Coronavirus and the Hotel Industry: 'Do the Best You Can' in These Testing Times
"This is our first crisis in 10 years of operations," says Christoph Wondraczek, co-founder of the Hamlet luxury apartments in Geneva's old town. "We're now taking everything day by day and adapt our strategy daily."
At first, he says, everyone was in shock. "Business and leisure travel ground to a halt, and the transient guests all cancelled or postponed their stays. That paralysis has now worn off a little, and people are starting to make decisions again, though often based on a new set of needs."
For example, there is even a new wave of guests contacting the Hamlet. It is now receiving guests stranded after their hotels had to close, as well as elderly people who need to separate themselves from other members of their family. In all instances, they are "very happy because they now have a second family to look after them and it's a beautiful place to live until the crisis is over," Wondraczek says.
The team is in constant communication with guests via WhatsApp and is providing additional services such as grocery shopping or helping them setting up a home office. Guests are also making use of the library, a communal space disinfected after each use, while their apartment is being cleaned.
So financially the Hamlet is starting to turn a corner. "We are of course still way below target but we are using this as an opportunity to rethink our business and hopefully emerge even stronger after the crisis."
Wondraczek was recounting his experiences in dealing with the Coronavirus outbreak during a recent online forum staged by hospitality consultancy HoCoSo, which brought together a number of industry experts, mainly from the extended-stay sector.
John Wagner, co-founder of Cycas Hospitality, said occupancy rates at his hotels were "way down," averaging at 30 percent across the group. "In a couple of cases we're still running at 40 percent which is extraordinary, way more than I'd have thought we'd have. I don't know how long it will last but at the moment our occupancy seems to be falling more slowly than those of mainstream hotels."
Asked about best practices in these testing times, Wagner had this to say: "Everyone's flying by the seat of their pants so to take anything we're doing and call it extraordinary or anything more than common sense is self-aggrandizing."
"Like everybody else, we're making decisions on the fly as best we can, adjusting and adapting to tomorrow's situation," Wagner said, adding: "The sun will come up tomorrow and we'll deal with tomorrow's situation when we get there. Do the best you can."
Wagner also shared with the group how housekeeping and guest contact had changed during the crisis. For example, clean linen is placed outside the guest room for the guest to change and the dirty linen is put outside for cleaning staff to pick up along with the trash. "So we've limited, in a number of our hotels, our entry into the room and hence proximity to the guests." For the staff, it means they can also socially distance themselves from the guests. "It's a dramatic change of service, but it seems the appropriate thing to do to stay open."
HoCoSo chairman Jonathan Humphries told the session that, when mapping out business strategy, flexibility and adaptability are now absolutely key. He noted that one client is currently renegotiating leases and contracts, seeing this crisis as an opportunity to restructure the organisation. "They're renegotiating all contracts and want total flexibility with regard to contracts and roles within the operations structure. They're removing GM (general manager) positions at the property level, with operations managers feeding up and that's probably more of a cost-cutting exercise to a certain extent."
"The plan is that the organisation will look completely different at the corporate level and operationally within 3-5 months from now. They're okay financially so they say they can weather this out and are going to retain pretty much everybody over the next few months."
Hygiene factors will, once again, be "absolutely critical at least for the short term," Humphries said. Certification would help to bring business travel back to hotels while giving employees greater confidence.
Jonathan Langston, co-founder of HotStats, pointed out that the certification, monitoring and publication of hygiene standards may have to be elevated to a whole new level. "Everybody wants to travel. Everybody wants to meet and fulfil the need to get together. And I think it will return as it's human nature."
Although his HotStats business has been able to continue operating with employees working from home, the tech platforms are "by no means infallible. So, even down to the basic sales meeting of getting people together versus the big company rah-rah, they'll all come back in one way, shape or form. So, I'm pretty optimistic that we'll revert to something which fulfils the travel and hotel industry."
Wagner, however, believes that as many organisations are currently switching to video conferencing to conduct business, this may have an impact on business travel in future. "It's bound to have an impact on our livelihood. I do worry about that."
He reiterated that hotels, meanwhile, are just getting by. "The hotels, as best they can, keep operating. It's the people actually in the properties that have the challenging time because of all the health and safety issues, and employees not showing up to support them."
Katharine Le Quesne, managing director of HoCoSo, emphasized that, from a human resources perspective in terms of dealing with the crisis personally and professionally, "there'll be a lot of growth - painful growth but growth all the same."
Seán Worker, the former CEO of extended-stay apartments BridgeStreet who is now managing director of business advisory T5 Strategies, said that among the trends he's seen in the sector has been "a crumbling within the extended-stay community" as there has been something of lag because extended-stay guests had not packed up and gone like transient guests who had sometimes just left their belongings behind in apartments.
Some upper-end hotels in the US have moved up renovation work, he said, so they can keep staff employed. "Equally, they're having displaced families coming in because of the neighbourhoods they live in or issues where there are multiple family members in a house and it's practically impossible to maintain distance between each other."
Worker sees the crisis as an opportunity not just to ‘reboot' or update properties, but rather to reinvent businesses. "This is a dramatic, fundamental shift in how we wake up when everybody gets back to work, with the office space massively impacted. There'll be new businesses that come out of this and unemployment is going to have a lag. (In recent weeks some 10 million people have become jobless in the US alone). Amazon's hiring 100,000 people. Lidl is partnering with McDonald's in Germany. When McDonald's food service is working with a supermarket, that's reinvention."
"There are 700,000 jobs open right now that have opened up in recent weeks in the United States. But people are numb in reacting to that. The same thing in Europe. This is going to be a substantial reinvention versus a reboot."
A message from the HoCoSo leadership team:
Like many of you, we have worked through numerous seismic events during our careers and we are total believers in the power of collective thinking in navigating uncertainty. At the start of this year, HoCoSo labelled 2020 as our Year of Community. We didn't realise then how important this ethos would be. As we watched from Europe as much of China's hotel market was shut down in a matter of weeks, we reflected on the Chinese character for crisis 危机, the literal translation of which is danger + opportunity. So we launched HoCoSo CONNECT, to focus on opportunity; to work on solutions; and to support each other. Our Weekly Forum series brings together a focused group of industry leaders to debate what is happening and to find solutions. We are motivated by a sense of community, responsibility and urgency.
Our huge appreciation to our roundtable of experts: Alphy Johnson, President, International Hospitality Advisor; Chris Mumford, founder of Cervus Leadership Consulting; John Wagner, Co-Founder, Cycas Hospitality; Jonathan Langston, Chairman, HotStats; Sean Worker, Managing Director and Principal, T5 Strategies and Christoph Wondraczek, Co-founder and CEO of The Hamlet.
To the hospitality industry, we offer freely our time to be a sounding-board to support your internal discussions, planning and communications; and to work on practical solutions together. If you are interested, we'd be very happy to get around a virtual table so please do get in touch. Jonathan Humphries, Katharine Le Quesne, Irene Zijlmans.
About the Author - Stuart Pallister
After working as a television journalist in Asia and Europe for nearly 20 years for mainly CNBC and Asia Business News, BBC Radio and TV, European Business News, and McKinsey, Stuart switched to digital content development at INSEAD business school and the National University of Singapore. He then headed the Academic Editorial Content at Ecole hôtelière de Lausanne and launched its knowledge platform Hospitality Insights by EHL.