“When I was young a pub would have a pie warmer — and you would be lucky if there was a single pie in it,” says 78-yearold Arthur Laundy, looking back on half a century of operating hotels in NSW. “Food now is as important in a hotel as liquor.”
Laundy owns 68 hotels in NSW and Queensland including the swanky Watsons Bay Hotel on Sydney Harbour and the famed Northies Cronulla Hotel, deep in Prime Minister Scott Morrison’s Sutherland Shire.
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The group recently opened its biggest pub, the Marsden Brewhouse at Marsden Park, 53km west of Sydney’s CBD. On any day the car park is jammed with punters, patrons, community groups, families, couples, kids, office workers and even wedding guests. Outside there are bookable cabanas which seat 10 people and resemble the outdoor dining facilities found around the swimming pools of some of Los Angeles’ swankiest hotels.
Says Arthur Laundy: “Marsden Brewhouse is like a club — it has a massive beer garden, children’s play area, a public house with a large indoor and outdoor TAB, plus a terrace with a giant screen, and a dedicated pizzeria.” The Brewhouse is trading way above budget and its new Marsden brewed beer is sold across the Laundy empire and into other venues as well.
Adding a brewing house to a pub is a trend taking off in Australia with publicans luring more punters with the offer of free brewery tours and beer tastings. Brisbane entrepreneur Adam Flaskas opened the Felons Brewing Co in his $200 million redevelopment of the Howard Smith Wharves last year. Overlooking the Brisbane River the pub can take up to 1000 standing patrons but for those not enticed by the views across the serpentine river there’s a Mediterranean beer garden out back or a beer tasting on offer.
On the other side of Sydney from the Marsden, pub czar Justin Hemmes’ Merivale group has transformed the historical Newport Arms Hotel into a similarly diverse hub. Renamed The Newport, this northern beaches spot is alive with families and tourists enjoying a diverse mix of dining and drinking. In redesigning The Newport, Hemmes followed the successful model he used on his Coogee Pavillion Hotel in Southern Sydney. At “The Pav” it is not unusual to see 80 mothers and 80 prams early in the morning as mums meet for coffee. The downstairs area for kids includes an in-house theatrette, ping-pong and giant magnetic scrabble. Upstairs it’s adults only, with four indoor and outdoors bars.
“The Newport is very much the Coogee Pavilion model,” Hemmes says. “It’s about creating the spaces which are comfortable for all different types of people. If you have a young family you feel comfortable in the space and your kids are comfortable in it and you feel safe. Or if you are a single person looking to pick up you don’t feel like there are kids running around you and feel awkward. You make spaces that they feel comfortable in.”
Behind the push for family friendly pubs that also cater for singles and couples is the desire to maximise profits as opening hours have been extended: it’s easy to open the doors from 10 am to 2 am, for example, but how many people want to start drinking beer at 11 am.
Arthur Laundy says the NSW’s government’s 1997 decision to allow poker machines into hotels revolutionised the industry – with the profits allowing publicans to “flash up” their hotels. He says that around 1997 banks had placed about 800 of NSW’s 2000 hotels on “hospital watch”.
“Banks saw pubs were struggling…people were watching their bank balances … but when poker machines came in that relieved the (financial) situation considerably,’’ he says.
Hemmes agrees: “Pokies are responsible for probably 98 per cent of renovations. I am talking across the board. You would not be able to afford to do it otherwise. These great environments the hoteliers are creating, 90 per cent of the time it’s due to the gaming input.”
He says the revolution started about five years ago: “It has a lot to do with social media. We don’t have that connection we used to have anymore because everything is done by text, or social media or via the internet. I think we crave social connection and what a pub has become now is really an important fabric of the community. Hotels are now becoming the village hub … pubs are a very important part of the community.”
Hemmes argues that unless hoteliers step up by serving restaurant-quality food, overseeing children’s face-painting competitions and holding coffee mornings for mother’s groups, they will lose out. Merivale who will soon add another five venues to bring its portfolio to 70 venues including 26 standalone pubs. Hemmes says publicans must spread their customer base: “We want everyone to be our customer — that’s families, singles, all people and all ages. You try and create a space that all these people can enjoy together, but also separately.”
His pubs now feature spaces for kids and mothers, quieter areas for those out to meet potential romantic interests, as well as fabulous restaurants suitable for families and couples.
