 and welcome to Restaurants Hawaii on Think Tech Hawaii. I am your host, Cheryl Matsuoka, the Executive Director of the Hawaii Restaurant Association. In joining me today, I have two guests and it is my honor to introduce Greg Maples, the Chairman of the Hawaii Restaurant Association and Vice President of Restaurant Services at the Polynesian Cultural Center. I also want to introduce Greg and I would also like to introduce Ryan Tanaka, who is our incoming Chairman of the Hawaii Restaurant Association and the President of Island Business Management. Hey, Ryan. You're on mute, my friend. There you go. Hi, Cheryl. Hi, Greg. Hi. COVID really demonstrated as an association our strength and dedication to the food service industry. HRA has been supporting Hawaii's food service industry since 1947. That's right, 75 years. And I would like to go on record to say that these two gentlemen dedicated two years of their life, long hours, no days off, and many strategic planning meetings to support the food service industry and get us through this pandemic and we're hoping that we're near the endemic soon. So the food service industry is so grateful to both of you for all that you do for our industry. The restaurant and food service industry is among one of the hardest hit industries that was impacted by COVID. And today we're discussing what we learned in 2021 and what do we anticipate that 2022 will bring. First, let's discuss, as restaurant tours, what did we learn in 2021? Many restaurant tours and business owners are watching us. And I know that many are taking the time right now to reflect and to think about, you know, what did COVID bring to me in regards to my business? What did it reveal? So, Greg, what are your thoughts? What did we learn as restaurant tours in 2021 from this pandemic? You know, I think for me, there's probably five takeaways that I get from the pandemic. I'm sure there's a lot more and it differs per person. At the start of the pandemic, I think the majority of not only American restaurants, but certainly restaurants in Hawaii, you know, we made ourselves through what would be what we'd call in-person dining. And when the world shut down, when our islands shut down, and of course Hawaii, we shut down a little bit more often than the average, you know, we collectively struggled to figure out ways to generate more revenue, because that's what we really needed. We needed cashflow to stay alive. And those that succeeded embraced that terrible word, the pivot. A lot has been said about the pivot. But I'm going to venture to say that the most successful business is coming out of the pandemic are those that identified new revenue streams. You know, the operators who stayed open and pivoted their business would probably be ones that will survive and be around for a long time to come. And, you know, we used to come from, I think a paradigm we were coming from is that most of our revenue came from indoor dining. But at the moment, we didn't need that. We looked at our guests and we'd say, okay, we used to have you come to us all the time, but you don't need that anymore. What do you need from me? And then go and figure out ways to get to meet those needs. And it may seem like small things, but it's actually huge. And being able to put yourself into your customer's shoes and try to figure out what they needed was really a big part of that. I also think, I think we learned how to be creative. Whether you were creative or not, we learned how to be creative. Chefs, owners, operators, managers, you know, we're forced to get creative. We could no longer, we used to, we would say things now, we can no longer offer this, whatever this was in our old world. So what else can we offer? What do we have? I think that question got us out of our comfort zones. And for some of us, it was a long time in those uncomfortable zones. And together, we, I think as owners, operators, managers, teams, we brainstorm new ideas and put exciting new projects into the works. You know, there's so many ways that we've done that. But, you know, some of them that kind of mine, I have friends who went and did zoom cooking classes at home meal kits. We'd never heard about that from, you know, place like zippies, but look what they did. And now that's a regular. My family, we love zippies at home meal kits, retail ventures, self-published cookbooks. So I had a friend who she, she never in her wildest dreams thought she would ever write a cookbook, but she took $20,000 invested in publishing her own cookbook, sold 2000 copies at $40, made $80,000. That was a 400% return on investment. She never in her life thought she would ever do anything like that. But we've had to learn to do more with less because restaurants operate on razor thin profits. And, you know, and we had to ask questions that we've never had to ask before, things like what happens if we tightened our operating hours? What if we closed during certain days of the week? I mean, I have a restaurant that's closed on Wednesdays and Sundays. The close on a Wednesday is heresy, right? Who would ever think of that? But today, we're closed on Wednesdays. What if we ran three servers instead