How Hospitality Will Emerge from the Pandemic

By Jose Pinto *

During pandemic times and sifting through the winners and losers during it, I found that when a family that partially owns its company, that company tends to do better. What were or even are the reasons? A family tends to look after “its “investment better, i.e. they keep their management team on a shorter leash and on its “toes” as customary said.

A family is most the times agile and can make decisions faster, their portfolio is in most times less diverse making the success or failure of the company all the more critical, and the family has a much deeper “socioemotional attachment” to its business than any management company.

In the European Countries context, families tend to have a long-term, intergenerational vision that is not “100% rational”, i.e. solely based on profit and loss. In particular, small owned companies with a CEO/ Chairman who is a member of the family outperformed better than any other.

Funds and private equity firms do not tend to co invest in small or familyowned

Hospitality properties and instead turn their sights to large, enterprises. As a result, they are shielded from indiscriminate sell-offs by big investors. In short, Hospitality properties or companies owned and operated by a family with an HOTEL expert endured milder liquidity swings and have emerged as relative winners during any pandemic times.

In my opinion how hospitality will emerge from the pandemic?

In my opinion, “Covid-19 becomes a launch pad for reflection for hoteliers and many other businesses. They were asked to review and reconsider their processes, flatten the hierarchy, and enhance cross-cooperation as not seen in most past recent times. They have been seen improving their teams’ agile decisions obliged by the last minute business requests and also to meet regularly to share best practices to enhance on the guest / customer experience, share market trends, novelties, concepts among many others.New models have been and are emerging. They will rule in the near future that “hotels are no longer a place where you only sleep” as still believed by many. The “hotel of the future” needs something more. Hotels and Resorts must become the heart of their communities, offering a new customer experience, innovative and conceptual services that are relevant to the community and attracts tourists and visitors.

One of the unexpected benefits of the pandemic has been flexibility and ability to adapt to business within the country market and community. Along with that we need to URGENTLY open the doors to new employees from outside and new to the hospitality services. The labor shortage is and going to be very critical in the months and years to ahead. Re-engineering the salary and instant and long-term incentives will be crucial for attracting and retaining among trust and “business partnership”. High rotation and turnover on service employee in “front and back of the properties” are in most cases due to factors not associated to salary; therefore each business must conduct its own detection and be ready to accept criticism. Such will open the two ways trust needed to run a steady and profitable business.

As like, trust-building has been critical in hotel/resort and other hospitality in the efforts to bring guest back as the pandemic ends.

Just to reflect why wine knows no crisis! Wine consumption was up during the lockdown period throughout Europe and in Albania with no exception. Producers saw there was a room for “measured optimism”. As they explore their business with wineries and cottages or even rural tourism hotels. The introduction of new wines made out of ancient casts was also an uptrend. Visitor’s consumers and customers, backed by local initiatives, intend to increase their purchases of domestic stay and at same purchase wines, according to my review and interviews with wine producers and connoisseurs the Wine, ago and tourism is a trend that will stay for long. In particular, independent small and medium wine producers with cottage were the biggest winners, not only because of the wine but also due to their new initiatives of promoting their regional culture, traditions, gastronomy along with their home/

regional made wines, liquors and many other products with overnight stays at their cottages. They were very active in social media and in promoting their region and regional products.

Then let’s dig and think deeper. Where do you as an owner will invest your capital, especially now that cash doesn’t bear fruits in an inflationary world? Would you continue investing in a 5-star or Luxury brand? Or will you be considering diversifying your vison towards other “star and brands that can bring you “happiness”, I mean small but diversified international brands that can answer today’s customer expectances and give you also great returns?

If 2022 is the beginning of the recovery then it must also be the time to brand rethinks? There are many questions and visions about it, in my opinion not even the best and famous “ business gurus” can answer at present times why or why not brands underperformed in several markets and private owned have “float” and did well. For a while each property will be facing their different challenges and must be ready for a long term strategic thinking. We had a look into several hotels, DMCS Travel advisors etc and find out that; The Corporate and group Segment won’t be coming back

as “healthy” and in quantities as they were. They have shown indices of being smaller and lastminute while corporate companies are on the videoconferencing. It saves them costs that are not to ignore at present and in the future. Having that in mind, the immediate post-pandemic is still a leisure game. It’s time NOW for you to re-examine your strategies and take a hard look at your plans for the long-term , not forgetting this is not a short term business and that the resumption of international flights and more normalized labor also can take time to re assembled . While not professing to have any magic formula, I put into and for your consideration;

Go back to marketing. During past pandemics, we have re directed our focus towards local and nearby communities market and the opportunities that they can generate to re build business. Have you invested on it? If not it’s still time.

Short-term rentals. More than ever they are now everyone core competitor. Ensure you know what they offer within your regional or local market. Make sure your website delivers similar or other competitive rates and or package. It is a must to load some of your property availability into this new distribution channel either via your International Brand or by your own local distribution channel.

Hopping you has learned how to perform with lean/agile teams. Don’t fall into the past practices. Stay trim and slim. Pay better for skilled multi-functional staff and reward them appropriately. It’s all about Bottom line (net profits

not occupancy or %) Think out of the box as its customary saying, and think TrevPar is (totaloverall NET revenue divided intothe available Rooms for the period). Don’t only be dependent of B+B, get the empty spaces rentabilised by adding variety of service and goods that can enhance your revenues and improve your bottom line. Finally measure your overall performance by GOPPAR (Gross Available profit per Room Available) or if operating only a restaurant and bar measure by available seat. As final note Finding certainty in such uncertain times and seasons is tough to predict or assume what it’s going to happen in days or months. Hotel and Resort Owners and Operators best chance is to be turning their eyes to data, distribution and marketing and keep a close eye on results.

*Founder of JPHOSPITALITY.EU & TRAILBLAZING MAGAZINE