As hotels have reopened across the globe, operators have faced a raft of new challenges. Resources need to be balanced against lower revenues; new cleaning and greeting protocols adopted; and staff have had to be trained to respond to new, covid-19-driven routines.
Housekeeping, already one of the biggest resource issues, has had to face changes to meet emerging health and safety advice around the virus.
In addition, guest expectations have also moved around, as perceptions of risk have changed. The big hotel brands have been wrestling with whether now is the time to break the cycle of a daily maid service, for guests staying several days. Pitched as a hygiene issue, it could also be a cost saver.
Among those balancing these issues at the sharp end is Hans Olbertz. A seasoned hotelier who has run hotels around the globe, today he is on the board of Lux Hotels, and founding governor of the International Association of Hotel General Managers. And, with a close eye on hotel efficiency, he is also on the board of hotel operations platform Optii.
“The leisure business will be fastest to recover, especially around seasonal demand,” he said of the current situation. “The slowest recovery will be from city hotels, while people who work in banqueting will see no demand for a while.”
There has, said Olbertz been a great opportunity to learn from peers, formerly simply rivals. “Some have done an excellent job, very fast – steal with pride from your competitors!”
But with the enforced changes in operating patterns due to covid-19, come significant operational changes. “One example is a hotel in Mauritius, with 17 bungalows”. With the intimate central dining facility closed for safety reasons, “the whole service will be room service,” – demanding an increase in staff to execute.
“There are opportunities out there”, insists Olbertz. “People will work harder, and you can really hire fantastic talent.”
At a resort hotel he manages in Tirol, he said it was necessary to agree a 50% cut in staff, in order to stay alive. As a result, staff have had to learn new skills as they multitask – and they have enjoyed the challenge of shaking off old, sharply defined roles: “The nicest thing is the spirit of those still working.”
Around cleaning protocols, there are a range of challenges, and these are ongoing: “We have to invest a lot in people on the awareness of covid-19. It’s a completely new ballgame – and you don’t want your hotel to look like a hospital.”
Katherine Grass, CEO of Optii Solutions, said the focus on reducing cost and streamlining operations “really plays into our wheelhouse”. The company’s platform enables granular modelling of cleaning activities, seeking to improve efficiencies by helping team members standardise the room cleaning process, and record and learn from scheduling.
“Those first few months, we had lots of processes and protocols put into place. And there has been an opportunity to change the system, with this new normal.”
Initially, cleaning times went up, with a change in the guest profile to more leisure guests, and more one night stays that increases demand for checkout cleans. “All of that was driving up time, by up to 15%.”
“The challenge was how to mitigate this risk,” with an effort to reduce stayover cleans. “We started to pool resources.”
Across the Optii platform, there have been some interestingly different approaches, from region to region. In Asia, for example, stayover cleans have remained part of the roster, “and they’re eating the additional cost”.
“There are many that stick to pen and paper – this has really changed in the last few months,” as a willingness to deploy technology has come to the fore. “Some of the bigger brands are very interested in listening – but the independents have been much quicker. And the management companies have opened their ears the widest.” Quick returns are on offer from Optii, she promised: “Within four to six weeks, you can absolutely save on resources and do more with less.”
Grass said those regions with higher labour costs have also been more interested. And the system allows for analytics that provide feedback regarding what is working well in other places. “The hotels that aren’t taking a data-driven perspective are really struggling.”
While it is making considerable impact on the cleaning side, Optii is now moving into other operational areas such as service delivery and maintenance, allowing for labour optimisation; and it is also adding a chat solution that allows hotel teams to communicate more effectively.
HA Perspective [by Chris Bown]: Finally, technology is making headway into the time and motion of the hotel space. With guest safety more to the fore than ever, it really is time to exploit the digital age. Solutions such as those offered by Optii not only improve efficiency, they also tend to solve the resource issue that, not so long ago, the UK hospitality sector was complaining about, around its Brexit worries.
While some innovations, such as digital keys, demand capital expenditure, the payback for ditching the supervisor’s clipboard can be measured in weeks. What’s not to like?
Additional comment [by Andrew Sangster]: The so-called “new normal” for hotels looks grim. While many operators are claiming to have reduced their breakeven occupancies thanks to cost cuts, there is a big question as to how sustainable such cuts are. Servicing equipment and capex on refurbishment can only be postponed for so long.
In addition, reopening has seen a significant increase in costs in some areas, particularly with regards to cleaning. Overall, however, costs have been taken out.
Data from HotStats shows that hoteliers moved quickly to cut costs, shaving USD90, US94 and USD99 each month on a per room basis for April, May and June respectively. But this did not keep up with the drop in revenue, which was down for the same months at USD170, USD190 and USD220.
Admittedly, these costs have been removed while most hotels have been shut and staff furloughed but nonetheless, there are substantial fixed costs and operators have done well in removing what costs they can.
There is a further challenge with the idea of breakeven occupancy: rate. For luxury hotels in particular there is a big question has to whether rates can be sustained if guests are unable to access all the facilities and those facilities they do access are often offered in a less than luxurious way.
Thus it calls into question the historic notion of breakeven occupancy for luxury properties being lower than for lower priced properties. It is hard to see guests paying a significant rate differential for a room if the only thing on offer is a slightly bigger room (and even this is not always the case) with better fittings.
The big unknown for operators is how long this “new normal” will continue. Maybe it will be gone within a few months as vaccines arrive (I doubt this, based on an objective reading of the scientific evidence I have seen and can understand).
Most likely, a decent testing and therapeutics regime will enable a semblance of the old normal to return. But this too looks many months, maybe as much as a couple of years, away.
There is much gnashing of teeth in the UK currently about our testing capacity and yet the UK is currently testing more people than any other country in Europe. The UK Government is planning a “moonshot” expansion to testing and this will indeed be required to deliver anything close to the old normal. This moonshot will take time to deliver. In the meantime, the challenge is running hotels profitably.