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Pragmatism will drive the hotel industry forward, according to hotel executives who spoke during the International Hotel Investment Forum.
Now is not the time to throw out traditional operations or business models, but there is room to shift positions somewhat.
Speaking at the “Is It Time To Rewrite the Rule Book?” session, panelists said COVID-19 has in itself rewritten the rule book, and if this is not a time to further rewrite the rules, then when is?
Yotel is one company that is adapting. CEO Hubert Viriot said the micro-hotel company is moving into the franchise game.
“We realized we had to be far more agile,” he said. “Our owners were asking for the new model, and we said, ‘No, no, no, we are not ready,’ but we are now. We opened a hotel in London right in the middle of the pandemic, and London has been hit hard, but we saw we can break even with super-low [revenue per available room] and generate cash flow.
“We are starting the franchising program in the U.S., but we’re looking after the staff, as not everyone wants exposure to labor,” he said.
Yotel has built its capabilities to demonstrate to owners the franchisee process, Viriot said. The pandemic has hampered everyone, so hoteliers need to work together, he added.
Michael Deitemeyer, president and CEO of Aimbridge Hospitality, said the rule book is useless if operators do not understand what owners’ objectives are.
“We looked at how we must pivot cash-flow modeling and support owners, and we’re already in the process of changing our reporting to specific hotel types, adopting dynamic analysis so our teams know they are analyzing a property in the correct way,” Deitemeyer said. “All properties differ, and we must look individually at assets.”
Manikis said he is seeing an increase in hotel management companies in Europe. But he stressed it’s critical to build relationships with all stakeholders in a hotel, from owners to employees.
“White-label [management firms] are increasing in presence and value, as in some cases it makes sense,” he said. “The moment you start putting people in verticals, you lose the opportunity. What is required now is boots on the ground, get to know your local [general managers] and really get to know your local comp sets.
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