of fine? What if one manager could oversee everything instead of two? What if we shrunk our menu? What if we changed our concept entirely? What if our future lies somewhere else beyond food service? You know, we had to forget the business we had and focus instead on the business we have now. And once, you know, that business, once you dreamed of maybe gone, but you now have the freedom to dream anew, right? We had to come up with something new. And of course, technology was something we learned in 2020 and 2021. You know, we've been buying groceries at home since 2003. But the way we buy food in a restaurant has never been like it is now. Online presence, all the take home, it's never been as important as it is now. And clearly, we're not going to see that go away. And then the last thing, Cheryl, I think is, I think the pandemic has shifted our culture. We're witnessing the end of offices. Organizations are seeing how productive their teams can be while working remotely. They're starting to rethink what a traditional working environment looks like. And I think the data is clear, even after the pandemic, a large amount of workforce and office workers aren't going to go to the office anymore. And that's going to have a profound effect on the restaurant industry. You know, if meaningful amount of the workforce never returns to the office, what happens to the post work watering holes by the train station? What happens to happy or lunch concepts that we've stuck with for the last 10 years? If executives can work from anywhere who's to say they're not going to invite their people home for dinner, that's going to open up a whole new opportunity for us to do that. So the office culture is changing, schools are changing, our exercise routines are changing. I mean, there's a mirror I can buy that I can look at myself and it talks to me and tells me what to do. And I can work out in front of it instead of driving all the way to Coney Hoyt for workout. Obviously, I don't do that, but and should. But, you know, those are some of those things are brand new to us. And at the end of the day, those are things we've learned. And those are the things that we're going to have to embrace going into the future. Thank you, Greg. I agree with you on all points. And this is going to be so valuable to many of the restaurant tours that are looking at 2022 and saying, you know, I have to do one thing. What would that be? And you're right. You know, all of your list is accurate. So Ryan, what did you put your restaurant tour hat on? And what did you have as a takeaway from 2021? You know, well, first of all, thank you, Cheryl. And thank you for the introduction. I think you should also be recognized as one of the people who really was an advocate for the restaurant industry during the pandemic. So thank you for all of your hard work and your many contributions that we all have. We're indebted to you in so many ways. And what Greg has already covered really, I think, speaks to the, you know, the array of changes that restaurant owners saw. And they had to pivot. They had to get creative. They had to try all these different things. And even that combined wasn't enough. So I think if I were to just to add what Greg was saying, the three things would be taking care of your employees, right above us, just making sure that understanding they are the backbone of any restaurant of, you know, our restaurant specifically, and just to express our gratitude for them, you know, keep health and safety as our number one priority. And to find ways to be proactive in taking care of their needs, you know, looking out for them, they're taking care of the customer. So if you think about your, the consistency in your food and service quality is it can be a reflection of job satisfaction? Second, I would look at the landlord relationship. So many of these agreements were made pre COVID. So you have these, you know, mounting pre COVID lease rents and accumulating rents piling up for months in many cases. What do you do? And there's financial pressure on both sides. So how do you give a little, and that can be the hardest discussion to have. So finding ways to be proactive and be honest and pay some rent and yet, you know, be also forthright that, hey, this is the rally this is what we're facing, having those hard discussions and trying to find a way to make it work and stay and stay in there because in many cases, your landlord per the lease agreement can determine the fate of your restaurant. Last, in 2021, it was finding ways to take time to secure federal funding. There was so much money available. You know, in 2021, it was the second round of PPP restaurant equalization fund employee retention credit. And that employee retention credit is still available today. And Cheryl, you and your team have been an outstanding job at promoting that for all of the HRA members. And I would just remind restaurant owners, it's still available. So if you haven't already looked into it, talk with your GPA. If you are a Hawaii restaurant, facing restrictions, you most likely will qualify. Excellent point. Excellent. Excellent points. You're so true. I just had a call yesterday for