This was the week that IHIF wasn’t and one can only hope that none of you had shares in Starbucks and Lucozade because a hit like that is bound to have repercussions. Onwards to May, when the weather should be warmer and the chance for outside drinking higher, so the liver damage has not so much been written off as postponed. You may wish to start limbering up now.
COVID-19 was the story of the week around the world as the efforts to contain it in China were found to have been less effective than hoped and it is now present in a significant number of countries and most of the mature hotel markets. Markets, STR pointed out this week, which were already suffering from oversupply.
Worth noting, one feels, that the slump after 9/11 was what allowed the OTAs in through the door and hotels were asked not to panic this time around and, the data showed, they haven’t. While occupancy was falling fast enough to make a distinctive screech, rates were bearing up. The issue so far was not government travel bans, but corporate ones.
How times have changed. You can put an Investor In People plaque up in your lobby as much as you like, most employees still feel that their bosses would cheerfully run them down to avoid getting mud on their Bugatti Veyron. It turns out that the workforce is now viewed as better off alive and kicking. This can only bode well for the future of business, even though the cynics amongst you are muttering that bosses are only serving themselves and their health. For heaven’s sake, the truly successful boss has no need to keep their employees well - they would surely have a private island to self isolate on and damn the wage-earning grunts.
Away from management books of the future, the sector was thinking hard about saving money and very sensible too at a time like this. Radisson and Whitbread were both viewing expansion for their budget brands, with mainland Europe likely to see some skirmisches for supremacy in the coming year. Both like a lease and both have convincing distribution platforms: Radisson globally thanks to its owners and Premier Inn with direct booking at over 90% thanks to its brand recognition. With Accor still dominant in the region, expect some elbow prodding and general roughhousing.
Also hovering at the advantageously-priced end of things were hostels, which were described as more dynamic and adaptable than hotels and thus likely to stay relevant for longer and keep hold of the customer, from backpacking to corporate travelling. People like them because they’re cheap, but also because they come preloaded with experience. Investors like them because you can fit a lot of heads in and they can be jimmied into the most unlikely city-centre sites where hotels cannot go.
Investment remained one area where there have been no troubled faces as a result of the coronavirus outbreak and the transactions market remained steady, reported Park Hotels & Resorts. The Reit was thinking of going shopping for some bargains in New York and was likely to return successful as the market had been weakening pre-virus. In some quarters at least, business as usual.