Survival Mode Improves Brand-Owner Relations

COVID-19 threw a few punches at the hotel industry, but despite an extremely challenging year, some would argue that often contentious relationships have been strengthened.

The major hotel brands, suffering their own losses, have remained committed to providing cost-saving relief and revenue-generating support to owners. Their efforts have been welcome, but some would like to see more permanent changes to certain business practices.

“The brands are doing just about everything they can to help, outside of giving us money,” said Jon Bortz, CEO of Bethesda, Maryland-based Pebblebrook Hotel Trust, and current American Hotel & Lodging Association chair.

Measures have included reductions in fees, relaxing brand standards, and PIP deadlines, allowing FF&E reserves to be used for other purposes, and altering rules for staffing levels and furloughs. Brands have also negotiated reductions or deferrals on key vendor contracts for shuttered hotels. Foregoing the daily housekeeping standard and allowing the closure of food and beverage outlets, especially in communities with restrictions and capacity limits, have been among the most welcome concessions.

The crisis also seems to have encouraged a stronger brand-owner dialog. “Brands have taken a very proactive approach to work with owners and managers, not only keeping them apprised of what they’re doing, but also recognizing there are a lot of best practices they can learn by engaging with owners. They’re listening differently now than they were previously,” said Michael Doyle, Managing Director and Executive Vice President with asset manager CHM Warnick in New York.

Driving business

Brands have also been driving revenue by focusing on specific customer segments such as leisure guests and “work from hotel” promotions for those lacking the home office space. Some hotels even took it a step further to offer socially distanced housing to returning college students as an alternative to crowded dorms.

With the increased demand for extensive cleaning practices and transparent safety measures, hotels are increasingly turning to technology to reduce unnecessary contact. Pricing structures tailored towards flexibility in dates and rescheduling is also becoming more of the norm to accommodate travelers who may be hesitant to commit right now.

New F&B solutions

Food and beverage standards, under the microscope, even before the pandemic hit, are likely to attract more scrutiny once the worst is past. “We can expect simpler F&B solutions in full-service hotels moving forward,” Russo predicted. “The reality is that it is a necessity, but not a differentiator outside of the luxury space.” She said the shift to simpler menus or grab-and-go outlets might cause some brand blur, but owners are apt to be less accepting of F&B losses in a challenging era.

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Source: Hotels Magazine

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