Splash Hospitality's Ray Byrne on receivership, the recession and revitalising Cafe en Seine
If you're looking to operate a successful venue in the current economic climate, you'll need the expertise of Ray Byrne of Splash Hospitality. He recently spoke to JOE about the ever-changing hospitality sector.
Ray Byrne of Splash Hospitality has seen it all in the Irish hospitality sector, from establishing the stunning Wineport Lodge nearly 20 years ago to revitalising some of Dublin's biggest venues on behalf of the Receiver.
With one year until the 20th anniversary of the Wineport Lodge - easily recognisable to any viewers of RTE's The Restaurant - we spoke to Ray on how adaptable he had to become when the economic crisis hit and how he managed to turn around iconic Capital Bars Group outlets such as Café en Seine.
Overall, It was gratifying to hear that despite the challenges the sector has received in recent years, Ray seems perhaps more emboldened than ever. Have a read below:
JOE: So if we can take it all the way back, could you tell us about how it all got started for you at the Wineport Lodge?
RB: I was at the Wineport for probably ten years. We built up a very successful business there and there was always the question of whether we could do that elsewhere – could we replicate the success of Wineport or was it a one-trick pony?
As the location for The Restaurant, the Wineport Lodge is easily recognisable
It coincided with a time when people were looking to invest money in the hotel sector, largely because there were tax breaks involved; not that they loved the hotel business. I’d say that if there were tax breaks involved in the pig farming business, they’d have gone there.
It meant that I had a number of approaches where people would say: “I’d like what you’ve been doing, we’d like to do something similar but we don’t have the expertise – that’s where you come in.” That’s where the opportunity came to grow the business so we thought "Let’s set up an entity to do this" and we called it Splash Hospitality.
JOE: So when the economic downturn began, did you already have a profile where if people were in over their heads they would come to you for advice?
RB: That happened later. Initially Splash Hospitality was founded on the basis that we could raise the money, the banks were willing to raise the money and we could get the tax break - you do all the hotel management and we’ll make the financial things happen.
That was in the early noughties but by 2008 the business had dropped, the tax breaks were no longer needed because people didn’t have those big incomes that they needed to get tax shelter from and the whole thing was becoming a mess.
The banks were ending up with these big loans out to people who knew nothing about the hospitality business, so essentially the banks went to the insolvency sector and said: "How are we going to sort this out?"
The accountants and advisory companies in the insolvency and restructuring side started looking for Splash Hospitality and similar outfits to advise them and help them to stabilise these businesses. So that’s where Splash has been in since 2008, primarily working within the insolvency sector.
Our customer typically is a receiver and the receiver’s customer is the bank and we work as part of that food chain to manage businesses where the loans might be distressed but the fundamental business might be good or might be made good.
So we put a team together and we do whatever we have to do to get the business out of the critical care unit and at least to the walking wounded ward so that ultimately these businesses can eventually be sold and the bank can get some of their money back.
JOE: So one of your properties is Café en Seine, one of the most recognisable spots in Dublin – what was your first impression of the venue before you began to turn it around?
RB: What we saw was a bar that was beautifully decked out but certainly, the place had lost its mojo. I felt as a customer that the staff had disengaged somewhat, there wasn’t much direction and the attention to detail wasn’t there.
We don’t work any specific black magic; we simply get try to the basics right. We get the place clean, we fix things that are broken, we improve the customer service and we give really good value. We motivate the people we work with and we manage the business efficiently from a cost perspective so it begins to make money again.
It’s not complicated but it is rigorous. We are though, blessed with running some of the finest bars in Dublin and who’s to say what the future will hold?
JOE: If a place has – as you put it – “lost its mojo”, just how different would your strategies be for venues such as Café en Seine or one of your nightclub properties such as The Playhouse in Tallaght?
RB: Well certainly social media if you’re doing a nightclub business is absolutely critical. What you’re trying to do is trying to second-guess what your employer wants.
Do they want the place kept open and minded or do they want you to get in and drive the business so that in five years they’ll be making more money from it or at least enough so that they can sell it for a bigger lump of money than they could today? It’s not always clear.
I suppose one of the challenges in the sector is that no-one can see five years down the road, we can only see around six months in the future. Unfortunately it’s very hard to invigorate a business that’s going down the hill until you say you can stick at it for 3-4 years, especially if you want to reinvent it. That’s the big challenge - to exude the confidence and deliver on what you promise.
JOE: With Café en Seine I know that you’ve launched a loyalty card and you had the Euro 2012 preview night, so is it about thinking of outside the box ideas?
RB: It’s not just that; first of all you have to start off with a mindset that isn’t: “Oh, this business is in receivership and it’s all bad news."
You have to start off by thinking that here is a business that suffered a level of neglect but it has an illustrious past, so how can we make it attractive again so that the next generation will want to come here? It’s boy meets girl, it’s city centre and there’s a great buzz about the place so if we deliver that then the public will respond.
JOE: And how does the challenge that’s out there these days grip you compared to pre-Splash Hospitality, when everyone was doing relatively fine?
RB: I think it’s more exciting because there is so much need to get things right. You do get a sense at the moment that there isn’t a moment to lose – you can’t afford to miss an opportunity.
JOE: Do you think that the government is missing any opportunities at the moment to revitalise the tourism industry?
RB: I think they are. The big challenge that we’ve had in the tourism industry is that we’re beside the UK but we’ve never managed to figure out what the bloody hell we need to do to get them over here in serious numbers.
Whatever we need to do – there’s 60 million people and we don’t need that many of them. Put the Emirates Stadium in Mullingar if we have to.
JOE: I suppose on a lighter note, it’s the Wineport Lodge’s 20th anniversary next year – can you tell us a little about any plans you have in store?
RB: Well we’re planning to be around for the 20th year, which is no small achievement. Certainly this year has given us a lot more encouragement because we’ve seen things begin to stabilise.
Last year, in fairness to the government, they did bring down the VAT and the PRSI on the lower paid and that gave us a little oxygen that we hadn’t had, so we took 10 per cent off everyone’s bill and this year we’re taking 5 per cent off. So next year we’ll have to come up with something.
We have the place looking absolutely amazing; it’s polished, it’s shining, it’s gleaming and we’re finding that more and more Irish people are happy to stay at home. We want to celebrate their special occasion with them and if we’re doing it again 20 years later then we’ll be delighted.
JOE: That’s great to hear, we really appreciate your time.
RB: No problem.