Pivoting businesses to stay afloat

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Chief executive and founder of the Capital Hotel Group, Marc Wachsberger, came up with the concept of sanitised sanctuaries in his hotels to keep operating under lockdown.
by JORDAN MOSHE | May 28, 2020

When the country went into confinement, many industries couldn’t operate. Some entrepreneurial innovators pivoted their businesses into a totally different models to stay viable. Wachsberger was one of them, turning his hotel apartments into a safe space where touchpoints were routinely sanitised. He later launched isolation hotels for returning travellers to see out their isolation period.

A panel of such entrepreneurs shared their experiences on a SA Jewish Report lockdown online webinar last week hosted by SA Jewish Report chairperson Howard Sackstein and entrepreneurial mavericks Elian Wiener, the founder of Wealthwoke, and Richard Rayne, the chief executive of e-learning platform, iLearn.

They unpacked the concept of business pivoting, a popular term in the start-up world which means entrepreneurs finding a way to change their business fundamentally to meet the needs of the market.

Advertising agencies, restaurants, hotel chains, distributors, and entertainment service providers were among those who shared their experiences.

“The hotel industry has been decimated,” said Wachsberger. “We were actually having a record period, and February was a record month with more than 80% occupancy.”

This all changed with President Cyril Ramaphosa’s first COVID-19 address.

“We dropped to 10% occupancy in one fell swoop,” said Wachsberger. “We realised that going forward, it would be less about comfort and more about safety. We pivoted in 48 hours.”

The hotel adopted the “sanitised sanctuaries” concept, creating a safe hotel space in which all touchpoints were routinely sanitised. Things got worse when the country went into lockdown, however, and it had to innovate again.

“We started renting out our apartment spaces in long-term arrangements, and launched hotels in which returning travellers could isolate for 14 days,” Wachsberger said. “This enabled us to continue operating during lockdown.”

The company subsequently added the Get Well Hotel to its offering, creating a space in which patients who test positive for the virus could recover away from home.

“The industry hasn’t adapted, and has left space for us to change things up,” said Wachsberger. “It’s important to keep the wheels turning while stopping the spread of the virus.”

Entertainment industry mogul Deelan Moodaley has also felt the pinch, forcing him to devise new ways to run Joburg Life, an events-management company he founded in 2000.

“We last traded on 14 March,” said Moodaley. “Our whole operation came to halt the next day when the president spoke, and it was time to reinvent the business.”

Over the past few weeks, he and his team have devised Helivation, an upcoming live music event featuring more than 30 DJs and broadcast from a helipad in Sandton without a live audience.

“Everyone has watched entertainment live in their homes recently,” said Moodaley. “We want to put on a festival with no one present except for the artists and production team.”

The event will take place over two days in June, and will cater for all tastes in popular music, costing only R50 per ticket, and open to view online from anywhere in the world.

Said Moodaley, “I employ on average 15-20 DJs a weekend. They haven’t worked since 15 March. If I don’t try this, I’ve gained nothing. If we don’t change now, what do I do? Sit at home for three months? I don’t know when I’ll host another event or when I’ll open the doors of a club.”

Moodaley said that “business as usual” had changed completely for him, and he’s hoping that the pilot of this unique event will enable him to assist other figures in the entertainment space.

For restaurateurs Larry and Annie Hodes, lockdown brought their Birdhaven dining spaces, Voodoo Lily and Arbour Café, to a grinding halt. This in addition to the earlier shut down of Calexico, a beer yard they operated at the iconic 44 Stanley.

“We had to close just before lockdown because it’s a live music bar venue with a lot of people,” said Larry. “We experienced a decrease of about 90% two weeks before the president’s speech.”

Ten days before lockdown, the couple launched Dark Kitchen, a delivery model restaurant. Unfortunately, they could begin operating only at level-four lockdown but in anticipation of that, they devised a unique service.

“Just before Mother’s Day, we had an idea to create a grocer,” they said.

“We put out a message asking our suppliers if they had premium products they would like to showcase that would work in a gourmet restaurant, something unique and artisanal. Literally 24 hours later, we had a retail store, and collaborated with a lot of small suppliers who have previously mainly supplied restaurants and had no avenue to sell their products.”

Doubleshot coffee, Ooh La La Confectionery, and health conscious offerings from Superfoods were soon being stocked and flying off the shelf within record time. The Voodoo Lily restaurant space which previously held tables was transformed into a store with shelves and fridges, all stocked with items ready for purchase and delivery.

Numerous parties are supported by the model.

“Every time someone purchases something, not only are they supporting us but the little supplier as well as the staff members we’re continuing to add,” the couple said. “It’s gaining momentum, and we’re growing as we go.”

They encourage other entrepreneurs and small-business owners to look to the innovations around them for inspiration.

“Go and see what everyone is doing,” said Larry. “Within each industry, there is something special someone has done. Some of the best ideas that have come about have been created in desperate times, and this is one of them.”

Many business owners are putting themselves second and placing their staff and business above their own needs, Rayne said. “People who have the luxury of making a purchase decision need to think carefully about how their purchase is the equivalent of a donation.” “They’re basically feeding families, paying staff, and keeping people going.”

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