Industry Update
Press Release17 June 2020

Creativity and flexibility become key for the hotel sector's new normal

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London -- An international hotel webinar held last week [10th June] to discuss the hotel industry's journey out of lockdown, warned of the long road ahead for hotel operators to reach full recovery, and the likelihood that the hotel sector and the way it operates will be forever changed as a result of the Covid-19 pandemic.

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The webinar, organised by global hotel consultancy HVS, legal firm Bird & Bird and EP Hospitality, attracted nearly 700 industry executives from across the world, with 18 senior industry experts presenting as speakers, panellists and moderators.

A session addressing post-lockdown re-opening strategy, chaired by HVS chairman Russell Kett, included panellists Marie-Paule Nowlis of Sofitel London St James; Frank Croston of Hamilton Hotel Partners; Coley Brenan of KSL Capital Partners; and Karen Friebe of Bird & Bird.

The session kicked off with debate surrounding the difficulty of timing your re-opening and at what point it remains uneconomical to open. "There is no point opening and making more of a loss than you do when you are shut," said Kett. "Closing was relatively straightforward, but reopening is going to be quite challenging particularly as people are thinking there might be a second wave of the pandemic."

Hotels need to know at what occupancy level they break into profit, the panel agreed. When to bring staff back out of the furlough scheme was an on-going issue, as well as the inevitable decision that some people are not going to be required.

"Inevitably there may be staff cuts, but you have to balance this with the level of service you offer," said Karen Friebe, a partner with legal firm Bird & Bird. She added that the implementation of social distancing in a hotel was likely to prove challenging along with ensuring that any new protocols are implemented effectively.

"I think there's going to be a greater use of technology, which we are already seeing in countries that have re-opened for business, such as China," she said, adding that hotels were likely to be run with a lot less social interaction with their customers, which opened up a whole new dilemma for the hospitality sector and the concept of service in a service-led industry.

Creativity, flexibility and a passion for perfection were three key team attributes identified in the new era of hotels - while the costs of implementing new health and safety protocols were likely to be off-set against savings made on reduced servicing of rooms and the stripping out of moveable collateral materials.

The panellists agreed that the 14-day quarantine for visitors to the UK and elsewhere was unworkable, with some only planning to open their properties once this decision had been reversed. Extended stay-type properties, which afforded guests a degree of autonomy were seen as having an advantage moving forward, as was the importance of sustainability, the need for leaner structures within management teams and operating companies, and the on-going popularity of virtual meetings, which was seen as likely to remain albeit perhaps only for smaller groups and one-to-one meetings in the longer term.

"We are moving into a new era of service, and a new era in how we define service in hotels," concluded Kett. "Customers will be different and have different needs and management teams have to work together to address these in an attractive and appealing, but profitable way."

* Another webinar 'The Cost of Recovery in the Hotel Sector - Who's Paying' will be held on 8th July. You will be emailed an invitation to attend.
For further information please contact:

About HVS

HVS, the world's leading consulting and services organisation focused on the hotel, mixed-use, shared ownership, gaming, and leisure industries, was established in 1980. The company performs 4,500+ assignments each year for hotel and real estate owners, operators, investors, banks and developers worldwide. HVS principals are regarded as the leading experts in their respective regions of the globe. Through a network of some 60 offices and more than 350 professionals, HVS provides an unparalleled range of complementary services for the hospitality industry. HVS.com

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Russell Kett
Chairman
Phone: +44 20 7878 7701
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