Hotel occupancies have seen slow, albeit inconsistent recovery over the past few months, and with the momentum of the new year at their backs hoteliers have been presented with an opportunity for optimising the return to mainstream travel in 2021—as long as they are willing to leave their comfort zone. With many construction and renovation projects from early 2020 still postponed until more concrete economic recovery takes off, timing is everything. Without a crystal ball to guide them, hoteliers will have to make tough decisions about when to resume work on the projects they have deferred.
The challenge facing hotels is twofold. Resuming development can bring the risk of completing projects early, leaving them dormant in a market that has yet to fully resume. Waiting too long creates the risk of interrupting business during key periods of economic resurgence. Deciding when and how to make that call will be the among the first hurdles hotels face this year.
For those owners willing to take a chance, an abundance of labour is available. This labour pool will dry up quickly throughout the year, eventually burning off over time. Identifying the right time to follow through with these investments is of the utmost importance and will fluctuate heavily based on a property's positioning and the current state of the asset.
Much of what is taking place remains outside of hoteliers' control, but those in the industry cannot afford to sit on the sidelines and wait for the stars to align before making decisions about the future of their properties. Now is the time to meet with lenders, understand the key data points driving your market and identify all of your available options.
Once everyone feels a common positivity about the state of the industry, construction and renovations will be front and center in the minds of every operator, and by then the real opportunity will have passed them by.
It is a time of turning a new leaf, trying different things and taking chances, but there is no room for blind optimism. Hoteliers must make intelligent, informed decisions based on hard data and backed up by the experience and insight of veteran leaders within the industry. Using these tools, they will know what is best for each of their properties on a case-by-case basis. However, it will not pay to be late to the party when business begins to improve.
This article first appeared in Hotel Management.