Hope during a time of fear, anxiety, and uncertainty was the focal point of “Hotelier Insights: Recovery and Looking Past the Pandemic,” a panel that took place yesterday afternoon at the 2020 AAHOA Virtual Convention & Trade Show. Among a variety of topics, the panelists discussed the current hotel landscape, development and transactions, and their projections for the rest of the year.
Throughout June and July, hotel business has been directed domestically to drive-to locations. Kenneth Fearn, founder and managing partner for Integrated Capital, said, “The American spirit is one where people want to get out. They want to get back to senses of normalcy.” He added, “The best hope I have is that we can find a vaccine and an ability to treat this virus and manage it, number one. And number two is the hotel industry stays united in its messaging.”
Amid hotel closures and unexpected economic deficits, the hotel business is still seeing development and transactions during the pandemic. DJ Rama, president and CEO of Auro Hotels, advised those with a project in the ground to “talk to your bank.” “Be transparent about what the burn rate is, and how you can open something in the first quarter or second quarter of next year where there will be more tailwind with the virus suppression.”
Justin Knight, president and CEO of Apple Hospitality REIT, said that it’s important that people “broadly [understand] the challenges and the environment that we’re operating in.” He continued, “The challenges that we’re facing should create opportunities for us to look at things differently and explore opportunities that we may not have seen before. And we’re finding that the groups that we work with understand the environment that we’re in and are accommodating and willing to work with us.”
With the hospitality landscape changing, attracting customers can be a challenge. Sima Patel, CEO of Ridgemont Hospitality, said her properties in California hosted many business travelers before the pandemic. But, because many offices are no longer open, Ridgemont Hospitality has changed its marketing strategy to encourage guests to visit local attractions. “We pivoted our marketing strategy to go local,” she said. “We were able to bring that into our marketing strategy, and we’re seeing some good results out of that.”
For companies working with brands on implementing new cleanliness and safety standards, Fearn suggested a “direct and open dialogue” about expenses addressing those needs. If guests are comforted by what they are seeing, the expense may be worth it. Going forward, Fearn said, “the test will be if we start to see rising occupancies, where the pivot goes from there. And we’re not at that point yet. That’s where I think the interesting discussions will start to develop.”
Knight added that Apple Hospitality REIT has been spending time searching for the “hospitality model of the future” as customer preferences shift. That search includes looking “for better ways to maintain the value proposition for our guests, recognizing we’re going to be entering into a more competitive environment, while at the same time reducing expenses. Our focus has really been around those services and amenities which are utilized least frequently.”
As hotels rebound from the COVID-19 pandemic, Patel said there is still uncertainty regarding Q3 and Q4 2020. The panelists explained that they’re already looking at transient business, tracking trends over time, consumer confidence indexes, airport traffic, and daily room night pick-ups, to name a few. And as the industry strives to make it through this pandemic, it’s always good to remember the overall mission of the hospitality experience; as Rama said, “We’re in the business of providing experience through our people, and that’s what hotels are all about.”