Reordered Priorities: AAHOA Chair on Surviving the Liquidity Crisis

Biran Patel

Biran Patel says that his priorities as AAHOA chair have changed as a result of the COVID-19 crisis. “If you asked me about my priorities for our association in January, my response would have been very different,” Patel admits. “But now, we’re facing one of the greatest threats to our livelihood in recent memory.”

For that reason, he says, the priorities that top the list now are aimed at surviving what he calls “the liquidity crisis.” In addition to getting help from the government, this means working with brands and OTAs to increase revenue and reduce costs, despite lower occupancy and essential expenses associated with the pandemic. “We are all in this together. This should be win-win for everyone,” he says.

As Patel points out, amenity creep and other costs imposed by brands had already been cutting into profits, but now owners must also bear costs associated with meeting the more pressing needs that customers themselves now prioritize and pandemic guidelines demand.

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“We have to create an environment where guests feel safe. Even with low occupancy and low cash flow, we need to provide the essentials. Because things have changed, we need to re-evaluate some of the mandates brands imposed on franchisees as competitive advantages.”

Patel says decisions need to be made across the board on a number of issues, including the following:

Breakfast

“Our members differ on whether their mainly limited- and select-service brands should continue to offer breakfast, which can no longer be offered buffet style. Some want to provide a grab-and-go version and others want to eliminate it entirely, but others want to keep it because they are afraid they will lose ground to others in their market.” Patel favors something of a compromise: “Maybe some brands should provide it, but start charging a nominal fee—not to profit, but to offset some of the cost.”

OTA Agreements

Patel also believes OTA percentages are too high, given current circumstances. “OTAs need to step up and provide relief to hotel owners, especially independent properties. Brands also need to reconsider their agreements with OTAs. It is easy to say that we are all in this crisis together. We should act like it.”

Fees

Patel also believes that changes should be made to fees, over which hoteliers have no control. “Times like this call for constructive direct dialogue to create win-win solutions,” Patel maintains. “Every single cost affects the bottom line. Therefore, to reach our goal of being in a better place once this crisis ends, we need to re-evaluate some things. Some fees can be minimized or eliminated without detracting from the guest experience.”


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