The phrase “new normal” has been thrown about for most of the Covid-19 pandemic but the problem is normal keeps changing as variants emerge and countries experience new waves.
So how do hospitality investors decide when the market has settled?
“We pretty quickly a couple of months in got to the point where we were trying to understand…where the new trading normal could lie and it became apparent with every week progressing and European governments equally trying to grasp the situation, that there was no new normal,” Laura Brinkmann, vice president at Brookfield’s European Real Estate team, told the audience at Adjacent Spaces @ IHIF 2021.
This meant the business had to go back to basics in terms of trading and operations.
At serviced apartment operator Edyn Group, which Brookfield bought in 2018 when it was known as SACO, the company quickly pivoted to targeting those that still needed accommodation, such as essential workers.
“They taught us a lot it was pretty impressive,” Brinkmann said.
For those on the operations side, the biggest challenge was understanding the ever-changing rules across multiple jurisdictions.
“One of the big headaches was to really understand the framework of where could you operate, because we’re active in the UK, Netherlands, France in Germany, and each country had their own regulations,” said Erik Jacobs an investor and board member at Cycas Hospitality as well as founder of Horeca Investment Partners.