How has the coronavirus impacted the hospitality industry? $1.4 billion in weekly losses.
With the whole world on quarantine, occupancy rates are at an all-time low! Think of all the vacations, business meetings, executive suits, honeymoon getaways, foods and drinks, and more. These are the bread and butter of hotels, but people and businesses are not making any bookings in the coronavirus-affected hospitality industry.
Effects on the Hospitality Industry
Many organizations in the hospitality industry have been impacted by COVID-19 pandemic. AirBNB was about to go public before bookings started slowing down. Brian Chesky, the CEO of the company, had to put a halt to the plan for this reason. By and large, both big and small hotels are experiencing the impact.
- Marriott, a behemoth of global hotel chains, has seen occupancy rates of below 10 percent in both North America and Europe.
- Even more shocking is the number of locations they have had to close. In Europe, they have closed 500 hotels, while in North America, they have closed 870 locations.
- Management is estimating a drop of 60% in global revenue for March.
- As a result, Marriott is furloughing some of its 130,000 workers as they can’t manage to keep them on the payroll.
Many international hotels are experiencing group business cancellations with Asia Pacific hotel chains reporting the highest cancelation rates of 90 percent. In the United States, the rate is 40 percent, and in Europe, the rate has reached 52 percent.
At this rate, many boutique hotels are bound to find themselves on the verge of bankruptcy. Big hotel chains like the Hilton Hotel are also equally seeing a reduction of traction as the tourism industry plummets. The hotel closed 150 hotels in China in early March.
With more people reducing their travels and seeking to avoid places that experience high footfalls, what can the hotel management do to handle the coronavirus effects?
Response from the Coronavirus-affected Hospitality Industry
Hotels are cash-strapped. To maintain positive cash flows, they are leveraging their lines of credit. Hilton, for instance, borrowed about $1.5 billion to safeguard itself against the effects of the pandemic. This got Hilton to a cash balance of $2.1 billion. McLean Hotel also borrowed over $1.4 billion.
The coronavirus-affected hospitality industry has requested the US government for a bailout of $150 billion. Many businesses, including hotels, are going to benefit from the $2.2 trillion stimulus package.
But the big question is:
What Should Hotels Do With Their Share of the Spoils?
With a COVID-19 vaccine still months away from the first test, hotels are likely to remain empty in the meantime. So, this is the time to do all the upgrades and renovations that you have been planning to do. You want to make sure that when the storm passes, customers choose you over the competition.
If you have been looking to change the curtains, do that! Work on the windows, doors, beddings, furniture, and anything that will increase the value of your offering. When you share your pictures and videos on social media, for the audience to see at home, you want them to know that you are thinking about them. Even the tiniest upgrades matter to customers.
For instance, opening a door can be a headache when dealing with broken doorknobs. And if the doorknob is of poor quality, the door can get stuck. You want to have quality door guards, door seals, paper towel dispensers, wastebaskets, door closers, and hand dryers, among other hardware. This is where Archmaster comes in!
Archmaster, like the name suggests, is an expert in offering architectural hardware in the hospitality industry. Now that you have decided to make those crucial upgrades, Archmaster will be there with you. And because the company knows that businesses are hurting and that every cent counts, you will get a 30% discount until the end of May. Schedule an appointment today!