Industry Update
Opinion Article16 July 2020

Planning the Aftermath of Post-COVID Hotel Luxury

By Larry Mogelonsky, Managing Director Hotel Mogel Consulting Limited

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The challenges facing hotels in the post-COVID environment are massive. Old planning guidelines are irrelevant. For hotels in the luxury segment, where close contact with guests was almost literally mandated, it will be particularly pressing to find new ways to meet these time-honored standards.

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To help navigate the immediate challenges of reopening a luxury property amidst so much fear, uncertainty and new policy requirements, I've recruited four veteran GMs to demonstrate how leaders from across North American are tackling the problem:

  • Franck X. Arnold, General Manager of the Ritz-Carlton, Toronto (263 rooms)
  • Janis Clapoff, Managing Director of the Lake Austin Spa Resort in Texas (40 rooms)
  • Alexander Fischer-Jean, General Manager of the Harbour House Hotel on Salt Spring Island in British Columbia (50 rooms)
  • Stephen G. Johnston, Managing Director of the Boston Harbor Hotel (232 rooms)

What is the greatest change that you anticipate for your business?
Arnold:
The greatest change we anticipate is the physical distancing measures that will need to be implemented. We will continue to provide the legendary Ritz-Carlton service while ensuring the safety and security of our guests during their stay with us. Uncompromising levels of cleanliness has always been a priority at The Ritz-Carlton, Toronto. Moving forward, we will be redefining our cleanliness standards based on the recommendations of Marriott International and the Canadian public health officials. On a more human level, we will need to find the right words and behaviors to deliver on the Ritz-Carlton experience wearing masks and gloves.

Fischer-Jean: We will see the greatest impact in our weddings and conferences business, and particularly in group travel. While I still see demand from leisure travelers to visit our little island, it is the local community that is the most apprehensive to allowing tourists to return to the island.

Johnston: I think that the area of messaging and communication is going to be incredibly important. This applies within the hotel, where we must reassure all our associates that we have developed an environment that is safe for them and their families after work. We will need to be conscious of their concerns, and ever vigilant to make sure that we address them quickly and effectively and keep everyone feeling safe. Similar messaging will be important for our guests, and for the wider community in which we operate. For over 32 years, our hotel has been known for excellence, and for making good decisions for our guests. Our outward communications need to double-down on that trust, leaving no doubt in our guests' minds that we have done everything reasonable that we can to ensure a safe and enjoyable visit to our hotel.

Clapoff: Instilling a 'no-faltering from cleanliness and sanitation standards' training for all staff at all times. This is a new way of life, not a fad. This will not ever go away, whereas protective clothing (such as masks, gloves) will.

Do you plan to add any levy to reflect extra costs for PPE and additional cleaning?
Johnston:
We have no such plans at this point. I think that introducing a charge in this manner would not endear us to our guests. My wife's dentist has introduced a $10 levy for additional sanitation processes, and I think that the communication is shortsighted. If your cost base increases, then increase the price of your procedure by $10 but don't add another levy.

Clapoff: There is a definite surge in operating costs concerning PPE necessities. The cost may be reflected in our room rates.

Fischer-Jean: No, a resort fee or levy is not being considered for our room rates at this time.

Arnold: As safety and cleaning protocols are a part of The Ritz-Carlton, Toronto commitments to our guests, there will be no additional costs passed on to our guests with regards to PPE and additional cleaning costs.

How are you managing expenses during this restart?
Clapoff:
During closure, only 10 staff members (out of 250) were working. Executives that were asked to stay on during closure were also asked to take a cut in pay. All property expenses from utilities to contractual agreements were put on temporary hold. Housekeeping, maintenance and grounds were represented to keep the physical property upkeep during closure.

Arnold: Unfortunately, we had to temporarily lay off most of our Ladies and Gentlemen except for the essential coverage of engineering and security. The executive committee remains employed on a reduced schedule. The various government programs in place, especially the Canadian Emergency Wage Subsidy program that was supported by the hotel ownership, is assisting us to alleviate some of the important anticipated payroll expenses as we bring back our Ladies and Gentlemen to plan, organize and relaunch The Ritz-Carlton, Toronto.

Fischer-Jean: We've temporarily closed the hotel, eliminating our greatest expense (labour). We've closed hotel wings, cut power, turned off the gas (used in kitchen) and lastly taken advantage of all government subsidies.

Johnston: As you would expect, we are buying virtually nothing during our time of closure, and we have been in contact with all our vendors to negotiate suspensions to contracted monthly services. We have found all our partners to be understanding and helpful.

What major changes have you considered for the post-COVID business model?
Johnston:
We are considering a wide variety of subtle changes to our operation. There will be a handful of services that are curtailed or suspended until the situation changes, but I would not say that the changes will be major.

Arnold: Uncompromising levels of cleanliness has always been of utmost importance to The Ritz-Carlton, Toronto. We will be training our Ladies and Gentlemen to take measures to go above and beyond our cleanliness standards in rooms and to increase the frequency of cleaning public spaces. We may not have initially the ability to reopen all F&B outlets, spa and wellness facilities to the same extent due to the current restrictions, but as our business ramps back up we will provide the necessary luxury amenities one by one. We are also launching a wonderful new 'Dine at Home' program and soon custom delivery service in order to keep engaging with our guests and bring the Ritz-Carlton experience to them until we are able to resume normal operations. We will also be careful to maintain staffing levels commensurate with a luxury service, but we will be modeling them on a luxury hotel of smaller scale, more similar to a boutique hotel, in order to maintain a healthy average rate.

Clapoff: Utmost will be more visibility in sanitization from all staff members as well as more protection for staff and guests from a health environment standpoint. Never before has there been a need for training departments to reemerge for safety, sanitation, health and well-being.

Fischer-Jean: As a relatively new GM to my property, I had already planned to make a number of changes and improvements in operations and efficiency. However, to answer your question, no major changes are being made to the business model (yet!). Property cleanliness standards have been rewritten with an emphasis on the prevention of germ-spreading, cross-contamination and contagious diseases.

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