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 a 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.