Happy 2014 … see you at the pub?
For many lenders, activity starts to slow down in December. Enquiries reduce and everyone seems to accept that the deals in progress will happen in January.
However, at Ortus our focus on the leisure industry meant December was one of our biggest ever months, completing over £5m of new loans. Most of the activity came from clients wanting to complete pub deals in time to benefit from the Festive Season trading. We were of course pleased to support them and, since we were working hard, it maintained the momentum on the rest of our deals. The result: a busy December and a very positive start to 2014.
Of course, it wasn’t all work and we spent plenty of quality time with our families. For me, as a father of two young kids, this mostly involved playing with toy dinosaurs (with my 3 year old daughter) and an slightly irritating musical pirate ship (with my 1 year old son). It also involved staying in on New Year’s Eve and watching the hordes of people making their way to our local village pub.
This sight, in our view, clearly justified the big push by our clients to finish their pub deals and benefit from the trade. However, taking lots of cash is not actually the big motivator. While the big High Street retailers might take 60% of their annual revenue in November, December and January, pubs have a relatively low revenue dependency on the Festive Season.
However, it’s a huge opportunity for publicans to turn occasional punters into regulars.
Indeed, as someone who frequents my local pub with reasonable regularity, I was struck by how few of the hordes of New Year’s Eve punters I recognised. Yet it didn’t surprise me and it showed the true challenge the Festive Season presents to publicans and it doesn’t involve selling a few extra pints before Big Ben strikes. Rather, it’s giving the punters the kind of festive experience which will make them choose a social experience over EastEnders more frequently during the rest of the year.
So, whether is a change in the menu, a fancy dress themed night, a spot of karaoke or a launch of new ales, the pubs who give those occasional punters something special stand the best chance of winning a new band of regulars. This will bring sustained growth long after the tinsel is taken down which is great for our borrowers.