Modern Hospitality spoke with Andrew Harrington of AHV Associates LLP about the current challenges hospitality businesses are facing, and how they will bounce back.
Here's what Andrew had to say:
I have been in finance for more than 30 years, working at global investment banks from the late 1980’s to the late 1990’s and starting my own investment banking boutique, AHV Associates LLP in 2001. There are 6 of us at AHV, and we specialise in advising privately owned businesses on mergers and acquisitions, and all forms of debt and equity capital raising. Most of our work is in the hospitality sector.
This is the sixth major crisis during my professional career in finance. As with all these others, the general consensus is that the Covid-19 crisis is unlike anything before and that it will change the world.
My career began with the 1987 stock market crash, when financial liberalisation and errors in government policy resulted in huge moves in financial markets and a fear of another great depression.
Then we moved through the early 1990’s and the increase in interest rates to >15% to cure inflation. This caused a sustained downturn in the global economy.
The Asian financial crisis of 1997, caused by excessive foreign currency borrowing in emerging markets, resulted in many Asian and Latin American countries defaulting on their debts, and a fear of bank collapses etc.
The terrorist attacks in New York on 11th Sept 2001 were a major shock to everyone and had repercussions globally, especially in the travel and hospitality sector.
Finally the global financial crisis of 2008 to 2010 is certainly something that most people can remember and you do not need me to remind you how difficult that period was.
On each occasion, the general consensus was that we had not seen anything like it before and that it would change the world… and on each occasion, the general consensus was right, as it is now.
However, we are now in the eye of the storm and it can be very difficult to stand back and review things from a distance. My experience has taught me that now is a good time to force oneself to look through the current panic and focus on the key factors that will determine the future of the economy generally, and all our respective businesses in particular.
Thinking clearly now is really important as it will provide perspective on the current situation and enable the implementation of a well thought through strategy to survive and prosper post crisis.
Do not forget that we know how to resolve the crisis, and it is well on the way to being resolved in China, South Korea, Japan and other South East Asian nations. In many of these countries, economic activity is now rising strongly.