Ten Tips for Hotel Owners and Operators to Survive the Recession

By Jose Acosta COO, priZem Hospitality Solutions | February 12, 2010

Over the past year, hotel professionals have been inundated with various publications and Internet news articles about current market conditions and the effects of declining ADR, occupancy, RevPar, as well as an alarming rise in hotel foreclosures. Although nobody can predict exactly when the economy is going to rebound nor when hotel prices and occupancies will return to previously desired levels, it is probable that there will continue to be a decline in corporate executive retreats to luxury resorts, annual board meetings, corporate sales incentive trips, and annual holiday parties over the coming year.

Moreover, historically although all business cycles include the same pattern of recession followed by recovery; it will be difficult to predict the timing and strength of the recovery for the overall market. In fact, one can only wonder about the extent of recovery for specific markets such as luxury, as well as whether there will be a recovery at all for the condo-hotel market.

Having said that, it is important to pay attention to the items that will help maintain profitability by focusing on what I think are the top ten key recession survival best practices. These best practices do not necessarily appear in order of priority, and some of these practices will be more or less valuable to your hotel depending on its unique circumstances.

As you read these practices, please try to select the order that could affect your business and try to focus in the highest impact items.

1. Resist Reducing ADR

Currently we are seeing reductions in ADR in order to stay competitive in the market, but this is simply not the right approach. Instead, hotel companies should go back to basic management 101 as in the old days when hotel executives and managers watched the day-to-day rates, revenues and expenses, which resulted in accountability and ownership of each business unit within the hotel.

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Coming up in November 2018...

Architecture & Design: Expecting the Unexpected

There are more than 700,000 hotels and resorts worldwide and the hotel industry is continually looking for new ways to differentiate its properties. In some cases, hotels themselves have become travel destinations and guests have come to expect the unexpected - to experience the touches that make the property unlike any other place in the world. To achieve this, architects and designers are adopting a variety of strategies to meet the needs of every type of guest and to provide incomparable customer experiences. One such strategy is site-integration - the effort to skillfully marry a hotel to its immediate surroundings. The goal is to honor the cultural location of the property, and to integrate that into the hotel's design - both inside and out. Constructing low-impact structures that blend in with the environment and incorporating local natural elements into the design are essential to this endeavor. Similarly, there is an ongoing effort to blur the lines between interior and exterior spaces - to pull the outside in - to enable guests to connect with nature and enjoy beautiful, harmonious surroundings at all times. Another design trend is personalization - taking the opportunity to make every space within the hotel original and unique. The days of matching decor and furniture in every room are gone; instead, designers are utilizing unexpected textures, mix-and-match furniture, diverse wall treatments and tiles - all to create a more personalized and fresh experience for the guest. Finally, lobbies are continuing to evolve. They are being transformed from cold, impersonal, business-like spaces into warm, inviting, living room-like spaces, meant to provide comfort and to encourage social interaction. These are a few of the current trends in the fields of hotel architecture and design that will be examined in the November issue of the Hotel Business Review.