An Invitation to Innovate
As the coronavirus knocked on doors, alumni in the hospitality industry answered with ingenuity
This article appears in the Winter 2021 issue of the University of Denver Magazine. Please click here to see more stories from the magazine.
Dara Wong (BSBA ’09) named her Flagstaff, Arizona, restaurant Shift because that was its goal: to shift the definition of a normal dining experience.
Five years later, that name holds an entirely new meaning—one that, as Wong sees it, encapsulates the experience of keeping the lights beaming and the doors swinging during a global pandemic that has, according to Business Insider, permanently closed 17% of the country’s restaurants and left millions unemployed.
“We joke around that we are Shift 8.0 at this point,” Wong says. “We’ve changed so many times—how we deal with dining, how we do different processes, adapting our dishes to be able to take them home. … We have to have a plan B, C and D for almost everything we do if we want to survive.”
Guided by state mandates and an unpredictable virus, Shift 2.0 meant a closed dining room and takeout-only menus. Down to only a skeleton crew, Wong got behind the wheel and delivered orders herself. When dining rooms were allowed to open at limited capacity, Shift 3.0 offered lunch for the first time and added basics such as sandwiches and salads. Every dollar mattered, and anything that could sell, did sell—even pantry items like bags of flour. Shift 4.0 maximized each available seat via a four-course, prix fixe menu. And so on and so forth.
This has been the picture across the hospitality and tourism industry, from restaurants and hotels to cruise ships, airlines and ski resorts. With folks hunkering down and business travel completely frozen, the industry has scrambled to find its pulse.
That’s been as true in Denver as elsewhere. Prior to COVID-19, tourism, business travel and conventions produced 60% of Denver’s restaurant spend, says David Corsun, associate professor in DU’s Daniels College of Business and director of the Fritz Knoebel School of Hospitality Management. That’s largely evaporated.
And while some hotels, including those offering extended stays and those situated near hospitals, are doing “gangbuster business,” Corsun says most others are getting “slaughtered” thanks to the travel standstill.
Recovery from a pandemic that has claimed more than 350,000 U.S. lives may feel desperately out of reach, but with vaccine distribution underway, there’s finally a twinkle of hope for an end to COVID-19.
For those hospitality enterprises that survive, Corsun says, that twinkle could grow into a sunburst.
“The future is very, very bright. This is an industry that has been around forever and will continue to be. It serves really significant human needs,” he explains. “Anybody who is able to make it through is going to thrive post-COVID.”
The travel industry saw a glimmer of normalcy last summer when virus rates dropped and domestic travel grew. According to Karen Xie, associate professor in the Knoebel School, this was particularly beneficial for short-term rental companies like Airbnb.
“There’s a trend called a ‘staycation’ or a ‘nearcation,’ and short-term rentals caught that trend very quickly,” Xie says. “They encouraged their hosts to offer longer-term rentals and to cater to peoples’ needs. They definitely shifted much faster than hotels in order to embrace the challenge of COVID-19.”
Xie expects Airbnb to bounce back quickly as increasing vaccination rates boost comfort with traveling, but both Xie and Corsun see a slightly longer road ahead for hotels, which are more dependent on business travel for revenue.
Although many prognosticators (among them Microsoft co-founder Bill Gates, who declared more than 50% of business travel forever dead) see only cloudy skies ahead, Corsun expects a return to 2019 numbers, by 2023.
Alumnus Dave Johnstone (MBA ’87), chief investment officer for hospitality at Colorado real estate investment company McWhinney, agrees. “I just happen to believe if you’re trying to connect with someone, sell them, convince them, people won’t be using video conferencing,” Johnstone says. “We’ve had this video conferencing capability for 30 years and we are now being forced to use it. Will some people continue? Yes. But not 50%.”
Another plus, as Johnstone sees it, is the investment potential possible once the pandemic subsides. Both banks and private equity funds have been sitting on the sidelines, and post-COVID, he expects they’ll be ready to pounce and create new projects to fill the holes left behind by COVID closures.
For hospitality pros like Wong, and a host of fellow DU alums, hanging on through COVID’s numerous curveballs has been an exhausting grind, and business on the other side will certainly look different. But not all of the changes will be for the worse.
Placing added importance on communication has been the key for Navin Dimond (MBA ’86), CEO and chairman of Stonebridge Companies, a Denver-based hotel development and hospitality management organization. Back in March, Dimond, a DU trustee, began meeting with his team every single day, and he hasn’t looked back.
“What has that really done? We realized, boy, this is really beneficial. The rate at which things are changing is so fast, which means the rate of our communication must change with it,” Dimond says. “Communication is vitally important, always, but in these times, it has become even more important.”
Jon Schlegel (BSBA ’97), co-founder of Denver restaurant Snooze, opened a new winery called Attimo in late 2019 and planned to spend most of 2020 building the brand and relationships. Instead, Attimo accelerated its plan and brought its wines directly to customers through virtual tastings and deliveries.
“Virtual tastings are actually a blast,” Schlegel says. “[It’s] amazing to have 50 people on a call at one time, with only five folks in the actual event space. It’s been wonderful to go through the wines, show the maps and have folks tasting at the same time.”
Christi Coors Ficeli (MBA ’02), owner of Napa winery Goosecross Cellars, also has found joyful sparks in innovation through the pandemic.
“Trying to make the business survive was actually the fun part,” she says. “We got to get creative and think of new ways to sell wine. We sell 100% of our wine from right here on the property, and not having visitors really hurt. But we conquered that through phone calls to our wine club members to check in with them and sell them wine. We pivoted to virtual tastings where we sent the wine to each person attending and hosted them virtually; [and] we conducted Facebook live tastings where we did food and wine pairings.”
The beauty of these business-survival ideas is that they aren’t born from competition, but from collaboration. As Coors Ficeli says, “With a high tide, all boats rise.”
In fact, hospitality businesses in every pocket of the country—Denver included—have pulled together, notes Adam Schlegel (BSBA ’99), co-founder of Snooze and founder of local chicken joint Chook.
“Our community has always been really strong, open, communicative. You hear from restaurateurs across the U.S. how surprising and warm Denver is in welcoming and collaborating,” he says. “It was no more evident than in the past seven months. Small indies, large chains, private and public came together, especially in the initial stages.”
The same is true for Tampa, says DU alumnus Richard Gonzmart, the fourth-generation president of the Columbia Restaurant Group, which has survived pandemics, world wars and the Great Depression in its 115 years. He notes that hospitality leaders in his community stepped up not only to help each other, but also in the greater fight against COVID.
“In this area, a group of Tampa’s oldest and most respected independent restaurants banded together as ambassadors and advocates to seek support, tout health and hygiene measures, and present a united face to the community,” he says.
DU trustee and Denver real estate developer Mark Falcone, founder of Continuum Partners, thinks the need for community will drive demand for everything from neighborhood restaurants to wineries and resorts. After all, people have an innate need to gather together, and not even COVID can challenge that.
“Humans have evolved to need close contact with a consistent community of others to prosper,” Falcone says. “I don’t think one 12-month period of forced separation will fundamentally change tens of thousands of years of evolutionary biology.”
So, when it’s finally safe to travel again, to toast a big event and to connect with friends over a delicately prepared meal, chances are high that the hospitality industry will have the welcome mat freshly laundered and at the door.