The R-Factor: Why Resilient Leadership is a Not-So-Secret Ingredient in Hotel Recovery
By Deborah Popely Assistant Professor, School of Hospitality Management, Kendall College | May 16, 2021
This article was co-authored by Michael Krause, Assistant Professor, Kendall College of Hospitality Management at National Louis University.
The impact of the COVID-19 pandemic on the hotel industry has been well documented in industry reports and popular media. With declining travel and local lockdown orders, STR year-end data indicates the U.S. hotel industry logged unprecedented lows in occupancy, ADR, and RevPAR in 2020. The industry surpassed 1 billion unsold room nights eclipsing the 786 million unsold room night during the 2009 recession. Room revenue losses neared $3 trillion with nearly 100,000 rooms lost due to suspension of operations and closures (Mandigo, 2021).
Amid the turmoil and uncertainty, some hotels have fared better than others based on a variety of factors such as size, service level, local market dynamics, and clientele. One factor that hasn't been fully explored in the hotel industry is the "R-Factor": that is, the resilience of the leader and the resilient environment he or she creates within the operation. We wondered how important the "R-Factor" could be in hotel survival and recovery and what it might mean for the future of the industry.
Partnering with the Illinois Hotel & Lodging Association, we engaged with a panel of 16 Chicago hotels between October 2020 and January 2021 during the city's second lockdown in response to a resurgence of COVID-19 cases. Through in-depth surveys and interviews, we discovered that the majority of the hotels exhibited characteristics of resilient leadership in their management practices and processes before the crisis, and that their overall resilience increased as a result of the pandemic. Some of the topline findings are summarized below, follow by a brief discussion of some future trends and challenges facing hotels as operations begin to restore later in 2021. The full report can be accessed at https://digitalcommons.nl.edu/kc/1/.
Before the pandemic, the hotels were mindful of how a crisis could affect them. Most of the hotels had fairly robust crisis management plans and associated training, but a health event such as the pandemic was not very high on their radar. One GM noted that "Few thought to pay much attention to [the biohazard] section of the manual. However, when two employees died from the virus…and when the issue of mask wearing came to the fore, we along with the rest of the company embraced and adopted these emergency standards." As a result of the pandemic, crisis planning became more proactive with longer planning horizons. Preparedness for biohazards is now at a much higher level and has become embedded in the training program for the future.
Agility and decisiveness in a crisis are also important indicators of resilience. The majority of participants saw their organization as able to rapidly shift to respond to crises before the pandemic, and the most felt that their capacity to do so increased after, as well. Participants were forced to take drastic and often painful measures to maintain operations during the pandemic, such as layoff and closures. In interviews, participants noted that managers became nimbler and were more flexible, making tougher decisions more quickly.