somebody asking for us to refer one of our members who is, you know, an employee retention credit accounting firm. So yes, Ryan, absolutely you again, all true. So now the world is experiencing on the crime. And if there's one recommendation to a restaurant tour who has rode out the wave of Delta, and now we're on the wave of Omicron, there's one recommendation because we don't know what's going to happen in the future. We really don't. Whether it's a natural disaster, another pandemic or a financial downturn. So if there was a one recommendation to a restaurant tour to prepare for future waves of could be disasters, what would that be? Ryan, your thoughts? Great question. I would start with looking inside the restaurant and going back to Greg's buzzword of pivoting. You really want to pivot during the years ahead. And that starts today. And you may have not pivoted far enough. So it's looking at every part of how you do business and just adapting in real time to the ever-changing markets. The first would be just pivoting, whether it's finding new revenue streams, even expanding to new locations to diversify. You're talking about other forms of pandemics, whether the natural disasters I could hit. So that would be inside the restaurant. Outside of the restaurant, it's in my opinion is diversification. It's investing in real estate marketable securities, buying other businesses, other restaurants, other, going to other industries, making sure that, you know, if there are other pandemics or other global disasters or things that happen, it's just staying resilient so you can even flow with the market as it changes. Excellent. Absolutely. Because we don't know what the future will bring. And God forbid, you know, this be another disaster. So Greg, what is your thoughts on one recommendation to a restaurant tour to prepare for any future wave? I love what Ryan said. Clearly, great advice. You know, some of the things that came to my mind were we have to, we have to make sure, going forward, that we put our CFO hats on and remember that we might be coming out of it and come, you know, come in the coming months, we might start to see sales come back. I know personally that there's a lot of restaurants still carrying a lot of debt. My thing, my advice is, as Ryan said, look internally, but man, manage your cash flow tight. Now's not a time to go buy a new car, buy a new house. I do believe that there is an opportunity to invest and diversify like Ryan says. But you got to keep your house clean. You got to keep your house organized because this isn't over. And I know a lot of people who are doing really well because they got the government subsidies and assistance. I agree with Ryan 100%. We, and we, Cheryl, you've done such an incredible job getting that message out. But if somebody's listening to this and they're just now finding out about, hey, what are they talking about? You need to contact us because there's money still to be had out there and there may be more money coming. But you have to take care of your financial house because I, you know, I think we've got another 12 to 24 months of really managing our cash flow tight. And so you have to really get in and dig deep on what's important and what's not. And that's going to mean looking at things like what I talked about earlier. Do we need to look at shifts that are not profitable? We need to look at products that are not profitable. You really are going to spend the next 12 to 24 months finding, fine tuning and going through your business with a fine tooth comb, finding things that matter and things that don't, because I think that the business is still going to ebb and flow. So the industry, I don't think we're settled on what we're going to look like yet. I think it's still going to take a couple of years. And the other piece I would have is if you've made it this far with Omicron here, don't give up. Omicron is a different animal, okay? It's different. It's not like Delta. Thank the good Lord. People are not dying and we're not seeing hospitals filled up with people that have Omicron. Wouldn't that be terrible? Because we're averaging 4,000 cases a month here in the islands. But it's a different animal, so you've made it this far. Don't quit. Don't give up. So true, Greg. And I might as well discuss it now. I was going to use it in my closing statement, but the Restaurant Revitalization Fund, the National Restaurant Association, has really been, again, up at DC, knocking on doors as we're getting ready for the next session to open and letting them know that we want to refund the Restaurant Revitalization Fund. Hawaii was very lucky. One-third of our restaurants here in the islands received Restaurant Revitalization Fund, what we fondly called the RRF. But that means two-thirds did not. And so we need, we really need everyone to fill out the restaurant survey to let our delegation know that we need to refund that fund because it's a pure fund. It's a grant and you don't have to pay it back. And that's something that if we don't fill out the survey and give National Restaurant Association an opportunity to go to Washington and pound the payments for us, then, you