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.
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.
In the medium term, operators should focus on maximizing and delivering profits, rather than revenue – will EBITDA per square meter finally become the key metric? Owners will have to become more agile in agreeing to make changes to, and invest in their assets. Listening to the market will be even more important for the business plan. Change in consumer behavior is a constant factor for almost any business, but the expected changes in global travel trends and in consumer needs and wants will have a life-changing impact on both business and leisure tourism.