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How COVID-19 Changed Hotel Franchises
The COVID-19 pandemic altered the hospitality industry, and whilst the response from hotel brands varied, it mostly went along the lines of pause, reduce, and postpone.
Now, as the world reopens and goes “back to normal”, hotels and brands are dealing with the question: What now? How have brand standards changed? How will they continue to change, if at all? What is the expectation from brands over the coming years?
Initial Response
One of the main concerns from hoteliers during the initial shutdown and restrictions was: “how do we cut spending to balance the lack of revenue we’re bringing in?”. The general strategy was to lighten or delay fees for franchisees and reduce staff. Many brands implemented executive pay cuts of either a portion or all of the top executive salaries. Most importantly, brands offered fee deferrals for guest relations fees, reputation management fees, revenue management fees, and in some cases marketing fees. Brand standards were also deferred, including regularly scheduled renovations, new projects, and quality assurance inspections. Brands also advised owners on public and recreational area protocols, food and beverage options, and managing reservations and cancellations in a flexible way.
Property Requirements
Red Lion Hotels has changed their requirements for the foreseeable future. They have relaxed standards for owners of new-build properties. Rather than requiring 90% of rooms to be guest-ready, the brand is allowing them to open with a much smaller percentage. Public areas that are not in use right now such as pools and ballrooms also don’t have to be fully functional because they won’t be in use for some time still.
Delayed Deadlines
RLH is working with owners to find solutions that work for them, for example allowing them to delay renovations for a year. Choice Hotels is deferring capital-intensive deadlines like renovations and new initiatives while revenue is low. Wyndham has extended their fee and PIP deferral options as well.
Housekeeping
Beyond fee and renovation delays, many brands have altered housekeeping, maybe permanently, so that guests can choose if they want daily cleaning, every 2-3 days, or not at all during their stay. Some brands are even saying to guests that they won’t be cleaning the room during their stay in order to cut down on cleaning expenses and possible exposure.
Amenities
In-room amenities have also been reduced for most brands, which saves money and reduces waste because all non-sanitizable items have to be thrown away after each stay. For example, coffee machines, pens, and paper have been removed from most rooms for now. Buffets, of course, were immediately shut down but most brands have implemented an alternative ‘grab-and-go’ style breakfast option. Extended Stay America has halted their ‘grab-and-go’ coffee program for the time being, but many brands are still using this model. Choice Hotels are serving pre-packaged breakfast for now but they’re working on something better and easier for franchisees. Of course, some brand standards have increased when it comes to health, safety, and sanitation.
COVID Standards
The American Hotel and Lodging Association (AHLA) quickly responded to the COVID-19 crisis by developing a list of cleaning and safety standards for all hotels to refer to, or “Safe Stay”. This covers things such as:
- Hand sanitizer dispenser requirements
- Enhanced signage, cleaning, reporting, and training protocols
- Approved cleaning materials and processes
- Foodservice changes, including no-contact room service and buffet amendments
- Social distancing and public area modifications, including meeting and convention spaces
- Encouraging the use of technology to reduce direct contact with guests, the lobby population, and the front-desk queue
Some brands have added their own COVID protocols such as ‘grab-and-go’ food or specialized name tags that include a photo of the employee without a mask on in order to improve customer-employee interaction. These standards will no longer be necessary post-COVID, but the level of sanitation will likely be higher than it was before COVID-19 for the foreseeable future, especially when considering changing guest expectations.
The Future… and What About My Renovation?
So what happens when things go back to the way they were? Are PIPs being reinstated? And to what extent are they reinforced?
There is still a level of flexibility expected, as timelines are extended. Health and safety conditions will continue to change, but following government and industry guidance will ensure a hotel is showing its guests that they are committed to a safe environment for all.
Resources:
- https://www.costar.com/article/613071812
- https://hospitalitytech.com/hotel-brands-take-drastic-immediate-steps-curb-spending-preserve-liquidity
- https://www.bizjournals.com/washington/news/2020/04/09/choice-hotels-suspends-some-fees-and-defers-others.html
- https://www.hotelbusiness.com/hotel-companies-implement-changes-to-reduce-covid-19-impact/
- https://www.costar.com/article/219414173/hotel-brands-show-flexibility-in-whats-required-for-new-builds-conversions
- https://www.costar.com/article/38188603/how-hotel-brands-defer-adjust-standards-to-aid-franchisees
- https://www.businesstravelnews.com/Lodging/AHLA-Introduces-Safe-Stay-Hotel-Cleaning-and-Safety-Standards
- https://thepointsguy.com/guide/hotel-cleanliness-after-coronavirus/