know, I'm sorry, but we need to do it. We just need to do it. Well, and let me take a page out of the Ryan Tanaka book, which has been excellent. You know, Ryan has been relentless about telling people, even if you think you won't qualify, try it anyways. Nine out of 10 of the people who said they wouldn't qualify ended up qualifying and getting and got substantial amounts of money. And I just love how Ryan has been relentless with this because he has his own personal story about how his person was telling him and not going to, and Ryan, you can tell that story if you like. But I just think it's a, it's a great story that the average Joe entrepreneur out there might be like, oh, I'll never qualify. Trust us, try it. It's not going to, you know, we even have people who will do the work for you. You know, we know people that will actually do the actual work to tell you if you're qualified. But by golly, don't, don't give up, right? Don't give up on that. And if you're listening to this and you need help, I'm sure we'll have numbers at the end in places you can call. But my goodness, there are people out there that can help you at least give it a try. My, my guess is there's probably about 10, maybe 15% of the people out there that for sure wouldn't qualify for whatever reasons, taxes, not filed or whatever. But there's at least another third of the people in, in the restaurant business in Hawaii that would absolutely qualify. Ryan, you want to touch on the ERC then the employee retention credit because like I just mentioned, I just had a call yesterday. People are still calling me on it. And you're right, Greg, you know, if anybody has any questions about the employee retention credit, whether they qualify or not, all you have to do is email me at info at HawaiiRestaurant.org. Ryan, you want to tell your story? No, I think Greg covered it. Actually, there, a different experience is there was someone who their spouse was adamant that they wouldn't qualify. And it turned out that, you know, she got a second opinion and they ended up qualifying and they receive money. It's in their bank account now today. And that's a matter, again, $7,000 per quarter in 2021, the third quarter, $5,000 per employee in 2020. So the numbers are very high for restaurant owners. If you're not taking advantage of it, this is a really easy time because you have during this lull, right, of getting ready for this next hopefully wave of tourism, that new case counts, there is, you have to make the time to just, you know, put your, put your application in and see what happens and you'd be surprised. Thank you, Ryan. Yes, I know that she was very pleasantly surprised. So more, we have gotten so many calls because people don't really understand what it is. So we did have a webinar, we will continuously get that information out there. So, you know, right now, not only the restaurant food service industry, but other industries, you know, the retail industry, the construction industry, everybody is shorthanded and everybody's looking to build up their employee base. I don't know the company that is fully staffed at this time. So one of the things that I'd like to talk about is, you know, how do we keep our valued employees and how do we now put the word out that we have positions that we need to fill. Do you want to make any comments, Ryan? Sure. Let me, let me start with the pandemic has really brought us unprecedented times. And what it's done, you know, we've said it's put the pressure of the pandemic with ongoing restrictions on the backs of restaurants. And it's not just the owners, it's really the employees. So they're the ones carrying the brunt of all these new restrictions. And they're not being treated well, whether it's by the employer, by their colleagues, and sometimes by guests, unfortunately. So I was reading a study of different employees who left the industry permanently. And they're rationed off for leaving and this was on the mainland. And there were it ranged from undercompensated, undervalued, underappreciated, to not being treated well at all by customers. There were extreme instances where customers are yelling at them throwing food and being extremely belligerent. And for them, it was enough to walk away from the industry altogether. So there is a very real labor shortage. And these workers, you know, we had 100,000 employees in the restaurant industry in Hawaii pre COVID. How many tens of thousands have we lost? And we thought it was because of the federal plus up, we waited. And those jobs did not come back. And it's because they became disenfranchised with how much pressure they were, they were under, because of all these things that were happening. And it wasn't necessarily because of restrictions from lawmakers per se, but just the ongoing effects and the lingering effects of the pandemic. So there's been so many reasons why employees have had a hard time. And so personally, for me, you know, we've tried to show our appreciation to our employees, whether it's through increased wages, numerous wage increases throughout the year, proactive bonuses, multiple bonuses throughout the year, gifts, holiday gifts, and then