Hotels to gear up for business as normal

Following the easing of travel restrictions in China we have recently seen some popular Chinese tourism sites packed, seemingly showing huge pent up demand for travel and to enjoy the great outdoors. 

It is fair to say however that some businesses may not return ‘to normal’, or if they do, it may take some time.  We believe international tourism and some people’s nervousness to travel too far from home in the future may slow the return to normality of the hotel property sector. Hotels that previously weighted business to overseas group leisure packages will need to replace this business in the short term. Hotels who previously benefited from 90% or more business from domestic corporate and local tourism will find themselves facing an increased level of competition, initially driving down pricing. 

Savills is able to provide asset management, valuation, sales, project management and consultancy advice. Some suggestions we have to think about restarting your business include:

1. ‘Clean’ everything
   Clean energy is so pre-COVID-19. ‘Clean’ everything is the future. Guests will want to know, smell and see that every part of the hotel from key cards, elevator buttons, remote controls to light switches are all sterilised and cleaned on a regular basis. This could include hand sanitiser stations at key entry and exit points. There may even be a return to restaurant waiters wearing gloves. Cleaning costs will no doubt increase, but the benefit of attracting business based on a high level of PR on cleanliness should outweigh the time and cost.  It will also provide owners and operators peace of mind
2. Voice activated devices
   If budgets permit, reduce the level of in-room touch points by installing voice activated devices, such as Google Home and Amazon Echo
3. The buffet may need to be closed
   Initially at least, consider heavily reducing the number of seats in the restaurant to create greater spacing between tables. Temporarily replace the buffet service with a la carte or enclosed buffet stations manned by serving staff, Grab n Go options or even a range of international cuisine vendor carts
4. Medical room
   Repurposing existing accessibility or standard rooms into a medically facilitated room for medical staff and guests, and partner with a local medical practitioner to visit the hotel, if and when required. This could contain any new outbreaks and prove what we already know that you need to prioritise everyone’s health and wellbeing
5. FF&E as working capital
   For branded hotels, the FF&E Reserve collected by owners and normally deployed for capital investment could to be returned to the operator either to help pay fixed costs or as working capital to re-establish the business
6. All-inclusive model
   The cruise ship model may struggle to stay afloat, or will at least be in a period of recovery mode for some time.  Part of the attraction of an all-inclusive cruise is the easy ability to travel, see new places, eat, drink and be entertained. Hotels providing travel packages, local excursions, restaurant concessions (make the most of restaurants keenness for business) and partnerships with other hotels across the state or country may reduce the feel of isolation a hotel stay can sometimes bring. Resorts offering all-inclusive eating and drinking could also benefit from the cruise ship fall out
7. Engage staff
   If there is a V-shaped recovery it is important employees are on standby to quickly respond to the return to business. The job keeper allowance has been of assistance and should be used if not already

Should you wish to discuss the above or brainstorm any ideas with our team, please contact us.