By Associate Professor Simon Pawson, Associate Professor and Academic Director (BMIHMS)
With a resurgence of coronavirus hitting Australia, many in the hotel sector and more broadly the hospitality industry is again feeling uncertain about the future.
After a brief period of respite, the second round of lockdowns has forced many Victorian businesses reliant on tourism back into crisis management. Internationally, the pandemic continues to have a substantive impact across the industry, with global giants such as Marriott and Hilton recording significant losses for this quarter.
Whether you’re a hotel professional looking for work, or you’re trying to keep your business afloat, the big question is – ‘when can hotels look forward to better times, and what’s the best way to approach a recovery?’
Our academic team has compiled a collection of informed opinions, expert knowledge, and interviews with some of our exclusive industry contacts.
1. Analysts and hoteliers offer opinions on the amount of time it will take for the hotel industry to get back to ‘normal.’
Abhijay Sandilya, Head of Business Development for InterContinential Hotels Group (IHG), Australia, advises that it will be “not a matter of weeks” to reopen a hotel that has been temporarily closed. The process of restarting a hotel will take months, and many will operate at low capacity for some time, slowly picking up in stages.
IHG operates 34 hotels in Australia, and of these, 18 had to temporarily close during the first months of the pandemic, some are now reopening.
Globally, IHG has reported signs of early economic recovery in their latest quarterly results. In China, they initially had to close 180 hotels – that figure is now down to just 10.
“I don’t see a massive rebound in business, but rather a slow and gradual increase,” Sandilya told Financial Review. “Having sufficient airlift into Australia and the ability to travel are so interlinked. We need affordable airfares to keep the flow of business coming.”
2. Analysts from McKinsey have developed 9 different recovery scenarios for the US and the global hotel industry, each with it’s own timeline.
The most likely scenarios, as determined by surveyed hotel businesses, were A1 (economic recovery by 2021) and A3 (recovery by 2023).
Gus Moors, Head of Hotels at Colliers International, is fairly optimistic.
He told the Sydney Morning Herald that while the coronavirus was likely to result in a short-term slowdown for 2020, experience from the SARS outbreak in 2003 suggested the accommodation market has the ability to bounce back faster than some other sectors of the property industry.
“This is due to the daily dynamic pricing of room rates, which could move up quickly as demand recovered,” Mr Moors said.
In June, Mr Moors, Karen Wales and Nigel Greenaway, also of Colliers International, published their findings from the Colliers analysis of STR Global Figures – a report assessing the impact of coronavirus on their hotel brand, and suggesting recovery tactics.
The report anticipated a recovery for Australian hotels fuelled by ‘revenge’ spending, increasing over the second half of 2020. Read their additional findings here.
3. Many hotel industry analysts are looking at China for guidance, and a realistic recovery timeline.
Although China’s outbreak was severe, it was brought under control through strict social distancing restrictions within a matter of months. So far, figures on the recovery of their industry have been hopeful.
Mainland China’s average hotel occupancy bottomed at 7% in early February but rebounded to as high as 52% the week of June 13. Clearing the 50% threshold meant business travel had begun to return, according to STR hotel news. See the full analysis here.
4. Our industry partners recently offered exclusive advice to students, graduates or aspiring hoteliers who will be entering the workforce soon.
As part of our Leadership Speaker Series, Blue Mountains International Hotel Management School (BMIHMS) and Torrens University Australia held a recent talk, where we invited three of our eminent industry contacts to come and discuss the ‘road to recovery’ for hospitality and aged care after COVID.
They gave us optimism, and gave our students optimism too – particularly students who may feel anxious about graduating into the post coronavirus economy. As it turns out, progressing into hotel management during a crisis may actually be an opportunity!
You can watch the video here – but if you want to get straight to their advice, read on.
“We’re now planning how we come out of this now, and how do we restructure our business. You know, I don’t think in my experience in hotels – and I’ve been in it for a long time – I’ve quite experienced what we’re dealing with at the moment.
Certainly the challenge now – and it’s a great challenge, almost an exciting challenge – is how do you rebuild our industry.
I would say to students that this is a golden opportunity that’s presented right now. There’s no greater challenge than to be part of rebuilding an industry, and what they will learn over the next two or three years will stay with them for the rest of their careers. In my mind, this is a fast track to these people being our industry leaders of the future.”
– Peter Tudehope (Regional Manager, Radisson Hotels Australia Pacific)
“COVID has given us a different lens and accelerated speed, and given a bit of a reason for change. You only ever get great change when there’s discomfort, and COVID’s created a hell of a lot of discomfort.”
– Simon McGrath A.M (Chief Operating Officer, Accor Pacific)
“Think about what skills you have that are transferrable. Everything that you have been taught is about dealing with people, about relationships – which we’ve spoken about as the underpinning of everything in pretty much any sector that you can think of. So, look at your transferrable skills, look at how they can apply, and back yourself.”
– Rachel Argaman (CEO, Opal Aged Care)
Now is the perfect time to upskill for your career in hotels since the importance of a quality education in Hospitality will never be as important as now.
See here for more information about courses on offer at the Blue Mountains International Hotel Management School.