The reality of the current COVID-19 crisis is still hitting us like a ton of bricks. Going into March our industry was riding high and suddenly, the entire world came to a screeching halt. Although the federal government is racing towards a bailout, we still do not know if it will be enough to help all of the hotels in the country, especially the large number of those that already took the painful decision to cease operations. After careful deliberation, you need to decide if continuing to operate is the right decision while balancing many variables. These include adhering to stringent health & safety guidelines, ever changing financial realities, and the desire to maintain strong operations once we come through this situation.
If you choose to continue operating, below are some best practices you can consider.
Disclaimer: Please check with national, regional, and local authorities; your legal counsel; and your insurance company to ensure compliance with specific jurisdiction mandates and potential insurance requirements.
Clean, Clean, and Clean Again
It goes without saying that the health and safety of everyone at the properties – guests, team members, management, ownership – is of paramount importance. A top to bottom cleaning of the premises and adhering to even more stringent cleanliness standards than normal is crucial. Among the other items to consider:
- Cleaning – this includes the cleanliness of the premises as well as that of our team members and guests by promoting good hygiene in line with CDC, state, and local guidelines and directives. While it may seem like you are cleaning on a consistent basis, it’s better to be safe than sorry. This also includes constant handwashing and providing hand sanitizer stations in multiple locations throughout the property.
- Social distancing – as per the CDC, this is one of the most effective ways to stem the tide of infection. What have you put in place to ensure that guests in the lobby or waiting to check-in maintain at least a 6-foot distance? What steps have you taken to ensure that team members are maintaining social distance from each other and guests?
- Supplies procurement – one of the biggest challenges is ensuring that you have the necessary cleaning products, tools, and other equipment to keep your hotel cleansed in addition to masks and gloves for all team members. Be sure to reach out directly to your vendors and for branded properties, reach out to the brand to see how they can help procure supplies with their preferred vendors.
- Housekeeping and maintenance – be sure to implement stringent guidelines about when and how housekeeping and maintenance needs can take place, especially for occupied rooms. Best practices would prevent team members from going into guestrooms, even if guests are not present, until after checkout. And even then, a thorough cleaning of the room is essential while wearing appropriate protective gear.
How Do We Afford to Keep Going?
In addition to health and safety considerations, you must face the financial realities of whether your hotel can continue to operate. As business plummets and revenues dry up, it’s important to remember that there are still costs that must continue whether the building is open or not. It’s possible that the federal government will soon provide more guidance once the stimulus bill is passed but there are a few items you can consider in the meantime:
- Drawing on cash reserves – hopefully you have been maintaining some type of cash reserves or you have access to a line of credit for use in such situations. If you only have a bank-mandated capex reserve, check with your lender if you can access that capital for emergency use.
- Team member wages – one of the most painful parts of this crisis is that after working hard to build up a strong team to operate the hotel, there may not be money to pay wages. The federal government is working diligently to address this situation and it seems more likely that furloughing team members (as opposed to terminating them) will provide you and them the financial means to get through until they can return to work.
- Reduced revenue – seeking revenue opportunities has become extremely challenging but there are still some organizations or groups that need to travel. Look to government agencies at all levels to determine how your hotel can assist with their needs. Many jurisdictions have set up criteria for hotels to serve as temporary shelters for COVID-19 patients, people put out by the resulting financial crisis, or even to house the homeless. There are also traveling nurses, first responders, and other organizations that will need housing through this time.
- Expense controls – contacting your vendors to see if they can extend payment terms or even provide discounts for services rendered is an item to consider. Remember that some expenses must be maintained, e.g., pest control. Even if you choose to shut down, you do not want to come back to a property that may have more problems than if you continued minimal service to maintain the asset.
- Utility controls – utilities are some of the first organizations to acknowledge that making payments may be tough. They have been directed not to shut off service and work with your property for payment terms. If you stay open, you should consider shutting down floors and/or wings of the building. This will help to keep lighting and other energy usage to a minimum. It will also provide a smaller footprint for the working team members to inspect and ensure that property-specific utility controls are being implemented.
- Negotiating lender terms – while the stimulus bill may provide more guidance, if you haven’t done so already then you should reach out to your lender and determine how your loan can be modified or payments deferred. Ideally you can get a suspension of payment and have the missed payments be tacked onto the end of the loan term, but every lender may have different stipulations.
- Franchise fees – branded properties have several fees they pay, many of them variable based on monthly room revenue. Contacting the brand to understand what temporary reductions can be made may provide extra cash back to the property.
How Do I Provide Quality Guest Service?
As hoteliers, one of our primary focuses is providing a quality guest experience, but with limited staffing and stringent health & safety guidelines, how can we continue to do this? And for branded properties, how do we continue to adhere to brand standards when the current situation may not make that feasible or even safe? Consider the following:
- Brand concessions – in addition to the franchise fee concessions described above, you should reach out to determine how you can continue operating even if brand standards need to be relaxed. For example, if you have some type of food & beverage offering, be it a sit-down restaurant or a complimentary breakfast offering, local health authorities have the ultimate say in what you may or may not do. If you have an ordinance in place that prevents dining in, offering a grab ‘n go selection may be a safer alternative even though the brand standard may not allow it. Or what if you are required to obtain product or supplies from a specific vendor but they are out of stock? Brands understand that these are challenging times, but it is always best to ensure that you have these concessions in writing.
- Cross-trained team members – among the best practices we utilize is cross-training team members across departments. Having managers help in every department ensures that essential functions are being done while also allowing for team members to quickly redeploy as may be needed. Is the Director of Sales working the front desk or the General Manager doing laundry? Don’t be surprised to see how your team steps up for the needs of the hotel and your guests.
- Preparing to bring team members back – while it may be challenging to think about now, this crisis will pass. Once business picks up again and we can bring team members back, it will be difficult to simply go back to business as usual. What trainings do we need to prepare? How can we celebrate our team for sticking with us through this difficult time? There are many factors to consider now so we are not caught off guard when business resumes. This may be challenging to think about, but it will be one of the most crucial down the line.
- Deep cleaning and preparing the building – similar to the above, what steps do we need to plan now to do a thorough deep cleaning and preparation of the building once business resumes? You need to think about how the building will be guest ready and prepared for the resumption of business.
While this is certainly not a comprehensive list, and many financials considerations may be subject to phase three of the bailout pending in Congress, hospitality is a resilient industry. As evidenced by the past few downturns, it may take some time but we have bounced back stronger than ever each time. Whether you choose to close or remain open, know that we will get through this by working together, sharing best practices, and assisting those in need throughout our community.
And how’s this for staying optimistic? One school of thought says that once the stay-at-home orders are lifted, leisure travel will explode as people won’t be able to get out of their homes fast enough. Could you imagine if by the summer our properties are bustling like never before? That would certainly be a nice problem to have.