09 Jun WHERE TO FROM HERE FOR HOSPITALITY?
After 10 years of recovery and record growth from the 2008/9 Financial Crisis, the U.S. hotel industry is currently faced with a harsh new reality – occupancies are projected to decrease by 35% to 45% while ADR is projected to decrease by 23% due to the impact from COVID-19. Travel and tourism are on pause, causing temporary closures for 20% of all hotels along with more than 7 million employees furloughed or laid off.
Arcturus is actively working with hotel clients and operators, as well as lenders across the capital stack to help dimension problems, identify risks and think through strategies to help reduce the impact of these unprecedented pressures.
KEY HOSPITALITY ISSUES TO CONSIDER
Hotel ownership issues include:
- Investor & lender communication (rescue capital, forbearance, using other reserves for debt service)
- Business plan evaluation / reforecasting (operating expenses i.e. cleaning)
- Capital needs assessment (PIP extensions / Repurposing)
- Brand / flag management
- Reporting requirements
- Municipality real estate taxes
- Business interruption claims
- Possible loan defaults
- Acquisition / Dispositions (contract review)
Hotel operational issues include:
- Restarting (Staffing, equipment/room inspections, capital needs, budget, marketing)
- Staff retraining
- Increased cleaning / sanitizing
- Room turnover and housekeeping
- Touch-free check in & check out process
- Common area amenities (capacity level and best use)
- F&B options
- HVAC and airflow
- Premises security / access’
- Employee and union contract issues
Arcturus understands the critical issues facing hotel owners/operators caused by today’s unique environment. We have deep experience in helping clients review current property operations and communication procedures, implementing new standards where prudent, identifying contingency plans, ensuring critical supplies are on hand and having available staffing and communication protocols in place.
Please contact Arcturus so we can help you maximize your ability to weather the storm during this challenging time and position you for future success.Email Us