Hotel Trends: Reducing Costs and Contact in Rooms, Staff and F&B

The first week of June kicked off with a general HFTP Hangout that covered hotel market trends and trajectories, presented by CBRE Hotels Advisory representatives Mark Van Stekelenburg, Andy Hartley and Vanessa Gonzalez. CBRE presented a wealth of industry data using a spectrum of various economic data points that was illustrated in their presentation, which is now accessible on the HFTP website.

The Long-lasting Effects of Covid-19 on the Hotel Industry:
Fixed and variable components of operations, outsourced services and technology to drive demand

A key part of the discussion hosted by CBRE Research on hotel market trends and trajectories focused on what goes into the fixed and variable components of cost across different time periods: pre-COVID, short-term and potential post-COVID costs. Overall, the fixed components of every line item have had to be re-written. The presentation included a detailed overview of the various costs by department:

Rooms

Hotels are re-opening with minimal management and staff. You may see the general manager conducting check-ins or even the owner cleaning rooms. A major trend with housekeeping has been to outsource the labor and pay per room; this is a trend that could potentially continue in a post-COVID world. There is a large chance in select service and some full-service hotels (sans meeting space) where they might try to reconfigure their rooms department to model this trend of outsourcing housekeeping labor.

Food & Beverage

If the F&B department has been open during the social restrictions, guests have mostly been looking at to-go items or a pre-packaged meal, and there is typically just one person in the kitchen. In some instances, there has been contactless room service available. Going forward, especially in select service or smaller full-service hotels, properties will work to streamline their entire F&B department. There is a good chance you will see more grab-and-go food options. There is one fundamental problem with outsourcing F&B – and that is a sacrifice in service. Therefore, hotels are evaluating their options on how to ensure service standards when providing outsourced F&B.

Administrative & General

This is another department that has been and will continue to be streamlined, from support staff to C-level executives. Where before a property may have employed a general manager (GM), assistant general manager (AGM), support staff, and a controller/director of finance (DOF), you might now see just a GM and controller/DOF – with the GM acting as a “jack of all trades.” This is especially true for smaller properties.

Technology

It is very apparent that technology will change to help properties with a changing guest experience. Especially in the rooms department, and generally throughout the entire facility, high touchpoints will be limited throughout the building. Society can expect moderate social distancing for the short/long-term future; this could potentially last up to five years.

Most of the technology is already there; we have seen gateway city and higher-end hotels that have already adopted and introduced voice- or mobile-assisted room controls and mobile check-in processes.

Hotel Occupancy, RevPAR and forecasting trends and trajectories

CBRE provided a national market update for the hotel market that concluded:

  • We are generally past the peak in new infections.
  • There is a reduction in the rate of new case numbers as we move to re-opening.
  • U.S. occupancy levels are slowly rising.

See these conclusions illustrated in the CBRE data presentation.

About HFTP Hangouts

HFTP Hangouts continue through the month of June. Visit the HFTP website to view the schedule of upcoming Hangouts and sign up to attend today.

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About the Author: Briana Gilmore

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