Alex Smith is CEO of Atlas Restaurant Group, a Baltimore-based hospitality company that also has properties in Washington DC, Houston, and Boca Raton.
We shut down all of our properties when lockdown hit. We went from 16 properties to zero.
We kept all of our management staff on payroll throughout the crisis. We had to furlough a lot of our other staff, just like most restaurants in the country. But May came around, and we bounced back. We offered everybody their job back.
We found a lot of people wanted to get into other fields that were a little bit more secure. There was a lot of uncertainty in the restaurant business. We took this as an opportunity to recruit and build our team with really talented people who were looking to get out of some of the major cities. We knew we were going to at least sustain what we had, or grow out of this.
We opened all of our properties back up, and we’re doing about 75 percent in our Baltimore and DC markets of what we did the year prior. That’s because we had a ton of outdoor seating. In Texas and Florida, we’re at 100 percent year-over-year in revenue as of September. Those markets have bounced back a lot quicker than the East Coast. We expanded our outdoor seating areas with heaters. We worked well with the cities to try and get expanded outdoor patio areas. That’s obviously been very helpful.
Before COVID, our properties were cash-flow positive. We knew that getting back to a sense of normalcy wasn’t necessarily about making money. It was about making sure that the operation was run to the best of our ability and to the same standard that it was run before. That was our number one concern—to safely open back up for our guests and for our employees, but also to return to a sense of normalcy.
A lot of restaurants cut their menus, or they limited their hours, or they just had to-go food. Our mentality was that we need to offer the same product that we did before. We need to offer the same live entertainment we did before, the same atmosphere, the same experience, the same hours. But let’s do it following the CDC guidelines. Let’s do it safely. Even though we’re not making money, let’s bring our guests back to the experience that they had before. Our biggest concern was if we weren’t doing those things, and then all of a sudden the guests come back and they’re like, well, this isn’t what it used to be.
That’s why we ramped up hiring. Obviously the PPP loan was very helpful with that, because it allowed us, even when losing money, to sustain payroll for a few months.
We were looking to hire and we had some recruiters out there, but at the same time, my LinkedIn inbox and our company email website for careers were just absolutely flooded with people from DC, they were flooded from people from New York. There were a lot of hospitality professionals in major tourist cities that felt like, hey, things are not going to be back to the way they were for at least a year or two. This is a great time to pivot to a middle market like a Baltimore or an Austin or a Nashville. The biggest thing we hear all the time from new hires from big cities is, “Man, I’m paying half the rent and my place is twice the size.” I think it’s a quality of life issue. People are looking to get out of bigger cities, and that leads them to us.
For example, Christine Langelier is now our director of operations for hotel properties. She was a service manager at Eleven Madison Park in New York. When I was on the phone with her during the pandemic, I was like, “You know, Baltimore is a very different market with very different restaurants.” She was like, “I get it, but it’s time for me to move on from New York. You guys are a growing operation, and I really want to get into hotel properties. The Four Seasons and your properties there fit me very well.” We were just like, “Man, how unbelievably lucky are we to get the service director of EMP to come down and help us in Baltimore?” We thought it was a very cool transition.
And Marc Hennessy, who was executive chef at Rare Steakhouse in DC—he’s going to be running our new French steakhouse concept called Monarque in Baltimore. Aksel Theilkuhl was at the DeBruce in the Catskills, which is one of the top inns in the country. He’s now executive chef at the Bygone. Ryan Harris was a director of operations for the Starr restaurant group in Philadelphia. He was looking to move to a smaller city, and he also came to Monarque. A lot of talented individuals that ran big operations in other big cities all relocated here and have fit nicely into our company, helping us grow in this market.
I used to get between 7 and 10 applications annually from a major city like New York or LA or DC—people that were considering relocating to a middle market like Baltimore. This year, in the three months from March 15 to June 15, I probably had 75 applicants from LA, New York, Miami, a couple from Las Vegas, DC. Big markets.
One of the things that we explain to chefs from out of town is that in a market like Baltimore, you can’t have a really small menu. It’s not like New York where you can be hyper-focused on one type of thing. You need to have more options for your guests. There needs to be approachability there. But people in Baltimore know quality of product. And we give our chefs a certain level of freedom to create on their own. They’re not being tied down to some kind of corporate chain. That’s just not what we do. We love the fact that we’re getting really talented people, and we want them to grow our company and experiment. People in our market love creative food. They love seeing something different.
Baltimore’s a middle-market town where the restaurant scene is obviously growing. It’s an opportunity for us to get some really talented people in the marketplace and expand in Baltimore with those people. And not just in Baltimore, but in other middle-market towns where you normally wouldn’t hire a service director from Eleven Madison Park in New York, or an executive chef from a $10 million steakhouse in DC. You’re getting people that are going to be able to bring a new flavor to this town.