The first panel session of the day - From Managing Operations in Crisis to Planning for Reopening – was moderated by Russell Kett, Chairman, HVS who was joined by John Brennan, CEO, Amaris Hospitality, Nicholas Northam, EVP International, Interstate Hotels & Resorts and Kike Sarasola, President and Founder, Room Mate Group.
Asked about the immediate concerns, Nicholas Northam cited the pace of recovery and what shape the curve is going to take. Kike Sarasola said his immediate concern was: “That we are not united enough to get our industry going. We are all hitting the ball from side to side when we need to unite.”
Northam said they have half their UK portfolio currently closed with their focus on accommodating essential workers.
Room Mate Group have offered all their closed properties to medical staff and essential workers. Sarasola said: “My company has dedicated itself to helping anybody that needed it in this pandemic.”
All agree they were maintaining a sense of activity although not focusing on normal guests.
Kett asked the speakers where they need to focus their re-opening processes to which Sarasola said: “We have to focus on sanitary. We have to ensure the hotels are COVID free. Hotels that are hosting medical staff are already prepared with screens, PPE, etc.
John Brennan said they were focussing on employee training, safety protocols and practises so staff have confidence in the re-opening process. He said that high touch areas were moving to low touch whilst trying to maintaining the experience of hospitality and they were moving to physical distancing as opposed to social distancing.
Northam said the challenge was managing the hotels with the number of staff we currently have as well as managing the balance between the employees and making the returns for the owners.
In response to being asked how they are keeping a positive cash flow Brennan answered: “by trying to be as flexible as possible and exploring the options around going on and off furlough in the UK.”
Sarasola said that they: “Need more help from the governments as I think we’re all lost” and asked: “Is there anyone out there flying the flag on an industry wide level?”
Asked about physical changes, Northam confirmed they had installed screens, social distancing markers, were keeping guests as far away from employees as possible, for example by utilising remote check in. They were offering breakfast as a bagged and ready to go service and dinner as room service. He said: “The biggest challenge across the board will be that the customer is currently accepting of this level of service. How are we going to manage going back to a more normal level of service with “normal” customers rather than essential workers?”
Sarasola believed that the changes will be largely logistically rather than monetary or physical.
He added that they are firmly following government advice and adhering to guidelines and were being regularly visited by the police who were checking who is staying in the hotels. Employees were also being stopped on the way to and from hotel by the police asking them where they were going.
The CEO Panel - Leaders Redefining Hospitality after COVID – was moderated by Katherine Doggrell, Editor in Chief EMEA, Questex Hospitality who was joined by Keith Barr, CEO, IHG, Federico J González, President & CEO, Radisson Hotel Group and David Kong, CEO, BWH Hotel Group.
Asked about their relationships with owners, David Kong said that with 70% of staff having been furloughed, the owners were in dire straits. Best Western have offered fee reductions and, in some instances, fee waivers and were offering operational support in preparation for reopening. He confirmed the fee waivers would be in place throughout May and the group would be monitoring the situation going forward.
Federico González said Radisson were sharing as much information as possible so every owner could get ready to open as soon as the geography allows.
Asked specifically where owners are asking for assistance, Barr replied financial support, assistance in lobbying governments and a clear understanding of hygiene standards. He added: “it’s great to have collaboration with owners.”
All panellists agreed there was security in brands as they are already known for safety and security. With González pointing out that: “We need to give the consumer a common message.”
Kong suggested there was “a war on cleanliness” between the brands, “which is a good thing” and added that: “Cleanliness is going to be extremely important. Guests will see visual cues – screens, distance markers - to reassure them.”
Kong suggested that between 50-100% more time would be spent cleaning rooms which was “a necessary investment but it’s required to provide comfort and reassurance.” When asked whether Best Western will be helping with the cost for this additional cleaning, he said: “We have provided some flexibility.”
González believes the consumer is going to be ready to pay a premium to prioritize safety and Barr agreed saying: “The number one thing on consumers’ minds is safety. As an industry in travel and tourism, we need to work together to make the customer journey safe. It will be a collective effort.”
Asked what is driving the re-opening Barr said that other than government mandated re-openings, it was up to the owners. González said the issue facing Europe is the lack of clarity when travel will restart and when borders will reopen.
Kong agreed saying: “there are a lot of considerations that owners have to make but we are not dictating when they have to open.”
Asked whether there will be a difference in the response of the sector to the OTAs this time in comparison to after the financial crash Kong replied: “I would hope so but everyone is trying to survive.” González believes that the quantity of the inventory the OTAs carry means it’s hard to engage in the safety protocols. “We need to work together as an industry to spread the safety standards across the industry. Trust in the hotel will be even more in demand in the future. There will be more direct calls from the consumer to the hotel to understand the safety and so more opportunities for the consumers to reach the hotel directly.”
González believes profitable depends on a cure or a vaccine and said: “We’re unlikely to be a situation like 2019 until at least 2022.”
Acknowledging that domestic business is the focus because of the challenges around international long-haul, Barr said: “People want to travel and when markets open, people will travel. In the meantime, we’re staying well connected with our loyalty members and trying to have some fun with them.”
Commenting on his recent meeting with President Trump, Kong said: “I was very reassured by my recent meeting with President Trump, he was extremely understanding and supportive.”
