Convene’s Simonetti: ‘We’re incredibly bullish on London’

Convene has just unveiled its largest meeting and events space yet at Paternoster Square in the City of London – 15 years after founder Ryan Simonetti opened the doors at the hospitality company and a handful after he thought the pandemic might close them for good. No wonder he’s celebrating. On a visit from New York, chief executive Simonetti meets EG less than half an hour before the opening party for Convene Sancroft kicks off. Striding through the 45,000 sq ft of Convene space – part of a bigger, Greycoat and Mitsui Fudosan-developed block – Simonetti has a warm welcome for everyone who crosses his path, whether a fellow Convene executive, a server getting a canapé stand set up or, as we intrude in a busy kitchen, the site’s head chef. He seems to know everyone by name and everyone is clearly happy to see the big boss. By the time we sit down to talk about the opening and the wider Convene business, Simonetti is more reflective. This is a period of change for companies like his, coming to terms with the post-Covid-19 recovery and steering through industry consolidation. Simonetti and colleagues set up Convene just as the world came out of the global financial crisis. Having sealed a 2022 recapitalisation led by HBC and Ares, Simonetti is keen to look forward – but not to forget lessons from the past. “It’s been a long, winding road – a financial crisis, a pandemic thrown in,” he says. “It’s been one heck of a ride.”   A tale of two cities London is an important location for Convene, even more so since the company bought etc.venues. The company now runs four Convene sites in London, with 10 further sites in the capital branded as etc.venues, one in Manchester and another in Birmingham. Even as Sancroft opens, Simonetti is thinking ahead, pondering picking up sites in King’s Cross or the West End “if we can find the right landlord partner”. “If you look at our business, although we’re in quite a few cities – in the UK we’re in Manchester and Birmingham, in the US we’re in San Francisco, Chicago, Boston, DC and Philly – New York and London are by far our two biggest markets,” he says. “We’re incredibly bullish on London as a mega city, as an economic hub, as an attractor of talent and as a centre of commerce. And for our business, despite all the talk of work-from-home and opening flex spaces and co-working spaces in the suburbs and in small towns all across the world, we’re very much focussed on the big urban centres.” Pandemic lockdowns shut the business down and could have finished it off, but Simonetti is relieved to see demand recovering strongly. “People are back to the office, meeting and event attendance is up. People want to get back together,” he says. “Last year, a lot of our meeting and event clients were still figuring out, ‘Are we doing hybrid? Are we staying virtual? Is it in person?’ And this year, what we’ve heard pretty consistently, especially in the UK and in London, is ‘we’re back, in person’.” For the first time in London since the pandemic, Simonetti says, event clients are pulling in more delegates than they include in their Convene contracts. That’s a sharp turnaround, he adds. “When a client signed a contract with us, they said: ‘We think 250 people are going to be there’. Pre-pandemic, by the time the event happened, you’d see 300 350, 400 people. Since the pandemic our clients were struggling to get to their contracted attendance. All of a sudden, in the last 60, 90 days, we’re starting to see what I would call post-contract growth.” Under the hood But the companies well-positioned to take advantage of that growth are changing. Simonetti has long been an advocate of consolidation in the events real estate space as well as the flexible office market (Convene offers co-working space in many of its sites). He wants to strike “one or two more” deals like the etc.venues takeover in the next few years and has been meeting with investment bankers keen to pitch prospects. “Let’s just say there’s a lot of books being put together,” he says. “I’ve been saying for the last few years, the industry had to consolidate. We’re starting to see that. And hopefully there’s going to be the opportunities to acquire great brands, great products, great teams and, ideally, some additional geographies as part of that. That, combined with what we think are interesting organic opportunities, means we should be in a position over the next three, four or five years to double the size of our footprint globally.” The company’s global portfolio stands at almost 1.9m sq ft. With the flex market in flux, Simonetti’s team has been exploring partnerships with names such as Industrious in the US and x+why in the UK. “The cream rises to the top,” Simonetti says. “Before 2019, I don’t want to say things were easy, but it was relatively easy to get space, to acquire customers, to raise capital, to grow your business. “Today it’s a little bit different. It’s not as easy to raise capital. Landlords won’t just do deals with any operator. They want to look under the hood, and make sure they are getting in bed with the right partner. If anything, we like moments like this because we’re really confident, not just in what we do and the value that we create, but the actual underlying performance of the business and the metrics.” Not all companies are able to make such a claim. We meet shortly after WeWork sets out a May timeline for exiting Chapter 11 bankruptcy protection, but before a restructuring agreement with creditors is sealed. Simonetti is surprised that WeWork is wrapping up a restructuring as soon as it is. But he has much to say about what the troubled company got right for the industry. “You say ‘co-working’, and they are synonymous with that industry and they deserve credit,” he says. “Through sheer will and brute force, they changed the mindset of an industry. Landlords think differently today because of the things they did. I’d hope that Convene gets some credit [too]. We’ve been talking about running an office building like a hotel since 2009. “I hope they can get credit, and we also get a little credit, as should others, for pushing the industry to think about the human experience in an office building in a fundamentally different way.” He adds: “Nobody has ever in history – in my history – designed and built that much space that efficiently at that scale. They built out millions of square feet of interiors globally. If you take a step back, that’s insane. “They had some really talented people, who were doing some incredible things that had never been done before. “I think it’s a shame for those individuals that when people talk about it now they focus only on the negative, when some of the things they pulled off were genius – and impossible, but they somehow made it possible.” Hope and hard decisions Making the impossible possible is an irresistibly optimistic idea that sounds natural coming from an American entrepreneur. As we wrap up, I ask Simonetti for his lessons about managing businesses in tough times, given that his business was born in the GFC and has now survived the pandemic. First, he replies, accept reality. “Sometimes when crisis hits, the shock and awe of it, it’s hard to accept the reality of the situation,” Simonetti says. “If you can’t accept the reality, it’s really hard to move fast enough and make the tough decision you have to make to survive, to navigate. In the pandemic, one of the reasons we made it was we moved quickly, closing locations, scaling down our headcount and having tough conversations with landlords and clients. “It was an experience I would never want to have to go through again. But we accepted reality and we moved quickly, thinking about the worst-case scenario, not the best case scenario.” Second, be “open, honest and transparent” with your team and stakeholders – even if it means telling them things they don’t want to hear. “It’s really easy, I think, in challenging situations, to soften the information in a way where you’re not really managing expectations the right way. “And as a chief executive, when you have a board and you have lenders and you have a leadership team and you have team members and you have clients, it’s really up to you to set the tone. “I’ve found that people are really resilient if they have the information. And if you can prepare them with the information, no matter what happens, they’ll figure it out.” Finally, the chief executive says, don’t lose hope. “You have to maintain a sense of hope, especially when you went through what we went through for such an extended period. “We pretty much shut down our business for two years from the start of the pandemic to when we fully reopened our portfolio. How do you keep people inspired? How do you keep investors committed? How do you convince landlords to work with you? “If there’s no hope and there’s no optimism, why would anyone follow you? You have to paint a picture of a future that’s brighter than the one you’re in.” Get that right, I suggest, and you end up in the Square Mile, opening your company’s biggest location. But Simonetti interjects – saying Convene also got lucky. “Ninety percent of our revenue went to zero and stayed there for two years,” he says. “If you handicap the odds of survival, [in] 100 times that happens, you maybe survive one or two. “So part of this is – as much as I like to give credit and our team carried us through – we got lucky. What do they say? Rather be lucky than good.” Simonetti and the team can probably give themselves credit for being both. Internal images © Jack Hobhouse