By Ron Sering
The hospitality and travel industries have been among the hardest-hit sectors by the COVID-19 outbreak. In a recent webinar hosted by the think tank Brookings Institute, Marriot CEO Arne Sorenson reported that “at the low point (of the outbreak), we had 2,000 hotels closed, in the markets, you would expect, such as places dependent on group visits.”
Timeshares, smaller chains, and independently-run hotels and motels are also closed, but it’s not just hotels that were affected. Famed chef Jose Andres closed most his restaurants across the DC area for in-house dining.
It’s not just the businesses that are affected. “More than 1 in 10 Americans work in the hospitality sector,” said Tracy Haddon Loh, a fellow with the Anne T. and Robert M. Bass Center for Transformative Placemaking at Brookings.
While the COVID-19 outbreak is far from contained, case counts worldwide have begun to drop. So it’s not too soon to look at the shape of the post-COVID-19 Hospitality industry. And in the meantime, what can hotels, timeshares, and restaurants do to maintain a degree of solvency, support their staff, and weather the massive economic impact of this outbreak?
Adapt and Reposition
A report by McKinsey consultants extrapolates a recovery in progress by 2021, with other more conservative estimates of 2022. Worst-case scenarios call for recovery by 2023. For economy class hotels, the outlook appears to be a little better, the report said, because they might be able to sustain a lower occupancy rate.
A report by analytics company McKinsey speculates that economy class hotels may see a quicker and more robust rebound than more luxury-class accommodations, due to clientele such as truck drivers and extended stay guests, including construction and health care workers.
Many hotels have switched from housing travelers to offering their rooms to patients, those awaiting test results, or first responders socially isolating themselves between shifts. The city of Chicago, for example, rented more than 200 rooms for infected patients and those awaiting test results and leased an entire hotel for first responders.
On the employment side, some businesses have used the transferrable skills of their employees to help deal with the crisis. “We have more than 600 of our call center agents handling unemployment claims for the state of New York,” Sorensen said.
Upon closing his restaurants for casual diners, Chef Andres’ immediately converted many of his facilities to community kitchens. In the DC area alone, six of his restaurants provided meals at reduced prices for those who could pay, as well as solicited donations to provide meals for those who could not.
Make Safety a Top Priority
“It’s only simple things, washing our hands, wearing masks, that we need to do,” Andres said. Upon completion of their shift, employees are encouraged to go directly home to avoid the risk of community spread. “Those basic things, they seem to work, but if people are not conscious of them, it breaks down.”
Worldwide, Andres has more than two thousand restaurants operating. “Overall, these restaurants have been functioning without any problem,” he said.
With each state developing its own safety requirements applying and enforcing mandates for masks and social distancing among the guests can be difficult. Andre’s restaurants created a mascot, called Masky, to use a lighthearted approach to encouraging safe practices.
Limiting social contact between staff and guests can include steps such as implementing remote check-in using a phone application. For guests who desire direct contact with staff, installing shields at the front desk along with mandated mask-wearing provides multiple layers of protection.
In enclosed areas such as kitchens, increased social distancing improves worker safety, but also could reduce staff size, requiring staff to do more with less.
Stay In the Game
There are numerous opportunities to receive government or community support to help bridge the gap between now and the resumption of everyday business. While the Paycheck Protection Plan has terminated, the Small Business Administration continues several programs to provide support or relief to businesses affected by COVID-19. Additional opportunities for support are available at both the state and private level, including several GoFundMe campaigns. We have put a list together here.
The Long Haul with COVID-19
In time, travel will rebound, as people seek experience once again, and with it, the hospitality industry will emerge from this crisis. Hotels and restaurants must protect their most important asset, their employees, retaining them, and then keeping them safe as they return to work.
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