Hoteliers consider amenities dropped during recession

Opinions differ as to industry’s biggest challenges in these uncertain times

Hoteliers are considering bringing back those amenities and operational features, not to mention jobs, which were cut during the asset-slashing days of the recession. However, many hotels remain cautious about splashing out too soon.
“We’re showing fairly significant improvement in the performance of our hotels, and general managers want to bring back some staffing,” says one. “But I’m pushing back as long as our scores with the premium brands are in good shape. We’re going to try to keep the cutbacks in place as long as we can and still deliver the experience.” Another hotelier expresses the formula for reversing cutbacks in this way: “It was about eliminating things that didn’t impact guest satisfaction. We’ll continue on, using that as our benchmark.”
The hotel industry faces other significant challenges too. One hotel developer says: “Challenge or threat, we are in parallel to the same threats as the airlines – terrorist attacks and gasoline. From the macro viewpoint, those are clearly the biggest challenges we face. From the development side, the financing environment is loosening up; if somebody can figure out how to build new hotels inside old boxes, maybe we can learn something and stop this vicious cycle that we go through.”
Refinancing is clearly hugely important to hoteliers right now. “Regardless of RevPAR, occupancy and ADR, financing is the key to everything,” says a hotel executive. “Anything built from 2007 to 2009, the value has dropped considerably. Appraisals are now being ordered by the banks, and you have no control over it. If you don’t use a major appraiser, you have a problem.”
Although the industry is in a much better position than it was a year ago, the unknown still seems to the industry’s biggest challenge.
[pictured: Grand Hotel Stockholm, courtesy IHG]


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