The near future appears to be taking shape as governments daily release statements on coronovirus COVID-19 policy affecting tourism. It has become apparent that hotels that open up in 2020 will need to be able to be profitable on around 30% occupancy or stay closed.
Strategic decision making will need to be made for hotels to profit through this challenging period. The ability to think out of the box to re-map procedures is necessary to minimise your cost levels.
Hotelient have been almost alone in predicting the impact of Coronovirus on-demand in the Costa del Sol from mid-March. Hotel management has been slow to realise the impact on their market. The image of ostriches sticking their heads in sand springs to mind. This behaviour is understandable as it is a normal human response to hope beyond hope that the outlook is more positive than reality. They have been too focussed on the wrong issues. Certifying your hotel as COVID free right now is meaningless, never mind that most travellers would be very sceptical of such a statement as it is an impossible guarantee.
What hoteliers should be looking at is what is happening in their inbound markets. There are several headwinds to be faced. The top end of the market will not be affected by higher travel costs, but maybe travel inconvenience will put them off. The more affluent travellers also tend to be older, and if they have underlying health conditions, they will be more risk-averse to air travel. Other segments will have taken a hit on income and with future employment uncertain, they may desire the holiday on the beach, but the sensible action is to pay down credit card debt and try and save, in the knowledge that the virus is very likely to return in winter. Then you add in the statement made recently by the UK Health Secretary that Brits should not be planning an international holiday this summer! The latest survey of the British market reveals that people want to travel, but the majority have already decided to rebook their 2020 foreign trips to 2021.
Over the last few months, Hotelient has been helping numerous hotels plan for the future. A plan is only as good as its assumptions that it is built on. Hotelient benefits from having staff outside of Spain, which provides a more objective view of the travel market compared the local view of Spanish based agencies.
A lot of companies are giving false hope to hotels, saying that they can do things to ensure that Spain will remain a key destination and that they have the power to generate demand. The truth of the matter is this. People still want to come to Spain for the beaches, golf and culture. The desire to have a foreign holiday is and will remain strong until maybe, the climate change movement successfully challengers the ethics of “unnecessary” air travel. Spain is a key European destination. The ability for these people to come to Spain is at the whim of Government policies. These policies impact the cost and ease of travel to Spain, and possibly more significant in the short and medium-term, the contraction in the economies of the inbound markets. So the only thing hoteliers can do to affect demand is to apply political lobbying and keep up the pressure via their trade associations to make travel to Spain as friction-free as possible.
Now the sad truth is that a number of hotels will close or go into administration. Hotels that were in a precarious financial situation before the crisis will be unviable going forward. But the hotels that adapt and survive this unprecedented shutdown will emerge more profitable and efficient than ever before.
In the current market, chains and brands have a big advantage of independent hotels. They can share operational processes, management and marketing. The cost savings gives them a big advantage over the independents. Hotelient exists to offer the independent hotelier the benefits that the chains provide, without taking away the hotels independent status. Hotelient levels the playing field
FREE Hotel Management Recovery package to relaunch five Costa del Sol Hotels
Hotels need to be able to be profitable on a 30% occupancy. This is a benchmark that larger chains can achieve and hotels that have not been achieving this need help now. Cost savings need to be made. If a hotel thinks it has reduced its costs to the bone, and are still not profitable, they need to contact Hotelient who will be able to show them a way of reducing costs further, without cutting services.
Hotelient would like to help hotel owners in its own backyard. Hotelient knows that perfectly viable hotels will go into administration or get into more debt when they do not need to. Hotelient has the spare capacity to take on the management of up to five hotels in the Costa del Sol region at no charge to the hotel for the second half of 2020. This offer is a minimum saving of €60,000 to qualifying hotels.
Hotelient will provide a Hotel Director with over 20 years experience. The Director will analyse the hotel operation, take the difficult decisions, decide when the right moment is to open. They will work hand in hand with the owner based on a clear strategy using our proprietory O.R.D.E.R™ management method.
The benefits of being part of a family
Hotelient can increase its members buying power through a transparent bidding system with suppliers, thus reducing costs in a way a single hotel cannot.
For example, implementation and certification of Covid-19 secure policies based on the recommendations from the WHO when required.
It is keeping abreast of any government subsidies that become available or new tax benefits.
Undertake the necessary negotiations with hotel staff and suppliers.
By having a person from the outside to come into your hotel to review your current situation, you will gain a fresh outlook on your path to profitability. Hotelient is seeing a segment of hotels not going far enough in their reorganisation post-COVID-19. This inaction is putting those hotels at risk of administration. Hotelient will look at every single department within a hotels organisation and take the necessary decisions: stock reduction; menu changes; energy reduction; etc;
Hotelient’s objective is to get your hotel to be profitable based on 30% occupancy or less whilst maintaining and improving your levels of the guest experience. This is the new normal for the short and mid-term. If your hotel has high fixed costs which are insurmountable, Hotelient will then consult with you to minimise your exposure.
Team of Experts
As most of the staff are on ERTE right now, Hotelient will only bring back to work the staff that are necessary to relaunch the hotel. In many cases, it will only be 3-4 staff with a gradual increase as occupation allows. Our great relationships with agencies and OTAs will allow us to work with them in marketing your hotel whilst renegotiating commission levels. Also, our marketing team will amplify your online presence to make sure we are sending the right messages to your future guests.
Hotelient is renowned for being turnaround specialists. Hotelient has taken several hotels which were under financial pressure both in the UK and Spain and put them on the right path. This was achieved by clinical decision making based on best practice. Hotelient is not encumbered by historical relationships with suppliers or staff. These relationships create a comfort zone for hotel management leadership, and that slows down the implementation of tough decisions. It is rare for a hotel general manager to recommend to his owner that his job is not necessary. Now is not the time for sentiments.
Giving back to Hotels
This is a critical time for all hotels but especially in the Costa del Sol. Hotelient is proud to offer five hotels, a €60k Relaunch Management package for FREE to help vulnerable hotels through this difficult time. Hotelient has over 30 years of experience in the hospitality industry. The industry is resilient because people will always desire to travel to a different place with a better climate for their holidays. Spain is that destination for many northern Europeans. Hotels that adapt now can not only survive but also thrive over the medium term.
To apply for the Hotelient six-month relaunch Management Program, please contact John Kearney today.