Ed Brock is an award-winning journalist who has worked for various U.S. newspapers and magazines, including with American City & County magazine, a national publication based in Atlanta focused on city and county government issues. He is currently senior editor at Asian Hospitality magazine, the top U.S. publication for Asian American hoteliers. Originally from Mobile, Alabama, Ed began his career in journalism in the early 1990s as a reporter for a chain of weekly newspapers in Baldwin County, Alabama. After a stint teaching English in Japan, Ed returned to the U.S. and moved to the Atlanta area where he returned to journalism, coming to work at Asian Hospitality in 2016.
THE CORONAVIRUS EPIDEMIC is significantly disrupting the hospitality market and hoteliers are scrambling to find ways to stay in business despite the sudden drop in travelers. However, there are certain knee-jerk reactions they should avoid, according to a blog from HotStats.
The effects of the virus outbreak on U.S. hotels’ occupancy, RevPAR and ADR was felt particularly in the first two weeks of March, according to STR. Similar impacts are being felt around the world, according to HotStats.
“It’s still early, but the impact has been swift and pernicious for the hospitality industry as travel has come to a standstill, drying up occupancy and throwing a wicked curveball to revenue and accentuating expenses, which in turn will cast a pall over hotel bottom lines,” the blog said. “Yes, it will hurt, but people will travel again, companies will hold meetings and conferences will floor. This is the end of a prolonged cycle and the beginning of a new one. A phoenix rising from the ashes. Will you be ready for the bounce back?”
Being ready means avoiding mistakes that may have been effective strategies in other downturns, such as cutting rates. The current situation doesn’t lend itself to that remedy, however.
“As one hotelier told us, that ploy won’t do any good this time, seeing as people are simply not traveling,” the blog said. “This has nothing to do with price.”
There are steps hoteliers can take to protect their revenue and reduce their costs, HotStats said.
In terms of revenue, hoteliers should know their segments and when they are likely to return so they can best benefit from them. Don’t be too quick to cut rates or cut too deeply, because that won’t do much to improve occupancy in this case but may slow recovery once the crisis abates. Be flexible with cancellation polices and be aware of when major events have been rescheduled.
As for cutting costs, HotStats said marketing budgets should shrink because, again, advertising will not make more people travel. Along with being prudent about cutting rates, don’t send too much inventory to OTAs. Take advantage of government subsidies for payroll and fixed costs. Use the ebb in occupancy to finish any capital improvements if you have the funds, and consult monthly data to measure your performance against other hotels.
Sonesta launched Americas Best Value Studios, an extended-stay version of ABVI.
The model targets owners seeking limited front desk and housekeeping.
The brand meets demand for longer-term, value-focused stays.
SONESTA INTERNATIONAL HOTELS Corp. launched Americas Best Value Studios by Sonesta, an extended-stay version of its franchised brand, Americas Best Value Inn. The model targets owners seeking limited front desk and housekeeping, optional fitness center and lobby market along with standard brand requirements.
The brand aims to address the growing demand for longer-term, value-driven accommodations, Sonesta said in a statement.
"Americas Best Value Studios by Sonesta represents a strategic evolution of our trusted Americas Best Value Inn brand," Keith Pierce, Sonesta’s executive vice president and president of franchise development, said. "We are expanding our offerings to directly address the increasing demand within the extended-stay segment, providing a practical solution for travelers seeking longer-term lodging at value. This new brand type allows our local franchised owner-operators to tap into a growing market while maintaining the community-focused experience that Americas Best Value Inn is known for."
ABVI has a majority presence in secondary and tertiary markets, the statement said.
The extended-stay brand’s operational model features a front desk, bi-weekly housekeeping, on-site laundry and pet-friendly accommodations, Sonesta said. Guests can also earn or redeem points through the Sonesta Travel Pass loyalty program.
In August, Sonesta named Stayntouch its preferred property management system after a two-year review of its ability to support the company’s franchise model. The company operates more than 1,100 properties with more than 100,000 rooms across 13 brands on three continents.
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