resetting expectations, understanding that I'm not going to be able to use status quo and do the routine, but giving them the time and the autonomy to also address different fires in their personal lives. But there's been more people out sick. There's deaths of loved ones and, you know, people who are having their cars break down on them. And they need time to repair all that, right, to address that. So giving them the time, paying them for that time, and then thanking them and welcoming them back in whenever they're ready. So it's just been really passionate understanding and trying to compensate for the amount of pressure that they're under. And sometimes that misunderstanding, it can, it can go a long way if you don't have the chance to communicate with them every step along the way. So it's been a challenge and it's going to continue to be a challenge. And in terms of, you know, how do you then go from taking care of your existing employees to recruiting new employees? Word of mouth is going to be your strongest marketing tool. So they're happy, they know that you've been treated well. They won't tell their friends and their family, people who are looking for work. They're going to come in. You know, obviously you have the traditional advertising. The Hawaii Restaurant Association is doing a great job at tracking all of the job fairs, getting people who are interested in working at a restaurant, and then circulating at the restaurant owners to say, hey, then go ahead and contact them. These could be really qualified candidates. So if you're considering joining the industry, and then Cheryl, your resume, if you're a restaurant owner and you're looking for people, Cheryl is actually a great resource for you to find the fill holes. And right now, there's so many vacancies across the board for so many restaurant owners. You're so right, Ryan. You know, and one of my messages is even to future employees, even if you don't have a resume, and maybe that's not something that, you know, you're comfortable with, just give us a call. Just call me because if you call me, and I understand that not everybody has access to a computer and a printer and has a resume or knows how to design one. You know, we can put you together with a restaurant or somebody in your neighborhood. You know, Ryan, during the pandemic, I had so many people that don't have cars. And so, you know, if you happen to live in Nillilani, we have a list of restaurants in that area that have positions open. If you're near Waikiki, I can put you in touch with restaurants that have available openings at that point too. And you're right, Ryan. One of the ways is this is a small island. Word of mouth is the best. And with the youth coming in, you know, if everything's on social media, you know, I see a lot of companies and businesses, organizations all posting on Instagram, you know, that they're having, you know, positions open right now and people are looking at Instagram posts and saying, oh, you know, there's a list of benefits and benefits is one of the ways that people may have not realized they had flexible hours or they had medical coverage. You know, one of the things I'm hearing is as the pandemic settles down, people are realizing they've gone two years without any medical. And now they need medical coverage and they need, you know, work done. So one of the benefits is if you do work for a restaurant or a food service organization and you're more than 20 hours, we do also provide medical coverage. So Greg, how do you retain your employees and how do you find new employees? Oh, I'm so grateful for what Ryan talked about. All those things in you and he both are so important. I just had a conversation with somebody probably what's today, Wednesday, Tuesday, Monday, I guess it was yesterday. And we were talking about he's having success with sales, but he's not having success with employees. And so here's what I offered him. I said, here's what I've had to do. I embraced the pivot when it came to revenue, finding new revenues. I embraced the change in my menus. I embraced all of these things that I had to do, you know, all my supply chain, all the things that I had to do with, I really embraced those changes, all those things that I talked about in the beginning, those four or five things that I mentioned that we're learning, you know, we embrace those things. But what I did not embrace as fast was I need to take the same approach to how I deal with my people now. I need to pivot in the way I do things in my restaurant with my people. And a lot of what Ryan just talked about, how we organize ourselves, what are expectations for servers and for cooks and for those things, you know, all of those things we have to rethink those. Because if we go into the future with the same mindset that we had pre-pandemic, we're going to fail. Because if we're going into the pandemic and the end of the pandemic, having learned all of those things, we better be following those with new learnings that we had with keeping our employees. And so that becomes very, very important is to change that. I personally believe owner and operators who have been doing this for a while are