Industry Update
Press Release 9 June 2020

HotelAVE Projects New Cleanliness & Social Distancing Protocols Could Cost Hotel Industry $9 Billion Annually

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HotelAVE

Hotel Asset Value Enhancement (hotelAVE), the premier hotel asset management company, today released its latest projections that offer significant insights to the anticipated costs that hotel owners and operators can expect to incur as they prepare to reopen. Post Script, hotelAVE's operational efficiency division, estimates that new cleaning protocols could potentially cost the hotel industry as much as $9 billion on an annual basis, based on factors such as the increased frequency of cleaning guest rooms and public spaces, new supply costs and reopening expenses. The projections were announced today by Michelle Russo, Chief Executive Officer of hotelAVE.

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"Hotel operations are fundamentally changing as result of this pandemic, and the ability to create staffing plans and job classifications that reflect the new reality will serve as a major differentiator as hotels prepare to reopen and welcome back their employees and guests," said Russo. "It is absolutely necessary for hotels to reimagine many fundamental standards and practices if they expect to address guest concerns and eventually recover profitably. Rather than assuming that new cleaning and social distancing protocols require additional staff and operating costs, owners, asset managers and operational efficiency experts should quantify a customized solution for each hotel in order to install the necessary cleaning and sanitation protocols, mitigate additional costs and adapt to changing consumer behaviors."

The following insights offer hotels a guide as they begin to reimagine fundamental standards and practices that aim to create consumer confidence, start the road to profit recovery and meet guest's changing expectations.

  • Potential Impact of Room Attendant Payroll: According to Post Script, a hotel's ability to maintain a neutral room attendant payroll upon reopening will be dependent on its capacity to reduce the frequency of stayover service - a service that consumers don't highly value at this time. Based on a thorough and in-depth analysis of prior efficiency projects, Post Script estimates the average hotel housekeeper will incur an additional 5-7 minutes of cleaning time per check-out room in order to address new and necessary cleaning standards. For hotel with an average length of stay (LOS) of over 1.9 who can reduce the frequency of stayover service to at least every third night, Post Script estimates a neutral impact to room attendant labor expense. Hotels who either have a LOS of less than 1.9 nights or deliver the same frequency of stayover service as before the pandemic will see an incremental increase in total payroll.

    While high-touch and non-porous surfaces such as door handles, light switches, lamps, clock radios, remote controls and phones will require additional attention, the process to remove and launder terry and bedding will also be different, as will the application of electrostatic equipment to spray soft goods and other hard-to-clean surfaces.

  • Increased Cleaning in Public Areas: Public spaces will also require as much as 50% more labor in order to effectively disinfect high-touch areas at an increased frequency. Hoteliers looking to minimize impact should evaluate how to reduce the footprint of the public areas and transform complimentary breakfast buffets.
  • Incremental Operating Supply Costs: Hotels can expect to see a 30% increase in related cleaning supplies, which will be driven by greater cleaning frequency and potentially more expensive disinfectant products. Post Script estimates the addition of in-room personal sanitizers, single-use collateral and costly PPE changes required for each room cleaning could cost the average hotel an additional $3.00 per occupied room (POR). In order to combat these increases, Post Script recommends reducing the amount of in-room terry, exchanging vs adding bath amenities and decluttering rooms of collateral, compendiums and other infrequently used items to reduce cleaning and restocking requirements.
  • One-Time Reopening Expenses: In addition to ongoing PPE purchases, hotels must account for the cost of implementing and communicating the new safety initiatives and measures to guests throughout the property. The average 150-room hotel should plan to budget approximately $30,000 for related supplies, such as hand sanitizer stations in public spaces, plexiglass barriers and new signage and floor markers to ensure proper guest distancing. While employee training, personal thermometers and hand-held electrostatic sprayers will be as necessary as vacuums, it will come at four times the cost.
  • Creative Restructuring and Reinvention: Hotels must adapt to changing consumer behavior which will mandate less frequent face to face guest interaction and more technology. That affects everything from the arrival experience and role of the bell staff to mobile check-in. Hotels must approach the new cleanliness/sanitation requirements as one component of the "new normal" that should be implemented simultaneous with other operational modifications to ensure a guest driven solution that also manages to the bottom line.

Note: All math is based on the average hotel in the US (150 rooms with a room size of 350 SF, a 60/40 king to DD bed mix, 66% occupancy and 1.8 day LOS).

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About hotelAVE

hotelAVE is the industry's leading hotel asset management firm with over $5.5B under management. Founded by Michelle Russo, we bring over 450 combined years of hotel consulting and hospitality industry experience and innovation, to provide proactive hotel asset management services for over 7,500 properties. Our operational efficiency division, Post Script, leverages extensive data, its proprietary database of thousands of "time to complete" datapoints of various tasks and its hotel operations experts to implement best of class operating structures with operators. For more information on hotelAVE, please visit www.hotelave.com.

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