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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