In Step: Owners and Operators moving forward, together (or not)
Hotel Ownership, Development and Management
— 11 experts shared their view



Senior VP, Acquisitions & Development at Hyatt Hotels Corporation
There is no magic wand or a specific solution that fits all situations today. Regardless of the type of contractual relationship the parties should be communicating on a regular basis and working together to find the solutions that work for both parties if their relationship is to stand the test of time.

General Manager at The Bürgenstock Selection
The unexpected arrival and consequences of the pandemic for owners, operators and managers (OOMs) has shifted focus from just running a profitable business and generating net returns for owners, operators and managers to now having to secure long term liquidity and to a large extent even solvency for the business. The race for survival has already started and in this race each party can only survive longer if they can meet and strive in the following environment: effective governmental support systems, strong balance sheet of their business and a mind set that previous responses to world crisis are not enough and a complete new approach is required so that all parties come out of the crisis in a stronger position than before they entered the pandemia. The longer the pandemia lasts - and that is a real possibility - the more these support systems will be strained and alone are not enough to ensure survival. see more

Chief Executive Officer at Salt Hotels
Stringent revenue management is the key now to a faster recovery, many markets are not seeing rate resistance and yet rates are dropping as a knee jerk reaction or panic. Be prepared previous booking patterns are no longer relevant and a new pattern will emerge (for many showing very last minute reservations). Flexible cancellation policies are critical to encouraging more reservations in an ever-changing landscape. see more

Senior Director, Head of Planning & Development and Valuation at Horwath HTL
In the short term, financial survival and building consumer confidence are the key issues for both owners and operators. Take a long, hard look at the impact of re-opening or staying open. Is now the time for renovation or change of use? Discounting doesn't work. It didn't work after the GFC and both operators and owners need to be aligned in creating a sustainable revenue strategy. Focus on adding value and providing specific packaging that addresses what guests really want right now. Review cancellation and deposit policies to reduce exposure to volatility in consumer demand brought about by government intervention. Don't reduce the marketing budget; communication with customers, old and new, will be vital as the market comes to terms with a new world order for travel and tourism. see more

Managing Director at PwC’s Global Hospitality & Tourism Center of Excellence
The current situation is likely to speed up several trends we have seen before C-19. Firstly, owners will likely want operators to take on more risk. As a counterbalance owners will need to support operators in adjusting their service offering. This follows the increasing trend of convergence. see more

Founder & Managing Director at Pimlico Asset Management, and Independent Board Member
Owners and Operators are in a long-term relationship, and a good dialogue is key among the parties.
However, owners are likely to be the party who pick up the bills, which is a greater burden for them at the moment. see more

Senior Associate at HVS Hodges Ward Elliott
Beyond ongoing operational measures, which in themselves may result in a permanent reduction in fixed costs, owners and operators are having a close look at how sustainable the allocation of risk and reward is in their relationships. Many owners who have capped their returns in the past through fixed leases, in exchange for limiting their risk in theory, have found that in the world of COVID-19 they ultimately have to share the pain and are not always receiving their expected fixed incomes. see more

CEO - Senior Hotel Asset Manager at Global Asset Solutions
All stakeholders need to review the business model. 1) All invoices and contracts with should be reviewed, renegotiated or cancelled. Since 2008, we accumulated cost, which can be cancelled during this challenging period. 2) In addition, the payroll (largest expense in hotels) needs to be constantly reviewed versus pick-up in room, but also in F&B, and other operating departments. 3) The profitability by outlets should be checked every day. 4) Budget zero should be prepared for 2021. 5) In terms of revenue, the RM will also need to train the team for more upselling/cross-selling to ensure we maximise the opportunities on each guest.

Partner and Managing Director, Kadenwood Partners
Hotel owners and hotel operators need to work even more closely together to survive the unprecedented challenges of the Covid-19 pandemic. Hotel operators must establish procedures that prioritize the health and safety of employees and guests, in a highly visible way, in order to generate consumer confidence. Given that travel is to a great extent limited to local and regional, operators should mine their loyalty programs and stay histories to create targeted offers to those local and regional guests. see more

Director – Investments at Archer Hotel Capital
People are probably tired of hearing that this crisis is different than any other before. However, for anyone in the hotel industry it does one thing – it puts the brand, the manager, and the owner in the same boat, and that's a first. When no revenue can be generated, our fixed cost businesses all run a loss. see more

Managing Director at West Ridge Asset Management
Owners and operators must automate the check in check out and arrival process including keyless entry to rooms. Up-sell and cross-sell digitally. Reduce staff costs and reduce F&B activity be that through breakfast in a bag, reduced breakfast menus, closure of restaurants and reduced hours of service and simplified Menzies. Break even costs must come down! see more