smart enough to figure out how to keep their employees. But if they have the same mentality that they did before COVID, and they're trying to go forward with that same mentality when it comes to staffing, keeping, finding, and they've changed their ideas on revenue, but not on employees, those two won't match and they're going to have trouble. And of course, our business is about people. People don't leave companies, they leave bosses. Know that. And so we have to learn to take care of our people. You take care of your people, they take care of your guests, your guests take care of your profit. Exactly. And I realize also in any organization, it's constant training, having our supervisors and our team leaders recognize changes in our employees and staff and communicating with them. This pandemic has really brought to light that people are challenged sometimes with mental health and they need, because there's a lot of pressures at home where they're dealing with the stresses of COVID. So recognizing that and being able to communicate with them and care for our employees the way we care for our families, because our employees are part of our ohana. Though we've only got like five more minutes and I wanted to talk about 2022, where did the time go? So 2022 gentlemen, what does 2022 bring me? Oh my gosh, please tell me some good news, Greg Maples. Yeah, I listen, I'm an optimistic, like Ryan, I'm in you, I'm a half glass half full kind of guy. And so I really believe that we're on the way to something quite remarkable. I think people are going to, we've experienced this already, right? As soon as the pandemic felt like it was easing up, people ran to travel. They ran to travel. They love it. People will do it. I don't think the Asian markets are coming back anytime soon, probably not until the summer. That's a complete Greg Maples sitting in his office kind of analysis. But I think that's probably going to be the case. I think mainland's going to continue to want to travel. Why is an obvious destination? I think what we need to see is we need to see safe access eventually go away to allow people feel more comfortable to come. That'll help us in our sales as well. I think we've already seen a little bit of lighter in the restrictions, you know, the checklist when you get here makes people a little bit more comfortable. But I think 2022 is going to be good. I don't think that the first quarter is going to be great. But I think the last three quarters, we're going to make up everything that we lost in the first quarter. That's, that's how I feel. Thank you. And Ryan, we have two more minutes. I'm going to echo what Greg said. He's such a fantastic operator. And I wish more people had had time to just follow him around and really see how effective an operator he is and how much compassion and love he puts into what he does, not just into the logistical side of it, but into the employees themselves. So I'm really inspired by Greg and his comments. 2022 is going to be different, in my opinion. And I'm going to give you more of a negative end because globally we are still seeing inflation and we're seeing delays from the supply chains. The labor shortage is very real, not just here in Hawaii, but nationwide globally. But locally, we're still seeing the ongoing effects of new variants. Omicron is included. What's going to happen is new restrictions. How is that going to affect restaurants? As we continue to work with the, you know, now year three of the pandemic, which includes the halt of the international traveler and people still the changing of consumer behavior, people still being apprehensive to leave their home. And now with the double masking just because the Omicron is going to be so high. What's happening is restaurants are facing a very real possibility of closing their first quarter. That's real. You know, restaurants, they may have had a blockbuster summer 2021, but they didn't really make it out of the woods. And then once Delta hit and then Omicron and ongoing restrictions, unfortunately, we've had great leadership with Mayor Rick Blanchiardi and the neighboring mayors and Governor Igay and so many of our elected officials who have helped us to navigate through. And that's made all the difference, but that's only one part of it, right? Consumer behavior as it's changing, what I see restaurants doing is needing to pivot. So you're looking at the three things would be the online ordering and takeout, right? The online ordering ticket and delivery. Number two would be social media, so expanding your social media presence. And then hopefully last year, looking at re-engineering your menu. I don't want to say simplifying your menu in every case, but re-engineering it because with cost increases, you have to adjust prices. And in some cases, it is simplifying your menu to make it very easy for a guest to order. Thank you. Thank you, gentlemen. So in closing, I just want to thank Hawaii Restaurant Association's chairman, Greg Maples, incoming chairman, Ryan Tanaka. And again, Hawaii Restaurant Association is the voice of the food service industry here in Hawaii. We'll see you all in two weeks. Thank you, everyone. Aloha.