Calligeros Hotels.
Hands on ... "I like to walk into all my pubs and have people sitting at the public bar say 'G'day Pete, how are you going?' I like that whether it's out at Bargo or in North Sydney," says Peter Calligeros. Photo: Jon Reid
The Business Network
Problems aplenty down at the pub
Janine Perrett - Editor
Friday, 28 January 2005
http://businessnetwork.smh.com.au/articles/2005/01/27/1532.html
When Peter Calligeros picks up the paper in the morning it's usually with a touch of dread, not knowing which particular story is going to be the latest unexpected pressure on hispub business, writes Janine Perrett.
Browsing through the paper one Saturday, he was horrified to read an advertisement calling on people to join a class action suit against hotels over gambling.
"Not the clubs or casinos, but only the pubs," notes the Sydney publican, who often finds out the latest obstacle to his small business this way.
"Some mornings I've opened the paper to find they've passed a new law over gaming machines or smoking or having a compulsory three-hour shutdown.
"The upsetting thing is often we don't know where the pressure is coming from as the decisions seem to be made overnight.
"There are days I ask myself what am I doing? My core business is to sell beer but some nights I'm just up reading and answering questions. I've got to constantly be thinking about putting up umbrellas before it's even raining."
It's no wonder Calligeros cites external pressures outside his control as the biggest challenge facing his business, which comprises the century-old Rag and Famish Hotel and the brand new Mount Street Terrace Hotel, both in North Sydney, and also includes the Bargo pub, near Wollongong.
George Calligeros founded the family hotel business 35 years ago and son Peter came into it at only 18 when he was the youngest licensee ever in Australia. The 32-year-old now runs the firm with the help of his sister Anna but admits the succession was not easy; indeed, George is still visible, and vocal, in the background during our interview.
"The succession has been very difficult. I go out a lot, eat out at restaurants and have a great vision about where we should be going. Try telling that to an 80-year-old publican who is used to sitting at the end of the bar smoking Peter Stuyvesants and drinking a middy of Resch's. At his age it's very difficult because I know he wishes he had another 20 years in the business."
Peter's obvious deep admiration for his father and respect for his business values have resulted in a healthy mix of old-fashioned common sense and modern publicanism.
Nowhere is this more evident than in the family's two North Sydney hotels, situated within a few minutes of each other. George bought the Rag in 1978 and Peter describes the flagship pub as still "a gentleman's hotel", with the emphasis on food and drink and only a handful of pokies. The Mount Street Terrace hotel, which opens in two weeks, is a departure for the family in that it is a new development and a more boutique, upmarket style.
"The new pub will have many of the same issues but I will also have to be a little more focused and have to target the customers more carefully. The old hotel has goodwill and at this one I have to create it," he says.
"This one will attract more businesswomen, for example. I might have to change my own style from Publican Pete at the Rag, where you have a chat with the customers. At the new one they won't want to know the barman's name, they want to pay their $5 for a drink, sit down, get the table wiped, talk business and not be disturbed. They will be more aloof."
It might not be so easy to change his laid-back management style, which Peter admits has had pluses or minuses for the running of his business.
"I like to walk into all my pubs and have people sitting at the public bar say 'G'day Pete, how are you going?' I like that whether it's out at Bargo or in North Sydney.
"I don't know whether it's right or wrong but I know it's the way my father has done it and it's been successful for him. You need to stay approachable. I'm also very hands-on. In the hotels my sister Anna still waits table and we both clean up glasses and pick up ashtrays.
"But if you ask what is my biggest weakness I would say that I try to solve everyone's problems - I have trouble sorting the issues from the non-issues. Sometimes I get so wrapped up in these smaller issues, say from a customer who is whingeing at the bar about something, at the management meetings they have to tell me to just drop it."
As customer relations issues become more complex in his industry, so too do staffing requirements. His pubs employ about 70 people, many of them casuals and part-timers. Peter Calligeros welcomes one stringent new law for improving the quality of staffing.
"The Responsible Service of Alcohol act has been a great thing for the industry, I agree with the philosophy behind it because you need a licence to do everything else.
"In Australia, working in the hospitality industry has traditionally been part-time work, whereas in America it was seen as a profession.
"That has definitely started to happen here - chefs are being recognised, pubs and clubs are headhunting good barmen from each other."
The old-fashioned publican emerges when he expresses his suspicion about new technology, admitting he's pig-headed and prefers to check everything personally, from the individual beer price to the number of kegs.
"Blokes come in and tell me all these you-beaut things I should have, yet nothing annoys me more than walking into a hotel and ordering a schooner of VB and the barman takes 20 minutes just to get the screen up and to hit a button to get the till open."
Yet he is spending more time these days on cost-cutting. "We've always concentrated on making, making, making - and that's great but we also have to look at everything from cutting out STD calls on phones your staff can access, to new deals with beer glasses. Let me tell you, those little things can make a difference of 3 to 5 per cent on your bottom line overnight."
Unlike many expanding hotel groups, Calligeros is adamant he does not want the family business to become too big or impersonal. He is also obsessed about not incurring debt because of those external pressures.
"Sometimes when you are highly geared they can make a ruling overnight that can affect your business and put you under a lot of strain," Calligeros says.
"I don't need to conquer the world at 32. I'm not saying I don't want to grow but how do you grow without debt? Sure money is cheap but I don't want to be dependent on anyone. My father is 80 and I'm not going to put him under a lot of pressure; all I want is that he knows when he goes to his grave he's left his business in safe hands."
CHALLENGES FOR CALLIGEROS HOTELS
·External social and political pressures.
·Marketing new hotel to different customer base.
·Too much micro-managing.
EXPERT COMMENTS
Rajarshi Ray - Head of Small Business Services - American Express Australia
Peter is being hard on himself. His industry has faced dizzying social and regulatory change in recent years, so to not only hold ground but actually grow and prosper suggests that Peter and his father definitely have their fingers on the pulse.
Kevin MacDonald - General Manager, Operations - Australian Business Limited
My initial advice to Peter is to stick with what has been successful for the family business – greeting people with a smile. Patrons like to feel welcome when they walk into a pub. They like a relaxing atmosphere, friendly staff, cleanliness and a variety of food and drinks. In the new venture, Peter should not assume his new patrons will be any different. He may need to adapt to the preferences of his new customers as he learns how their tastes differ.
Paul McKeon - Corporate Communications Manager - Dell Australia and New Zealand
The Rag and Famish is a Sydney institution. Peter and his father have created a successful business because they know their core trade is more than just selling beer; it’s about creating an atmosphere that entices people to come back.
George Frazis - General Manager, Business and Private Banking - National Australia Bank
The biggest issue currently facing Peter and his industry is what I call the ‘smoky horizon’: the imminent ban on smoking in pubs and clubs throughout New South Wales, which comes into full effect on 1 July 2007. Peter needs to work out how this law will affect his business and develop a strategy for minimising its negative impact. The ban could mean some smoking patrons no longer visit his pubs.
Christine Holgate - Managing Director, Business and Marketing - Telstra
Marketing to a more affluent clientele could include giving the bar a fashionable and trendy image. This type of marketing is best accomplished by word of mouth. Recommendations from one patron to another are often the strongest form of endorsement and will help give the bar the trendy feel required to attract a new crowd. Peter should look for ways to encourage patrons to bring friends to the new bar.
Rag and Famish website:
http://www.ragandfamish.com.au/
