By Murray L. Dow II
As the entire hospitality industry experiences a major decline in hotel demand, it has never been more important for management companies to be intensely focused on helping their hotel owners and owner/partners to navigate the current environment through various types of cost-containment measures.
Management companies need to take a holistic approach by focusing on hotel owners. Maintaining near 100% of corporate staff is beneficial in order to effectively service their hotels and owners at this unprecedented time. Additionally, because the gradual ramp-up may take a while, having enough staff on board is critical to being able to quickly react to the needs of owners.
Management companies should be proactive in the following:
- Customizing relief packages to protect each hotel owner’s assets by quickly taking measures to reduce expenses and acting as owners in this situation. This includes having to close guest floors, F&B outlets and creating plans to reduce labor in a strategic manner.
- Utilizing corporate staff to help owners navigate the relationship with brands, especially as those brands deal with massive layoffs. It may be possible to get more concessions from the brands on an individual basis, such as delaying capital projects and other initiatives, by a year.
- Facilitating discussions with numerous lenders, servicers, attorneys and consultants on behalf of owners to apply for loans and free up cash in order to protect owners’ assets.
Here’s an example of how my company, The Dow Hotel Company (DHC), provided the best service for our partners and hotel owners:
At a time when San Jose declared all hotels to be nonessential, DHC helped our hotel in fighting to stay open by actively offering hotel rooms to first responders, as well as relief nurses. DHC designed extreme quarantine routes for each group (i.e., one group takes the stairs and stays on one specific floor) to provide the distancing necessary for everyone’s safety. In addition, DHC fought for approval with the City of San Jose and Santa Clara County to continue the ongoing lobby renovation at the property in order to quickly bring the space back online for adequate social distancing space.
Murray L. Dow II is founder and president of The Dow Hotel Company, a Seattle-based hotel owner/investor and operator of eight properties throughout the U.S.
This is a contributed piece to Hotel Business, authored by an industry professional. The thoughts expressed are the perspective of the bylined individual.