Stack, be nimble

Much about this lockdown has been around staying nimble. In the UK, millions have been doing their daily PE with Joe, in which an increasingly long-haired and tight t-shirted Essex lad jumps around his living room pretending to be a kangaroo. Therapists have lined up to talk about the importance of daily exercise, daily meditation, daily viewing of free opera. All to stop us putrefying on our sofas and keep us nimble for the task ahead.

For while many are busier than they have ever been, it’s when the lockdown ends and money unearned needs to start coming in that the harder work will begin and that fitness and nimbleness will be put to the test.

Enter hotels. This is not an asset class synonymous with ground-breaking trends. Many are the hotels where you could still drop the in-room TV on the head of an intruder to finish them off, as Bruce Willis has done on any number of occasions. Finding a plug near a mirror or next to a bed is the stuff of fantasy. But at least we all have marvellously well-ironed shirts.

Investors aren’t much better. One nimble sector type of this hack’s acquaint this week described a large and meaty hotel investor as like “an aircraft carrier, sitting silent in the middle of the ocean, unable to move”. For those large funds which came into the sector recently with the promise of much wealth and minimal putting mints on pillows, things have got a lot riskier a lot more quickly than they had planned. Much is made by the brands (and, this week, Whitbread) around how many independent hotels were expected to bail out under the pressure. There were many investors new to the market who were looking at operational real estate and thinking it’s just too much hassle to be bothered. They may not sell at the discount that everyone is looking for from independents, but they will be making their exit nonetheless.

Nimbleness is in demand. One of the first trends seen since the lockdown was owners asking how they could change the use of their hotels into something which couldn’t be closed down so easily, something like extended stay. At this week’s In Sync we heard about how investors really can’t get enough of models such as serviced apartments - Brookfield’s Laura Brinkmann called for anyone who had some up their sleeve to please give her a call.

It didn’t end there. IHG’s Keith Barr said that the company’s hotels would have to swivel to meet the changes in demand: those who looked to the corporate market would have to try and attract the leisure guest which will dominate the recovery.

There was a time when the hotel sector introduced the world to the wonder of electricity, the marvel of room service, the novelty of the ice machine. STR’s Robin Rossmann said that, despite falling occupancies, the hotels themselves “don’t go away”. They don’t, but those who aren’t fleet of foot do.