HVS Report - Impact of COVID-19 on Los Angeles & Southern California Hotel Markets - By Luigi Major

Since December 2019, outbreaks of coronavirus (COVID-19) have led to global economic disruptions as cities and countries attempt to slow the spread of the disease by implementing lockdowns and social distancing measures. At the time of publishing this article, the number of cases in the United States and California exceeded 680,000 and 28,000, respectively.

Beginning in early March, prominent events in Southern California, similar to many regions around the world, were canceled or postponed. Major attractions such as Disneyland, Universal Studios, Knotts Berry Farm, Six Flags Magic Mountain, the Santa Monica Pier, Big Bear Resort, and Mammoth Mountain also quickly closed in response to the pandemic. On March 19, 2020, California became the first state in the country to issue a statewide “Stay at Home” order and, since that time, economic activity has ground to a halt; the order remains in place until at least May 15

As can be imagined, the hospitality industry in the region, as with the rest of the country, is now reeling from the unprecedented drop in demand caused by these measures, which have resulted in substantially lower occupancies and average rates. For the combined L.A., Anaheim/Santa Ana, and San Diego lodging markets, RevPAR grew 3.2% in 2018, and then increased by only 0.3% in 2019; this weak performance was due primarily to the supply increase in 2019. Demand growth resumed in early 2020; up until the end of February 2020, hospitality markets in Southern California were on track to once again break records, reporting slightly higher RevPAR levels than those achieved during the same period of 2019.

However, in the span of four weeks in March, the industry took a nosedive as travel came to a halt. As of mid-April, absolute occupancies in most markets were reported in the 15% to 25% range, with ADR levels dropping on average 40% to 45%. Ultimately, this resulted in a RevPAR decrease of 80% to 90% for most markets in the region (to an absolute level of approximately $20). The following chart illustrates weekly RevPAR performance thus far in 2020 compared to 2019 (on a running 28-day basis) for the aforementioned Southern California markets combined.

HVS Hotel Transaction Activity: The Factors Influencing a Return to Normalcy in a Post-COVID-19 Time - By Drew Noecker

The year-over-year individual property transaction volume in Q1 2020 was down 61.4% from the same period in 2019, as COVID-19 became a major concern in the second half of the quarter; thus, this portends a large drop in Q2 2020 with a full impact of COVID-19 disruption. With our industry’s already-realized transaction volume drop and the continuation of this trend, we wanted to look at a few conditions that we believe will need to be present for a return to a robust hotel transaction market. Selected Important Factors for a Consistent, Stable Market After COVID-19 Cases Wane

• Availability of Traditional, Stabilized Financing
  There are multiple transitional, or bridge, lenders with which HVS is currently working. However, to return to a healthy market, the CMBS market, SBA lenders, and traditional balance-sheet lenders need to return to lending. 

• Understanding of the Volatile Environment by the Lending Community
  HVS is working with many companies who have “paused” hotel lending until a clearer RevPAR trajectory emerges. When lenders feel comfortable with a specific uptrend, the traditional debt market will reopen.

• Return of Broader Commercial Real Estate Investors to the Hotel Market
  One of the significant drivers of the growth in hotel transactions over the last 8+ years was the entry of traditional real estate private equity firms into the hotel ownership space. Those firms are currently concerned about the occupancy volatility of hotels during this health issue, but once the broader real estate private equity firms are again comfortable, the transaction market will improve.

• Solidification of the Concessions Available from Franchisors 
  Major franchise companies such as Marriott, Hilton, Hyatt, Choice, and IHG have discussed possible concessions for their franchisees. Once these concessions regarding fees and renovations are understood, owners can safely bid on available assets and return the market to a healthier state.

April 14, 2020 – Updated Transaction Data

Coronavirus lockdown: Hilton partners with Zomato, Swiggy for food deliveries

Hilton, a leading global hospitality company, has partnered with top food aggregators Zomato and Swiggy for home delivery of its signature dishes to customers, following a safe and contactless delivery practice. Currently, six Hilton properties are operational for food delivery via Zomato and Swiggy including Conrad Bangalore, Conrad Pune, Hilton Garden Inn Gurgaon, Hilton Chennai, DoubleTree Ahmedabad, and Hilton Mumbai.