Turning to sustainability, Barr said: “I think we will continue to innovate from a sustainability point of view. To say that sustainability isn’t important just isn’t true. It’s going to be much more comprehensive than just a carbon footprint.”
González said: “Radisson always considered planet, people and communities. We need to make sure all the safety protocols are sustainable with the environment. Hotels across the world have gained a huge amount of credibility. Sustainability efforts need to focus not only across the planet but also across people and communities.”
Simon Vincent OBE, President Europe, Middle East & Africa, Hilton joined Nick Van Marken, Managing Director, Van Marken Ltd to discuss “Supporting Change: When Hospitality Works with Governments to Prepare for the Future”. In his opening comment Vincent said: “We have come through the fire fighting stage. The real challenge is getting working capital back into the hotels and generating demand.”
He said that: “By and large the governments have responded reasonably favourably, we have leveraged existing relationships with associations like WTTC and various government relations department. This is a defining time for hospitality.”
He added: “It is extremely hard to co-ordinate across territories. As we come out of the crisis, this is where we are looking for co-ordination. We have been working with governments to make sure we are at the forefront. A lot of governments have taken our guidance and built it into policies.”
As also mentioned earlier in the programme, Vincent said: “There is the age old problem that the travel and tourism is sector is so fragmented and governments often criticise that it doesn’t talk with a unified voice.” Vincent and his peers have been working with the World Tourism Council, UKHospitality, the CBI and WTTC as well as other industry bodies to co-ordinating the industry and respond to government.
He acknowledged that: “Our business is going to be principally domestic in the short term and that is where we are gearing up.”
He said the group were focussed on installing confidence in customers and had launched a number of initiatives in relation to cleanliness. As has been noted often, he is well aware that people will remember how they were treated during the crisis and as such is engaged with regular and open dialogue with owners.
He added: “We have got to be realistic with how we approach the recovery. We’re looking at every single cost that is going into the business and we know we have to be flexible with owners.”
Concluding, Vincent believed demand was still there, although: “I think a V shape recovery is off the agenda but we have witnessed incredible levels of pent up demand.”
Ranque opened by saying they were “starting to see some bright lights. It’s like coming out of a long tunnel. We’re starting to re-connect with partners to discuss how we can re-start our industry.”
On innovation and lessons learnt he said: “This crisis has helped us see through the clouds and simplify. We have automated a lot of our processes that were manual before.”
On relationships with partners, namely brands and owners, he said these were stronger than ever. “When we all face a steep wall, you come together to scale it. As an industry, we need to collectively rebuild trust in travel, and remove fear.”
Ranque believes the major trends to transform travel and hospitality will be cleanliness and hygiene measures and said: “There is a big initiative to build transparency with consumers around this initiative. Contactless check in and check out will make the experience lower touch for consumers.” He also believes we will see a destination shift: “A chance for regional diversification where there is lower density. Now is the time to build online marketing around these destinations.”
He believes mid-market hotels will have to re-invent themselves but is reassured that the appetite for travel is not going away.
The final session of Day 2 and the closing panel of In Sync was ‘Diversification of Hospitality and Hotelisation of Real Estate: A Safer Way to Recover from the Crisis?’ moderated by Yousef Wahbah, Managing Partner, Global Hospitality Leader - MENA Real Estate, Hospitality and Construction Sector Leader,EY in conversation with Laura Brinkmann, Vice President at Brookfield, Peter Heule, CEO at Short Stay Group & Yays, Puneet Kanuga, Head of Hospitality Investments at Queensgate Investments LLP, Huburt Viriot, CEO at Yotel and David Kellett, Senior Director, Hotel Transactions, at Invesco Real Estate.
Laura Brinkmann opened by stating that: “Those that will be winners will be hospitality operators who manage to navigate the difficult landscape to allow for social distancing rules and protect those in their properties.” She believes the effects of the crisis won’t be long-term as the last few decades have seen people come together and enjoy travel. She said: “There will be a short term and difficult environment to navigate but long term there will be some winners in this space, namely those catering to young and keen travellers, who have been least affected by COVID-19.”
David Kellett felt that whilst social distancing measures go against what a good hospitality experience is, if you’re an optimist, there are plenty of opportunities for investment available.
Huburt Viriot said: “COVID-19 is accelerating trends we are already seeing – less contact with guests, more IT, grab and go replacing room service, new house keeping protocol and going cashless.” He believes travel will rebound but travel budgets will change.
Peter Heule said: “Hospitality is about real people – it’s about experiencing a city. The real estate is a way to showcase the hospitality.” He referenced data showing Europeans will be quicker to return to a “normal” state with the average length of stay in serviced apartments will further increasing. He said: “I see a bright future for serviced apartments”.
Puneet Kanuga said the medium age of their Generator hostel guests is 24 and this demographic was not impacted by crisis and keen to travel.”
Asked about whether investment in hospitality has been damaged, he said: “Fundamentally, nothing has changed from our perspective. This is a short term issue. The sector will come back”. He believes there will be a “flight to familiarity” with this environment not being conducive to fly off to more exotic sectors as that could be riskier.
Kellett said: “We have gone right back to the start of the cycle. This is a great opportunity to continue building a portfolio. We are investing for the long term.”
On lending Brinkmann said that: “lenders are very cautious at the moment and will need time to get comfortable again with hotel lending again.”