The new venue was gearing to be something to everyone, which led to its own specific challenges in acoustic design. The intended new stage and sound system required significant improvements to the acoustic sealing of the hotel, including a three-layered ceiling system installed throughout the live music area, designed to both contain the sound and lower reverberation within the space, improving the experience for the crowd. White stressed it was critical to get this right, as a sub-standard job can leave the roof of the venue behaving like the “skin of a drum” that potentially amplifies noise outside.

Physical separation was also built into the entertainment space, allowing management to isolate this part of the venue from the public bar and dining spaces, assisting the management of ticketed shows and further control of the sound. 

The EJE team report previous renovations of the structure had diminished the integrity of many of the heritage elements, but there were still significant areas identified to be retained and celebrated. In particular were original bricks dating back to 1880 identified on the ground floor, which were stripped back to bare wherever found.

A significant opportunity was identified in the delivery of the improved and unique live music experience, coupled with the need for improved connection between the upper and lower levels – something White says becomes “increasingly important with the dining offering predominantly on the first floor” – leading to the creation of the mezzanine space, which was not in the original brief.

This also aided the desire for a larger public footprint, which considering that the hotel’s existing footprint was very close to maximum, left the only option being a strategy to maximise efficiency. A reconfiguring of the car parking, applying efficient design strategies for the back of house and bar areas, plus the creation of the mezzanine level, meant the new floorplan would almost double the publicly occupied areas.

White notes Zenith’s decision to fully close the pub to undertake the renovations goes against the trend, but that a portion of the downtime was consequently and fortuitously absorbed by the compulsory pandemic shutdown. Lazarus had dictated time be spent at each of the venues doing ‘the sort of things you never have time to do’.

A brief pause on the project when the crisis first hit facilitated planning that subsequently allowed a degree of renegotiation on works and purchases. Works resumed, and once government plans around the reopening of venues indicated that maximising floor space would put the Hotel in a strong position during restricted trade, the team swiftly moved to get all levels open and available to the public for Spring. White says the project was, overall, one for the record books.

“The pandemic has taught us all a great deal about our businesses, and the ability to remain flexible and respond to a rapidly changing environment has come out as a key strength of our practice.”

X-Factor

Pitching to a population accustomed to local musicians and local bands being offered at every pub corner virtually every week comes entertainment space ‘Live at the X’. It boasts a state-of-the-art sound system previously in the Sydney Opera House, and multi-level views of the stage, including the VIP mezzanine.

Behind the stage is a massive TV screen that will serve as a backdrop for performances, as well as screening the big sporting events, UFC nights and special meets such as the Melbourne Cup – complementing the brand-new TAB and Sports Bar – because if there is one thing as synonymous with Newcastle as live music, it’s sport. The television is thought to be perhaps the largest privately-owned screen of its type in the southern hemisphere and set to be front-and-centre for all key sporting events.

But the live music will take centre stage several nights a week, playing everything from local artists to national and – when permitted again – international touring artists.

“When people pay hundreds of dollars to see an international touring act, half the spectacle is in the light show, so I think having international and local bands, we want a good light show,” says Lazarus of the new stage and screen.  

FOOD & BEV

While The Exchange has only been open again since late September, Zenith’s other operations went through the trials of shutdown and subdued reopening along with every other pub. The skewed conditions have produced some unexpected results, as seen in the many hoteliers doing very well in their gaming operations. Zenith’s collection counts its share of gaming rooms, but also notes other upsides, such as the doubling of food and bev revenue at Shoal Bay, thought to be the result of reduced travel by locals.

The observed gains in f&b have prompted increased attention to menu options, including cocktails, at both Shoal Bay and Beaches, and Lazarus says the market has responded favourably.

Further spreading the big-smoke cuisine message to Novocastrians, from The Exchange’s ‘The Kitchen’ bistro will come “classic dishes, done well”. The stars of the menu are the woodfired pizza oven and fresh house-made pasta, with authenticity guaranteed by dedicated pizza chef Franco Malgioglio, bringing 24 years of experience perfecting his original dough recipe.

Upstairs, in the new Swill Bar, there are cocktails designed to not be considered super-premium, but embodying a twist on the classics so as not to appear mainstream. These have been custom designed by award-winning mixologist and Zenith Hotels’ group beverage manager Brent Tozer. The cocktail bar vibe is completed through adventurous interiors, low lighting, and DJs until 3am.

Lazarus believes the changes in demand seen this year in dining standard and availability, affecting both Sydney and Newcastle, are typical of the kind of opportunities emerging from the pandemic environment.

“Dining out at the pub culture has become front and centre, and good ones are doing well.”

To this end he is satisfied the new The Exchange is ready for its new role.  

“I’m confident we’ve covered our bases in terms of what we can offer to the public.”

Back on track

Lazarus has been in the pub game for several decades, but Zenith was launched this year, consolidating his acquisitions outside his partnerships in Sydney. He has largely relocated to the Newcastle area since falling in love with life at Shoal Bay, seduced during a multi-million-dollar overhaul of that establishment mid-2018. (Featured in PubTIC magazine May 2018.)

He cites a philosophy during the pandemic of reinvesting 100 per cent of cashflow back into the businesses, with the goal of maximising their potential on the other side. And while attentive of acquisition opportunities, he recalls the problematic nature of rapid expansion he faced back in 2004, and says he’s learned from the pitfalls.

Zenith has amassed what he describes as a “fantastic team” to lift the group’s offerings and profile. This has meant investing heavily in head office infrastructure, and pursuit of top-notch general managers and head chefs, with group executive managers across food and drinks, and an interior designer who worked for years within Merivale. Lazarus’ two sons are both in the business, and each hotel has its own director.

Now sporting a team that’s ready to shine, he maintains that great assets in good locations is “half the battle” but hints at an easing in the highly selective acquisition strategy employed to date.

“I brought in a whole bunch of really good people to be able to cover those four venues, in marketing and branding, and now I feel like I could roll out venues. The Exchange will be a test for the new outfit, but I think we’ve got all the things we need.”

Running the show at The Exchange will be Gareth Rattley, taking the role of general manager and licensee. Gareth joined the group bringing years of experience managing some of the biggest venues in Sydney, including Merivale’s Coogee Pavilion, Establishment and The Beresford.

Adding even more flavour to The Exchange will be Dane Jones, taking on duties as head brewer for the microbrewery now installed on-site. From here will come small-batch creations brewed as house beers, starting with the new formulation ‘Great Dane’, which is available on draught and reportedly proving very popular.

The altered environment of hospitality has shaped many changes in licensed venues, particularly those that have adapted to follow the money. Floor space and outdoor areas are more important than ever, customer expectations have lifted and their attendance patterns scattered, and a new-found emphasis on individual hygiene and personal safety has produced a gamut of new complications and concerns to address in the business model.

Yet some venues have thrived under the new rules, finding a new custom there to be had. This can be seen in the shift away from late trading at the Shoal Bay Country Club, with a result of increased revenue despite patrons tending to leave far earlier, representative of the revised nature of hospitality in 2020.  

“I guess I’ve learned the importance of having multiple streams, as opposed to being a dedicated nightclub or gaming venue,” notes Lazarus.  

“At the end of the day, if people have money in their pockets they want to be entertained, and they might end up spending their money on premium drinks and a nice meal as opposed to hitting the dance floor.”