Bottom Line Perspective

Bottom Line Perspective
Owner/Operators Weigh In On Today’s Challenges During Recent BITAC Panel
By Dennis Nessler | November 13, 2020

With occupancies generally hovering in the 40 to 50 percent range for many of their properties, several hotel owner/operator CEOs maintained they don’t expect a full recovery to ‘normal’ levels for quite some time with estimates as far out as 2022.

In addition, the executives weighed in on current conditions, as well as some of the changes they’ve experienced from an operational perspective as a result of the pandemic, during a panel session entitled “The Bottom Line: Keys To Profitability For Hoteliers In A Post-COVID Environment,” which took place during BITAC Owner’s Virtual Connect 2020 earlier this week.

Elliott Estes, principal, Woodmont Lodging—which owns 8 properties with a focus on limited-service—provided his outlook. “By and large we’re really circling March 2022 and it’s not being pessimistic. We just think the first half of next year is kind of a wash. By Q3 we’re looking at some return to normalcy but then you’re going into Q4 and Q1 of the following year during the slower season for those markets,” he said.

Heidi Wilcox, president/CEO, First Call Hospitality—a third-party manager with a portfolio of 8 assets primarily in the upper Midwest—offered a similar forecast in the context of a shift in strategy. “Because corporate is not back and group is minimal we’ve looked at local. What can we do in our local markets to offset [the decline] and how can we get through 2021? Because we’re hoping that by January of 2022 we’re back to some normalcy,” she commented.

Gregory Winey, President/CEO, Northpointe Hospitality Management—which operates 9 assets primarily in the Southeast—noted that hotel performance has varied by market for the company, but did identify a potential source of encouragement for the industry.

“If you look at the TSA [Transportation Security Administration] counts sometime around mid-March of this year they were down to about 85,000 passengers per day versus 2.1 or 2.2 million so you’re talking about 5 percent capacity. That capacity is now almost between 35 and 40 percent so that gives me great confidence that things are starting get back to some level of normalcy,” he noted.

Jeff Loether, president, Electro-Media Design—which provides Audiovisual and acoustics consulting and design—detailed how meetings have evolved over the last several months.

“The smaller and mid-size properties are going to be picking up a lot stronger with remote meetings as opposed to what used to be an annual conference of thousands of people all coming together in Vegas or Orlando. This hybrid and virtual technology is going to be allowing for what we call hub and spoke types of meetings. We’re seeing more meetings coming back, but in smaller secondary and tertiary markets,” he said.

Loether further discussed some of the current challenges pointing out that space requirements, among other things, have changed as a result of the pandemic and social distancing. “Technology is moving quickly. We’re learning a lot and meeting planners are learning a lot. How do you bring that remote attendee into an in-person meeting room in a way that’s respectful and engaging? How do you create that remote attendees’ experience so that it’s as engaging and they feel as involved as the people who have actually shown up?” he noted.

Meanwhile, the executives acknowledged that although they’ve measured some progress in terms of performance recently there’s still a long way to go.

“I would say that we’re at about 50% capacity. It is slowly trending up. It was very much a drip and it’s becoming a stronger drip, but I wouldn’t call it a stream yet,” said Winey.

Wilcox reported similar results with the exception of the company’s extended-stay properties, which continue to outperform other hotel segments.

“Today most of our assets are in that 40 to 50 percent occupancy range. Because of the recent spikes in North Dakota we’ve seen some downtrending and we hope that will change soon,” she asserted.

Loether emphasized that most of the company’s projects in development have continued to move forward, perhaps at a slower pace, but further talked about the impact on the industry at large.

“The biggest hit has been the nature of meetings; everything went virtual. I am looking at this as we’ve just we’re experienced a quantum leap. This is a 10-year launch into the future of technology for meetings,” he said.

Finally, the panelists addressed some of the new cleanliness standards and protocols that have been implemented agreeing that the constant changes to the guidelines from the CDC initially was particularly challenging.

“It felt like early on it was hourly, then it went daily and then weekly so it was very confusing for us to kind of follow a playbook. We did do an internal playbook for NorthPointe and it was designed around a particular brand, or if it was an independent hotel, and we geared that with what the brand requirements were,” said Winey.

Wilcox detailed some of the issues around how long the pandemic has lasted, in particular. “We thought we’d be through this by now. We’re seeing fatigue with our associates and so we’ve had to come up with other ways to keep them engaged, such as looking at equipment in a different way to get through this in the next six months. So we are now reviewing that and finding ways to make it profitable for businesses from a labor standpoint and from that equipment as well,” she said, further noting the company has managed to find grants to help subsidize some of the associated costs.

“There are challenges that we face beyond just the safety processes and protocols on the operational level and they are investor engagement and dealing with our lenders as well,” added Estes.


Dennis Nessler
Dennis Nessler is Editor-in-Chief of Hotel Interactive, parent company of Hotel Community Forum. Nessler brings more than 28 years of editorial experience to his position, including some 17 years in the hospitality industry. As part of his duties, Nessler not only covers the industry editorially but moderates various high-level panel sessions at hospitality events and frequently conducts one-on-one interviews with C-level executives.