Create a plan B for the chefs?
This is the biggest challenge we chefs are going to face in our lifetimes!
Cruise ships sinking:
There are up to 300 chefs on large ocean going cruise ships.
The cruise ship industry served some 30 million passengers in 2019 and was forecast to rise to 32 million this year, according to the Cruise Lines International Association. But those projections were made before the Covid-19 pandemic struck, which has brought the globaltourism industry to a near standstill.
The response window for a crisis is measured in months, while recovery is measured in years.
The cruise and other hospitality industries will hope customers have a short memory and the tourism industry will bounce back, much like it did after the SARS outbreak in 2003.
However, the Covid-19 pandemic is unlike anything that many of us have ever experienced. Undoubtedly, this will lead to long-lasting repercussions for these sectors.
Carnival Cruises stock has dropped by approximately 60%, while Royal Caribbean and Norwegian have lost more than 70% of their value over the past 30 days.
If companies cannot find sustainable funding, it is difficult to see how some cruise liners will survive, especially as this issue is likely to be long term.
Covid-19 has arrived in an untimely fashion for the cruise industry. Liners were already facing intense scrutiny for their carbon footprint and the damage they cause to the environment.
The latest pandemic will make it difficult for many cruise liners to attract customers, which will result in closures.
A fall in cruise tourism could be disastrous for some countries and the many people that rely on tourism for their livelihood.
If the cruise industry follows the aviation industry, it could find itself in a deep crisis which will be hard to recover from and which could cause smaller and medium-sized companies (if not even the larger companies) to collapse.
We’re probably looking at seven to eight months after it is definitively stated that the coronavirus threat is in the rear view mirror before we begin seeing pent-up demand take over on bookings.
The problem is that in the case of some of the cruise lines, they have such a high debt service obligation that they must earn something. Most are not making a dime and the chefs are going down with the ships!
Even when the Covid 19 crisis comes to and end, tourists will certainly not return to their old ways in the same fashion, nor in droves. A new norm will emerge
Cruise operators are likely to offer big discounts, but you have to have these ships pretty full to make a profit, you can discount a lot, but you have to meet your fixed costs.
Bigger they come harder they fall:
Royal Caribbean declared a profit of $1.815 Billion in last year’s operation, which translates to $4.96 million per day.
So how much does a cruise ship cost to operate?
The Royal Caribbean posted numbers of over 6.1 million passengers that sailed on its ships around the world in 2018, and have reportedly spent around $9.5 Billion on operating costs in that same year.
Sure, these numbers are with ships operating as normal.
A large, 6000-passenger vessel would have a normal operating cost of US$1.1 million per day.
Now with at least 70% of cruise ships lying dormant, they still gulp gigantic daily sums of money in maintenance costs, asset finance of estimated $42,000 per day for large cruise ships, docking fees at an average of $3000 per day, limited essential crew at estimated $40,000 per day.
I have been unable to ascertain an estimate of daily maintenance costs. What I do know from my experience on some mega yachts, is that maintenance is a huge chunk of money. Something is always going wrong!
That’s why many say that there are two most happy days for a yacht owner; the day he buys it and the day he sells it!
So the owner of a $10 million yacht should expect to pay $1 million every year to keep it running
It is likely to be these rich corporations and individuals that will fall the hardest; for the rich hate getting poorer whilst the poor remain poor.
Restaurant going out business:
New working, dining and shopping practices will probably become a permanent fixture of the next normal.
We know food will continue to be consumed, but it will more than likely be a shift from out of the home to into the home.
What do people want to eat right now if they’re anxious and stuck at home? Really family-friendly stuff, shared meals at home
Many restaurants of all types will fall by the wayside if they have not already. This for a number of different reasons too numerous to mention here
This will be a culling process. After all, the consumer will be no worse off with fewer restaurants.
How to survive the next financial crisis: as a chef
My prediction is that the high end restaurants will be the hardest hit as this sector has very high overheads.
The survivors may enjoy somewhat less competition as many in this niche are also likely to bite the dust.
People will still frequent these sort of places but to what extent is any ones guess.
It is next to impossible for these sort of establishments to re-gear themselves to the take away or home delivery market, so in a sense they will be trapped in the nest they created.
If you are the surviving owner-chef, or one that has influence over decision-making, I would take a critical look at your existing concept and adapt it as far as possible to the new norms that may emerge.
You will have to take into consideration that the experts may tell us to only accept a limited number of guests, have large spaces between tables, guests and staff to wear gloves and masks and to maintain social distancing.
How can social distancing be practiced in establishments where barely two people fit behind the bar?
This will be impossible in the kitchen.
How do guests eat with face masks on. Do service staff make a wide berth around tables and even then, how do they put the food on the table?
If you are a skilled chef that will soon, or has already lost his or her job, I may consider the following course of action, this assuming also that you have little or no money
Many landlords will have tenants that have gone bankrupt leaving huge creditors debt, and unable even to pay their home mortgage.
These business are very unlikely to attract any buyers so the landlord is left without a tenant with a fully equipped restaurant, and is very unlikely to rip everything out and convert the premises to another use.
So do your research and find an opportunity.
Present your credentials and a concept and a business plan.
Offer to run the place at a reduced or even zero rental for a limited time.
Perhaps offer the landlord a share of the action in in lieu of rent
Make sure your concept is in sync with the “new normal”
Keep it simple. Low staff overhead.
Always a quality product at a competitive price
Nothing ventured nothing gained!
Footnote:There are moments where you wonder what humanity has come to. And then there are moments that remind us there are good, generous, and kind people out there. Social media has allowed us to see that and give us hope in humanity during these really dark times.