Hotels Have the Opportunity To Win the Race

By David Godfrey Aug 26th, 2020

In an article from the NY Times Mr. Henry Harteveldt, a lodging industry analyst predicts that hotels will have a hygiene advantage over Airbnb or similar stay accommodations.  He states, “Cleanliness and hygiene will be the new five-star restaurant or 800-thread-count sheets…And hotels will have marketing budgets to promote this.”  But he also states, “Hotels don’t have this battle in the bag.”

In the past it was luxury, in the present and foreseeable future it will be who can provide the safest stay. Customers will demand a pledge of a safe clean stay with innovative methodologies to reduce risk.

At All-Time Lows

In a May 21, 2020 whitepaper, STR (a global hospitality sectors data, analytics, and marketplace insight firm) found April’s European occupancy rate to be “generally incredibly bad.” with London having the second highest major city occupancy rate of 23% (Tbilisi was first at 25%).  

The best performing major European city has 77% of their hotel rooms unoccupied.  This is a city that preCOVID-19 had one of the best occupancy rates in the world with an 86% occupancy rate.  

Additionally, Barcelona has the highest number of hotel closures at 96%.  By comparison London had 78% of their hotels close due to the COVID-19 pandemic.

In similar STR surveys the United States has nearly 7 out of 10 hotel rooms empty in addition to the thousands of hotels that have been shuttered due to COVID-19 culminating in a loss of over $25 billion in room revenue.

Generally incredibly bad numbers indeed!

With cleaning and hygiene being the focal point, it will be important for hotel chains to enforce their cleaning standards to be consistent from site to site. It’s time for the hotel industry to be creative; to think outside the box; to partner with companies that can help them take competitive market share by offering their customers the new luxury – safe, clean rooms and facilities.

Covid19's Losers

In a United States Bureau of Labour Statistics report the Leisure and Hospitality Industry eclipsed all other industries with the largest one-month net decline in payrolls.  Almost 3-times the nearest industry.  In the Bureau’s Employment Situation News Release they state “In April, the unemployment rate increased by 10.3 percentage points to 14.7 percent. This is the highest rate and the largest over-the-month increase in the history of the series (seasonally adjusted data are available back to January 1948). The number of unemployed persons rose by 15.9 million to 23.1 million in April. The sharp increases in these measures reflect the effects of the coronavirus pandemic and efforts to contain it.

Again, staggering numbers!

As Henry Harteveldt stated in the beginning of this article, cleanliness and hygiene will be the new five-star restaurant or 800-thread-count sheets.  In the past it was luxury, in the present and foreseeable future it will be who can provide the safest stay. Customers will demand a pledge of a safe clean stay with innovative methodologies to reduce risk.  As we emerge from nonessential travel bans the hotel industry will be fighting for a bigger piece of a smaller market.  Survival of the fittest will favour those who can adapt.  

Simple Solution: Effective Cleaning

In an independent survey of the top 10 largest hotel chain websites the results were surprising.  4 out of 10 had little or no new cleaning plans to battle the post COVID-19 market share while only 2 of the 10 made their COVID-19 commitment to clean the focal point of their website.  4 of the 10 thought outside the box and partnered with hygiene companies or industry related associations to offer innovative solutions plus gain a unique marketing advantage.

With cleaning and hygiene being the focal point, it will be important for hotel chains to enforce their cleaning standards to be consistent from site to site.  Managing the required consistency can be burdensome.  An area manager of a small chain of hotels liked a new app called FotoFinish because it allowed him to validate the cleaning in his territory everyday, without having to travel to the site.  It’s time for the hotel industry to be creative; to think outside the box; to partner with companies that can help them take competitive market share by offering their customers the new luxury – safe, clean rooms and facilities.

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