Advice for Hotel Owners in this difficult time.

The Coronavirus has had a devastating impact on businesses, and hotels are no exception. According to the American Hotel and Lodging Association, up to four (4) million hotel employees have been laid off, or will soon be let go or fired, and even more are at risk of losing their jobs soon. However, there are ways to make sure that your hotel won’t become another statistic. The following steps can help you minimize the impact that the Coronavirus may have on your hotel.

Be Proactive

Hotels have a lot of moving parts, such that suppliers, vendors, and employees, are critical to their livelihood. As a result, you should reach out to them so that you can understand their circumstances, and make sure that you do not need to find replacements. You should also revise your business plan to prepare for uncertainty and be prepared to engage in communication with your lender, if applicable.

Assess the Cost Per Night of Hotel Rooms

A hotel’s profitability is based on the revenue generated by occupied hotel rooms less the cost to maintain a hotel room, and common areas.  Diminished occupancy rates, and social distancing requirements, caused by Coronavirus imposed restrictions creates a greater need to maximize profit margins with respect to hotel rooms. As a result, it is important to assess each and every cost associated with maintaining each hotel room, even down to each roll of toilet paper, and determine where you can, without sacrificing quality, cut costs associated with the use of a hotel room.

Generate Revenue

If your hotel is not able to generate sufficient revenue to cover costs, such as your mortgage and utilities, you can generate revenue through federal, state, and local government partnerships, such as the Emergency Lodging Assistance Program or AHLA Hospitality for Hope Initiative where rooms will be rented, at a significantly discounted rate by municipalities, to provide lodging for homeless people, emergency medical staff, first responders, and other qualified individuals. While participating in these programs can help you meet your obligations and give you an opportunity to train your staff in additional sanitation procedures, you may have to close your hotel to the public at large if you participate in such programs.

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