Three Proactive Measures for Hotel Management Companies Navigating COVID-19

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SEATTLE, Wash. — Officials of The Dow Hotel Company (DHC), a national hotel owner/investor and operator, this week provided guidance to hotel management companies as the industry continues to seek ways to combat the effects of the coronavirus pandemic.

“As the entire hospitality industry experiences a major decline in hotel demand, it has never been more important for management companies to be intensely focused on helping its hotel owners and owner/partners to navigate the current environment through various types of cost containment measures,” said Murray L. Dow II, founder and president, DHC. “Management companies need to take a holistic approach by focusing on hotel owners. Maintaining near 100 percent of corporate staff is beneficial in order to effectively service their hotels and owners at this unprecedented time. Additionally, because the gradual ramp-up may take a while, having enough staff on board is critical to being able to quickly react to the needs of owners.”

Dow recommends that management companies be proactive in the following ways.

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Reduce Expenses

Customize relief packages to protect each hotel owner’s assets by quickly taking measures to reduce expenses and acting as owners in this situation. This includes closing guest floors and F&B outlets and creating plans to reduce labor in a strategic manner.

Work With Brands

Utilize corporate staff to help owners navigate the relationship with brands, especially as those brands deal with massive layoffs. It may be possible to get more concessions from the brands on an individual basis such as delaying capital projects, as well as other initiatives, by a year.

Consult With Experts 

Facilitate discussions with numerous lenders, servicers, attorneys, and consultants on behalf of owners to apply for loans and free up cash to protect owners’ assets.

“The Dow Hotel Company has been busy focusing on providing the best service to its partners and hotel owners,” Dow added. “For instance, at a time when San Jose declared all hotels to be non-essential, DHC helped their hotel in fighting to stay open by actively offering hotel rooms to first responders, as well as relief nurses. DHC designed extreme quarantine routes for each group (i.e., one group takes the stairs and stays on one specific floor) to provide the distancing necessary for everyone’s safety. In addition, DHC fought for approval with the City of San Jose and Santa Clara County to continue the ongoing lobby renovation at the property in order to quickly bring the space back online for adequate social distancing space.”

“While it is extremely difficult to know when hotel demand will resume, management companies should be ready to strategically and proactively assist its owner/partners to prepare for whatever the future holds,” Dow concluded.

 


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