Hotel's select delivery menu across cities features the top 20 signature dishes from the most popular F&B outlets of Hilton Hotels in those cities, at special delivery prices. Hilton claims to have always followed stringent hygiene protocols, and due to the outbreak of COVID-19, is taking all necessary precautions to ensure utmost safety in the delivery of food to its customers

Hilton will also be offering a curated delivery service for private parties and gatherings. Deliveries under this service will be done by Hilton's staff using company-owned vehicles

How Each Hotel Department Can Start Preparing for A “New Normal” Re-opening

By the way, this list is based on the scientific process of baseless, wild speculation, while waiting out the quarantine.

F&B and Restaurant

• Re-draw your floor plan so that there is a minimum of 6 feet between tables.

• Research which food costs will increase when you order less volume.

• Move kitchen stations (if at all possible) to create more space.

• Create a re-opening menu with items that limit the number of cooks in the kitchen

Front Office/Reservations

·         In expectation of occupancy restrictions, add “Covid19 Out-of-Order” designation in your PMS system. These rooms will be tracked differently than regular OOO rooms.

·         Decide which rooms you will take out-of-order to ensure social distancing and limit elevator use.

·         You may have to read the temperature of all guests when they check-in so decide on whether that will happen at the front door or front desk. You may want to start writing an SOP for this.

·         Start talking to your GM about the possibility of requiring a Covid19 affidavit to be signed at the front desk where guests confirm that they have not been close to anyone with virus symptoms.

·         Start crafting a Covid disclosure for Phone Reservations to read to each guest and to post on the website (with an electronic “Agree” button).

·         If your credit card scanner does not accept contactless cards, get one that does.

Finance/Revenue Management

·         Add a new line for “Covid19 Out-of-Order” rooms to your Pace, Forecast, and Yield reports. This will allow you to better compare Year-over-Year results this year and next year. If you bundle all the OOOs together you will affect the variances.

·         If there are occupancy limitations, you may be sold-out or close-to-sold-out every night, so you have to find alternative metrics to track the strength of the market. Try putting together data from your POS or CRM to track KPIs like average guest spend for all outlets year-over-year

Marketing/Sales

• Compile “Best Guests” list from your CRM to send personalized messages. A simple email blast will be lost in everyone else’s email blast.

• Redraw your meeting space floor plans for social distancing requirements. Load the new floor plans to your website.

• Divide your Sales contact list by group size. Large groups may not be able to commit to events for a while because of logistics, but small groups are very manageable.

Hotels and restaurants will open in 10 districts of Kerala

Hotels and restaurants will open in 10 districts of Kerala on Monday after nearly a month of lockdown as the coastal state prepared to get its economy back on track after successfully controlling the spread of Covid-19.

Out of Kerala’s 14 districts, four -- north Kerala’s Kasaragod, Kannur, Kozhikode and Malappuram -- are in the red zone with the bulk of infections. Eight, including state capital Thiruvananthapuram, are in the orange zone with few cases and two are in the green zone with no cases. The relaxations will be applicable to the orange and green zones only, said state authorities.

From Monday, restaurants and hotels in these two zones will remain open until 7pm and some private vehicles allowed on the streets but no overcrowding will be permitted.

Booking.com plans for lay offs after landing $4bn loan

Online travel agent Booking.com has told employees in an internal memo that layoffs from the company are "probable", just days after the Financial Times reported it had received a $4 billion loan in bonds from investors to fend off severe effects caused by the coronavirus crisis.

In a video conference held with hundreds of employees, Booking.com chief executive Glenn Fogel is believed to have said cost-cutting would likely be necessary across different parts of the company, according to the Financial Times' report.

One of Booking.com's key competitors, Expedia Group, has already been forced to make 3000 employees redundant  since the turn of the year as reality bites.

Booking.com is committing to slash marketing expenditure, executive salaries and hirings for the foreseeable future, as a major cost-cutting exercise and bookings continue to drop to 85 per cent year-on-year in April compared to the same period in 2019.

Importance of E-Learning in this current situation by Rahul Chowdhury, Assistant Professor, Hospitality & Tourism Administration at Sister Nivedita University

We are now entering a new era — the revolution of online education.

It is often referred to as e-learning. Online learning is seen as an innovative concept which is attracting the attention of academic institutions as well as companies in different sectors.

There is also increased use of virtual classrooms (online presentations delivered live) as an online learning platform and classroom for a diverse set of education providers. Being physically present in a classroom isn’t the only learning option anymore.

Everyone can access online education no matter whatever is the location. Although it is one type of distance learning I believe as the current situation is extremely threatening & challenging for all of us, so it’s better to have something than nothing. Education & learning is an unstoppable concept, no matter whatever is the situation. Currently, I am working as an Assistant Professor in the Department of Hospitality & Tourism Administration at Sister Nivedita University (Techno India Group-West Bengal, Kolkata).

