Operations & Strategy

The big question mark after the coronavirus crisis is, what will be the people's perception? In the short term, the customers and our employees will need to be reassured, with re-inforced hygiene control processes. Also, we expect customers to want more LOCAL: buy products locally made, eat local food, travel domestically...

A lot of different angles could be reviewed with respect to the BC/AC comparison. From an owner's perspective, the current crisis will hopefully benefit us in the long term as we are currently busy 'unfixing' some of the fixed costs of our industry.

The longer this lasts -- the lockdown specifically, and then the threat of contracting Covid-19 -- the greater the likelihood that there will be more significant changes in behaviour. Certainly in the short term, when the recovery does start, large group and convention business will likely be the slowest to recover, as both travellers' willingness to meet in large groups, and corporates' ability financially to support those events will be compromised.

I am a bit surprised to read this. From memory I was not quite so positive in my response. Although it has to be said that my expertise lies predominantly in Europe. I would have expected there to be a strong correlation between RevPAR trends and investment trends.

There are a significant number of headwinds facing the global economy -- the latest being the Coronavirus/possibility of a global pandemic, and reduced travel levels; and "shaming" from air travel and its environmental impact, to name a few -- that I think will all exert downward pressure on RevPar.

Transaction volume lags RevPAR growth for one, so in the early stages of stagnating or declining RevPAR growth, transaction may very well rise and flatten off at a later stage. Second, after 2018 interest rate increases by the Fed, interest rates have been lowered again in 2019 driving liquidity for asset purchases.