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Ray Byrne – making a Splash

One of the most high-profile pub receiverships to date has been that of Capital Bars. With growing numbers of receiverships in the hospitality industry, there’s now demand for a canny operator to work on behalf of the Receiver at the sharp end of the business. Ray Byrne of Splash Hospitality is one such operator, now in charge of three outlets in the Capital Bars Group including the high-profile Café en Seine. Pat Nolan spoke to him about the secrets of operating a bar in receivership successful

Professional management of pubs in receivership has become a new area of expertise, says Ray Byrne of Splash Hospitality, which specialises in managing hotels and pubs on behalf of the owner – or more commonly these days, the Receiver.

“I’d say that Receivers are feeling their way into it,” he reckons, “Receivership is a delicate balance between keeping the business open, stemming trading losses & inefficiencies, turning the business around and rebuilding it. It’s hard to get all three aspects right first time, especially when Receivership, by its nature, is a cumbersome device.”

Back in the early noughties, having made a success of his Wineport Lodge in Glasson – home of the RTE1  series The Restaurant – Ray believed the time had come to expand.

The Celtic Tiger stalked business and he found himself working with investors keen to open hotels to avail of the tax breaks, but who didn’t have the expertise to run them.

ldquo;They brought me in as a management expert to provide that service to them,” says Ray, a former RAI President.

All went well for a few years for his company Splash Hotels, but as the building game went West, a number of these investors went broke in the increasingly adverse economy. Ray therefore adapted his business management model to the insolvency sector, towards Receivers who’d gradually begun to recognise the value of having some one able to run successfully operations now in receivership.

“That’s the direction the business was taking in 2008 and we’ve been moving in that direction ever since,” he says.

Receivers realise that nothing’s selling, that the ‘quick kill’ isn’t going to happen. Reputations are thus being created by good operators who ensure they stand out from the crowd.

 

Capital Bars had been in examinership prior to the banks appointing a Receiver and Ray’s previous relationship with FGS in operating hotels and pubs provided the Receiver with a fair idea of his ability to build a team “and give 100 per cent  commitment to the business”.

 

With the inclusion of bars such as Café en Seine, The George and O’Dwyers in his portfolio, Ray changed the name of his management company from Splash Hotels to Splash Hospitality which he runs in conjunction with business associate Ray Hingston (10 years with Radisson Hotels and Restaurant Manager at L’Ecrivain for 10 years before that).

If truth be told, when he first laid eyes on the three Capital Bars operations he was expected to run on behalf of the Receiver he found himself somewhat disappointed.

“The energy had gone out of the operation,” he recalls, “In order to try to sustain the business, they’d made cutbacks on overheads, but not put anything back in in terms of innovation which only served to further demoralise the staff there who’d been through difficult trading periods, Examinership and now Receivership — so they really were at a low ebb.

“You can sense the energy in a good Irish pub immediately and we sensed there was no energy here; it was most manifest when going in as a customer.”

Ray also noted that the fabric of the bars themselves had become tatty. Cleaning was not being undertaken properly and bulbs, for example, remained unchanged when broken, he says.

“Service was not good and there was no ‘Wow!’ factor on going in as a customer.”

But he underlines his huge admiration for what the original owners Liam and Des O’Dwyer built here by stating, “In fairness to them, they had fantastic concepts and they picked really good locations. And that’s so important”.

After 16 months, things look considerably more sanguine at the Dawson St premises.

“When we first went in there we produced an annual budget. At the beginning of 2010 all the indicators were telling us that the second half of 2010 was going to be the start of the comeback of the economy following a difficult first half.

“This didn’t materialise in the second half, so we set about repositioning the business and working on a three-year business plan as Receiverships nowadays are likely to be a medium-term solution rather than a short-term one.

“After that, there’s some optimism that the market will see some recovery. Receivers and banks don’t want to be in the pub business but in the meantime, they want to get the best return they can for the bank’s money.

“The more we can drive the business, the more the value will increase and the more debt they’ll recover.

“Now our challenge is to deliver that business plan with a target – and if possible to exceed that target.”

For the three Capital Bars outlets (with up to 3,000 customers at any one time), he delivered a six-figure EBITDA in 2010.

In running an outlet on behalf of the owner/Receiver, the most important challenge remains getting the staff of a business – the team – onboard from the outset, during the hospitality equivalent of the ‘golden hour’ in A&E patient trauma.

“That begins with management,” he explains, “This needs to be restructured or refocused – either or both. They must understand what you want to achieve and buy into that. If not, move them on, find people that do understand.

“I also found that we’d to be very engaged and hands-on in the business.

“I need to know who’s doing the cleaning, who’s collecting the cash, balancing the tills and watching the CCTVs.”

The market is constantly changing and Ray’s company must be there all the time.

“It’s not a nine-to-five office-type environment,” he adds, “We’re required to be there at 3am on a busy Saturday night and there again at 10am when suppliers’ reps are coming in looking for orders.

“The secret to our success is that we run the business as if it’s our own. Our remuneration is performance-based.”

They keep up with trends by visiting other properties, pubs and nightclubs in London.

“We need to know what our competitor outlets are doing, thus we can benchmark what we’re doing.”

PR is hugely important, as is word-of-mouth. He’s appointed market-specific PR companies to match the character of the outlet in question and runs in-house promotions according to the outlet profile.

For example, he launched a VIP loyalty card for Café en Seine, “… which gave all the movers-and-shakers around town a 25 per cent discount. As a result, others followed them here”.

In the case of O’Dwyers’ Howl at the Moon nightclub, he’d to target a younger crowd, more club–based, by making use of Facebook, running promotions and sponsoring programmes on Spin and FM 104.

He also worked with Leinster Rugy and with UCD Students Union to hold suitable promotional nights there.

In venturing into bars, Ray hadn’t realised how profitable they could be if handled right. He now believes that there’s a great future for the pub business, “… certainly in Dublin whatever about outside of Dublin”.

He realises too that

The pub business is no different to any other business, “… except the need for relentless application to the business and attention to detail” - Ray Byrne.

The pub business is no different to any other business, “… except the need for relentless application to the business and attention to detail” – Ray Byrne.

.

There’s much to learn in the parable of Splash.


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