Industry Update
Opinion Article25 August 2020

What Hotels Will Look Like in a Post-COVID World

By David Eisen, Director of Hotel Intelligence and Customer Solutions for HotStats

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For hoteliers and hotel investors, COVID-19 has rushed through the industry like a flood. Without a doubt, it will leave hotels forever transformed in its wake. As the virus subsides, it will reveal a transformed landscape, and hotels will need to adjust to move operations to higher ground.

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Want a peek into what this post-COVID-19 world will look like for hotels?

In this article, we gaze into the future, examine which marks will stay with the hotel industry and lay out what hotels will look like in a post-COVID-19 world.

The New Shape of Hotels Post-COVID-19

It may be impossible to predict the future, but there are solid indicators that paint a picture of how hotels will look in a post-COVID-19 world. Here are some changes to expect:

1. More Touchless Technology

After COVID-19, some things will go back to normal, but the scars of a pandemic will long be carved into the public's mind. As people fear the next big virus outbreak, expect touchless technology to pop up more often.

Hoteliers can ease the worries of visitors by adding touch-free devices, such as doors, dispensers and sanitation stations. Another way to minimize person-to-person contact will be to introduce mobile apps. That could include more check-in and room-service apps that let guests complete tasks without the help of an in-person employee.

2. A New Definition of Clean

Sanitation has always been a priority in the hotel industry. But it's safe to assume post-COVID-19 that hotel cleanliness will be more thorough, more out in the open and more obvious. For instance, some hotels are adding fresh seals to doors, sanitation stations and even room-cleaning robots. In all cases, new guidelines and the public's fears both create incentives for hotels to step up their cleaning rituals and push them to the forefront.

3. Altered F&B Operations

As a general rule, hotel restaurants and bars will always depend on specific demand from their guests. However, there are some changes that are positioned to hit food and beverage (F&B) services across the board.

First, with the fear of germs hovering in guests' minds, most hoteliers will shy away from buffet offerings. At the very least, they'll work to reduce shared utensils or take precautions to spread out seating and food stations.

Second, hoteliers can expect higher demand from guests who want to grab food and drinks on the run. This could mean that a hotel's F&B services emphasize more takeout, extended to-go options and more complete room service.

4. Adjustments to In-Room Offerings

In the future, there's a good chance hotel rooms will look strikingly different from those of the past. Hoteliers who want to provide more peace of mind to travelers will reduce the number of shared devices in rooms. The hotel room of the future may also include more voice-command devices to control lights, TVs and air conditioning without forcing guests to touch a switch.

5. A Face-Lift for Nonroom Amenities

Overall, nonroom features, such as golf courses, pools and conference centers will likely look different in a post-COVID-19 world. Social distancing and a quest to eliminate germ hotbeds will drive physical changes in these areas. For instance, hotels may start spreading out pool lounge chairs and designate additional waitstaff to sanitize surfaces when guests get up and move on.

How to Shape Hotels in the Future

Even though these trends are forming a new normal in the industry, hotels will be changing on a case-by-case basis. That's why metrics will drive successful transitions. Here are some figures to consider before making decisions or investments:

Current Operating Costs

The better hoteliers understand costs, the easier it is to make profitable decisions. That's why all moves toward shaping a profitable hotel in the future require shining light on operating costs now.

How?

Start by examining broad hotel costs. Here are some places to start:

  • Labor costs
  • Utilities
  • Property expenses
  • Maintenance costs

From there, hoteliers can dive into departmental expenses. Here are some departments for which it's worth examining costs:

  • F&B
  • Golf
  • Spa
  • Parking
  • Conferences

By prying up departmental costs, hoteliers can grab a glimpse of everything that's going into each of the operation's wings. That initial move will clarify the value of these minioperations.

Departmental Demand

As hoteliers add new features, cut programs and make adjustments, the most successful moves will be driven by demand. That's why hoteliers should consult the numbers before deciding to invest in or slim down departments.

A solid way to gauge demand is to see how much revenue each department is contributing to total revenue. For instance, hoteliers can look into F&B services by measuring F&B revenue as a percentage of total revenue.

By uncovering departmental demand, hoteliers and decision makers can see which moves make sense and which aren't worth the extra investment.

Underlying Profit

Now, as well as long into the future, it doesn't matter whether revenue is gushing into operations or at a standstill. That money needs to hit the hotel's bottom line to make a difference. That's why profit should be the lighthouse guiding every hotel's performance strategy.

Not sure where to start?

Gross operating profit per available room (GOPPAR) is a deep metric that provides a solid indication of a hotel's financial performance. GOPPAR measures the hotel's profit on a room-by-room basis. That means hotels can use the metric to see if changes are having a positive impact on the hotel's final financial health.

Clarify Any Hotel's Future

Although there are common adjustments hotels will need to make in a post-COVID-19 world, there won't be a one-size-fits-all approach that suits every operation. That's why the most successful moves will be guided by hotel benchmarking and deep market analysis. With complete, custom information fueling decisions, hoteliers and investors can create a post-COVID landscape that's built on profit.

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