Thanks to a thriving property empire Hemmes has watched his fortune rise to more than $1 billion as he establishes a reputation for himself as a pub restoration king. He has a knack for turning faded old pubs into hip local hotspots.
Hotel broker Andrew Jolliffe, the managing director of HTL Property, doesn’t buy the social media line. He says the trend for longer hours and inviting kids, mothers and families into pubs started back in 2009 with then prime minister Kevin Rudd’s cash handouts designed to stave off the impact of the GFC. Joliffe says punters built their own home movie theatres with the government’s $950 handout, negating any need to watch the footie down on the big screen at their local. In turn, pubs were forced to introduce various forms of entertainment to attract customers.
Jolliffe, who has been a key player in the industry for 30 years, says elongation of trade (as expanded hours are known in the pub industry) has been underway for at least five years.
“The competition for the dollar has been driving it, people are competing for their share of the dollar,” he says. “Publicans realised they had to create different experiences at pubs and appeal to different groups at different times of the day.”
Jolliffe, whose pub sales have included the $62 million sale of the Albion Hotel in Parramatta for Bruce Solomon and more recently the $60 million-plus sale of Manly’s Steyne Hotel for high-profile entrepreneurs including John Singleton, financier Mark Carnegie, and Laundy, says: “There are a lot of publicans doing this. It’s born out of a need to defend market share and fend off a range of challengers including Netflix and retailers.”
Hemmes says it’s also about providing experiences: “In our pubs you can have a coffee, meet up with other mothers. It creates a reason to go out, there’s a need there and hotels are fulfilling that need. We are selling an experience, we are not selling food or beverage or entertainment, we are selling an experience.” For Hemmes it’s no different from the fashion business his father, John, and mother Merivale ran 40 years ago.
“We are doing the same business as mum and dad were in,” he says. “My sister, Bettina, and I are in the same business. The actual product is a different product, but it’s the same thing, it’s an experience. Mum made and designed beautiful clothes because she wanted to enhance people’s lives. That is what we want to do, we want to enhance people’s lives, we want to improve them and make them so much better through their social experience. We want to provide the platform for people to have a good time.
“You would buy that garment with an expectation which gave you an experience. Whether it was for a new job, or an interview, or a first date, or an anniversary or something, they were selling an experience. That is what we are doing. We sell an experience. I get such a buzz out of it.”
Hemmes says large hoteliers are following his model of offering diverse entertainment at their venues, emulating some of the design tricks he has employed at his popular pubs and venues which include The Ivy, and famed restaurants such as Fred’s and Queen Chow.
“It’s the greatest form of flattery but I think they say that to make you feel better about it,” he says.“To be honest every idea has come from somewhere else. It’s an adaptation of something. Everything I have done I have seen — not that model, but an element of it — somewhere. But it’s the blatant rip offs that have been very disappointing and there have been a few of them. It makes you raise the bar and it challenges me to evolve it further, otherwise you rest on your laurels.”
Hemmes employs 3000 staff in his various venues and there is an emphasis on training and, for some, overseas trips to keep up with food and drink trends. “All the food reality programs have changed the dynamic of food in this country,” he says. “I am talking 15 years ago when they first came out. It really changed how people look at food. People are so interested in food now. It’s the evolution of the customer. The evolution of food in Australia alone is incredible. We are such a young nation that our expectations when it comes to food is some of the highest in the world. Hotels have adapted to that because if your food is not up to the level of expectation and what other people are delivering you will fall by the wayside. You can’t have a venue that is purely alcohol focused.”
Hemmes recently hosted a handful of chefs to an adventure through Asia: “I took five chefs, we went to Malaysia, Singapore, Vietnam, Hong Kong, Taiwan. It opens their eyes and it really inspires them.” Other staff have travelled to Europe and bar staff have been treated to training trips to America, the United Kingdom, and France.
Not all pubs in the Laundy empire get the “glamour” treatment. The company recently acquired the $15 million Bell’s Hotel in Woolloomooloo — an old pub once favoured by naval staff — but it will not undergo a major renovation. The publican says he will merely “clean it up”.
In contrast another Laundy venue, the nearby Woolloomooloo Bay Hotel is about to be converted into a “spectacle for the area’’. The emphasis will once again be on serving good food along with alcohol.
The decision to renovate one and maintain one as a drinking man’s pub, makes perfect sense. Rather than compete against himself, Laundy can have the best of both worlds.
This article originally appeared on www.theaustralian.com.au/property.