SECTOR SERIES: Hotel Survival
March 31, 2020
Hotels repurpose to get through the crisis
As the Government belatedly joins the global trend of rigid enforcement of ‘stay home’ strategies, any hope that UK hoteliers may have had of somehow struggling through this tragic crisis with severely limited occupancy rates has evaporated. Guest revenues have finally flatlined and will stay that way for the foreseeable future.
Nevertheless, there’s absolutely no need to despair. There are so many ways that hotels can be reconfigured in the short term. The news is already full of innovative redeployment of space, kicked off by ex-footballers, Gary Neville and Ryan Giggs’ compassionate donation of their two properties for use by NHS staff. Hotels everywhere are being turned into makeshift hospital space and quarantine centres, as well as places where the homeless can self-isolate.
The nature of the deals to be done with the NHS and other authorities will vary and will be complex, with financial compensation a sensitive topic, but hoteliers must be sure that they don’t shoulder the burden of reinstating their properties for leisure use afterwards, unless they choose to do so as a contribution to the national effort. As an aside, it’s important to check the insurance angles of these changes of use.
Managing costs
Apart from these initiatives, there’s not much you can do about revenues. Costs are another matter. There’s merciful relief from the unjust burden of business rates. If you lease the property, it’s time for an adult conversation with the landlord around the ‘please sir, I need a three month rent holiday’ theme, pointing out how important it is for them to still have a tenant when this is all over.
All good hoteliers know that no matter how well located you are, how good the décor and comfort is and how good value your room rates are; what makes guests enjoy their stay, return in the future and recommend the experience to friends is the people. If you’ve already laid off staff, get them back, put them on furlough and take the Government’s 80% grant for their wages. You’re sure going to need them when you re-open. One of Northern Ireland’s top hotel chains, Hastings immediately reversed its job losses once the employment scheme was announced.
Cash help is available under the various Government business support schemes announced in the past few days. Check them out and get on with applying, though please think carefully about taking the loans on offer. No matter how attractive the terms might look, it will eventually have to be repaid and could turn into a future millstone.
Keep in the public eye
But whatever happens, by far the most important thing over the next few months is to keep your brand in the public eye, either by email to your customer database or through social media. People will be keen to support businesses who step up in this crisis, so don’t be shy and tell the world that you’re following Gary Neville’s example. If you and your staff are doing fantastic community work, shout about it.
You must find reasons to talk regularly to your customer base and the world. Was fine dining your thing? Maybe you can share your chef’s recipes. You might even post videos showing how they are prepared. Not only will your customers appreciate you staying in touch, but they’ll love you helping to keep them amused to while away the endless spare time they’re going to have over the coming weeks and months.
One last key point. You’ll be drowning in cancellations, so why just accept them? Why not turn them into postponements instead, with the offer of a discount as an incentive? Then your establishment will hit the ground running when this is all over.
So, please don’t give up. You had a good business before and it’ll be great again after Coronavirus has finally been vanquished.