World Panel
Viewpoint 3 August 2020

In Step: Owners and Operators moving forward, together (or not)

Hotel Ownership, Development and Management

— 11 experts shared their view

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This viewpoint was created by
Demian Hodari, Associate Professor of Strategic Management at the Ecole Hôtelière Lausanne (EHL)
Dominic Seyrling
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.

This means that, for what is hopefully a short period of time, the interests are aligned and for the most part all stakeholders are working in tandem to dig themselves out of this hole. I don't want to say the short term is not a concern. With our hotels running daily losses it clearly is. However, my eyes are firmly set on the future and I truly hope that the current crisis will have a fundamental positive impact on our industry.

Brand managers have only now admitted that their own support infrastructures are too heavy because they have historically not paid for them. Dried up revenue-driven cost reimbursement fees are harshly exposing the problem leading to huge lay-off rounds. Sadly, these lay-offs are necessary to keep many companies afloat. In my view this is the one-time opportunity to adjust our respective business models to create an environment of less friction, ultimately for the benefit of the customer. My hope is that COVID 19 sharpens everyone's senses and the focus going forward will be for the brands to focus on developing the best brands, the operators to adjust business models to keep them efficient in a sustainable way and owners to make sure they are on financially sound standing (without leveraging up when leverage will be available again) to withstand then next crises. 

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