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.

Anne-Marie Auriault
Anne-Marie Auriault
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.

As partners, they have been reaching accommodations on the use of FF&E reserve for rolling costs of business, staffing level, extension of temporary fees relief, manage and control operational costs. There are also several relaxations on brand standards and extension of Product Improvement Plans (PIP) deadlines.

Additionally, some owners are also using their termination rights to renegotiate their agreements with their operators.

It is crucial to remain flexible and agile, and there will be tensions in the next coming months to keep a low-cost structure in order to recover from the current crisis.

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