In Step: Owners and Operators moving forward, together (or not)
— 11 experts shared their view
The Current COVID-19 crisis has put incredible strains on hotel owners, operators and managers. Steps to alleviate the current pain points are well noted - fee reductions/deferrals, closing of properties, reduced staffing and services - but these are likely not sustainable over a long period. Still, solutions to the problem created by drastically reduced occupancy and rates are required.
Hence, the question is what do you believe are the most important steps/accommodations (a) owners and (b) operators can/should take to establish an even stronger relationship that will better enable their hotels to (1) recover from the current crisis in a timely manner and (2) better withstand future crises.
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.