HOTELS ’ InvESTmEnT OuTLOOk
There is no business as usual for The hoTel indusTry near Term . hoTeliers musT masTer a nEw OrdEr of sweeping operaTional changes , as well as financial remedies and m & a consideraTions .
Contributed by Mary Scoviak
For the hospitality industry , COVID-19 has been pretty much an equal opportunity destroyer . “ Everybody is losing : brands , customers , Airbnb , OTAs , travel planners , meeting planners , suppliers and florists ,” says Jon Bortz , chairman , president and CEO of Pebblebrook Hotel Trust and current American Hotel & Lodging Association chairman .
No one could have dreamt of a virus so deadly that as of May 14 it had killed more than 300,000 people , infect at least 4.5 million more and shut down the world in a matter of weeks . “ None of us was adequately prepared to reduce our operations to appropriate levels within the short period of time necessitated by COVID-19 ,” says Chad Crandell , CEO and managing director of asset management firm CHMWarnick , Beverly , Massachusetts . Ali Kasikci , founder and CEO , Bentley Management , Beverly Hills , California , says much of the ownership side was caught out as well . “ The hospitality industry was too good for too long . Everyone had been spending like crazy . No one had a war chest ,” he says . “ When the tide goes down , we ’ ll see who was swimming naked .”
Q1 and Q2 of 2020 threatened the hotel industry ’ s stoic “ don ’ t panic ” stance . But even if this goes on record as the worst crisis hospitality has seen , it won ’ t be the last , says Kasikci . Among the lessons learned : Learn how to manage bottom-line expenses better . Look for new management systems and processes that reduce backof-house costs , not front-of-house , services . Invest in technology . Make sure you have enough funding to meet cap ex so that you don ’ t lose marketshare on the other side of the crisis . And think further ahead : The impact on group travel in any downturn , let alone a pandemic , makes it a difficult sector to bank on .
On the pages ahead , the focus is on the way forward for financing , M & A and the potential for consolidation .
Path to reco
16 hotelsmag . com June 2020