As hotels around the world gradually reopen following closures brought about by the COVID-19 crisis, they face the daunting challenge of balancing the need to bring guests back with the importance of keeping them safe and healthy. Hotels that reopen typically must adhere to strict guidelines around social distancing, cleanliness and sanitation, and reduced capacity across rooms and outlets. At the same time, competition among hotels for the returning business threatens to put downward pressure on rates. All of this translates into increased costs, thinner margins, and a slew of other financial and operational risks.
Is there silver lining to be found? Hotels may certainly struggle to identify areas of opportunity but there are ways – as we detail below.
Let’s focus on the general topic of capacity and try to understand the impact of operating at less than 100% of physical capacity. A number of potential factors may influence this:
1. Social distancing restrictions that mandate a hotel must leave a certain number of rooms empty; this may even be based on the physical location of the rooms, e.g. occupying every other room on a floor rather than closing entire floors
2. Alignment with restrictions on other on-property offerings – for instance, if restaurants or a casino floor are only permitted to be half-full, a hotel may not want to create a situation in which it can’t accommodate hotel guests, or else detract from the guest experience
3. Staffing levels for housekeepers that might result in closing a certain number of floors completely – likely an economic decision based on when marginal revenues no longer cover the cost of turning a room
4. Hotels that are instituting the safety requirement of waiting 24-72 hours (typically) until a housekeeper may enter a room to clean it