The online sessions are happening on a regular basis with participation from students & faculty members are 100 per cent. My area of specialization is Food & Beverage Operations & Management. I believe that virtual learning is an excellent platform to share knowledge even when you are working from home. Although, in this present situation when the entire world is undergoing such a severe crisis, but I believe, that it can’t stop education & learning.

So under the guidance & full support from my director Mr Sandip Mukherjee & Head Dr. Santanu Dasgupta (both from the hospitality department), I am sharing my experiences, knowledge & skills with my students via online mode. Recently I have attended a few webinar sessions where the majority of academic leaders from all over the world believes that online learning quality is already equal to or superior to face-to-face instruction.

I believe that the process of learning & teaching has improved with the use of technology. In this moment flexibility, & adaptable to change with the situation must be the prime key. As an educator, we all must spread knowledge, as education is the passport to the future. I call it a “Commitment to student education”.

OYO Accused Of Listing Treebo Hotels Without Clearances

Gurugram-based hospitality unicorn OYO has found itself in a fresh battle against its competitor, Treebo. The company’s executive allegedly submitted “invalid” no-objection certificates from about 70 hotels to the OTA Booking.com .This was reportedly done to change the ownership listing of the properties to OYO from rival Treebo.

To begin with, when hospitality chains like OYO and Treebo list a hotel, they receive permissions from these hotels to promote the hotels on their websites as well as other OTAs like MakeMyTrip, Yatra, Booking.com etc.

The OTA said that after making necessary checks it had identified that the NOCs provided by OYO for these properties were “invalid”.

Booking.com reportedly said that it required accommodation partners to abide by all applicable laws and compliances. “There is a standard process that we follow at Booking.com for listing properties and the same process is being followed right now as well,” the company said.

OYO did not respond to Inc42’s queries on the matter till the time of publication.

The development comes at a time when the travel and hospitality industry has been severely hit by the Covid-19 pandemic and quarantines. OYO had recently told its employees that since the outbreak, OYO’s occupancy rate and revenues have dropped by more than 50 to 60% and the company’s balance sheet has come under severe stress.

The Fern Hotels & Resorts supports the needy amid coronavirus crisis; announces no paycuts for employees

Be it providing food to the needy during these times of national crisis or ensuring there will be no pay cuts across its 72 hotels, The Fern Hotels & Resorts, India's leading environmentally sensitive hotel chain is trying to spread the message of being sensitive.

The CEO of the company, Suhail Kannampilly said,” We as a company are doing our bit to contribute during this time of crisis. Quite a few hotels are offering food to the needy in Mumbai and other parts of the country.”

He assured his employees that the company will not be reducing any salaries. “The Labour ministry's advice on not reducing any salaries is clear and we as a company want to show our commitment in resolving this crisis.

At this point we are compelled to take some actions. So rather than salary cuts or unpaid leave we will work towards a salary deferment, where by each hotel pays based on their available cash flow, a base amount for substance and then when the situation reverts to normal the balance is paid out in tranches “, he said.

The CEO also exhorted his team members not to lose touch with the guest and used this opportunity to re-analyse the business.  Run through P&L / trial balance with a fine-tooth comb and evaluate as to how we can make this a healthier and more profitable business once the situation normalizes

Here’s how Royal Orchid & Regenta Hotels are doing their bit to alleviate community distress amid COVID19 crisis

Royal Orchid & Regenta Hotels, through their 60+ hotels across India, have undertaken a noble initiative to provide food and comfort to the needy amidst the lockdown.  The group has been distributing food packets to the migrants and underprivileged through their hotels in Bangalore, Gujarat, Madhya Pradesh, Navi Mumbai, Goa, Mysore, and Rajasthan.

As a part of the initiative, the Regenta Resort in Pushkar (Rajasthan) has adopted a village named Bhagwanpura which is home to 300 people. The resort is regularly supplying meals and groceries to the locals.  Likewise, in Gujarat, the hotel has distributed food packets to 200 people in Bharuch, 600 in Rajkot and 900 people in Vadodara respectively. 

Besides, food packets were provided to more than 2500 migrant workers during last week’s mass migration through their hotels located in Jaipur and Madhya Pradesh’s Pench National Park. In Bangalore, the hotel has continued with its ongoing initiatives through its flagship property - Hotel Royal Orchid and Regenta Place.

Billionaire Royal Caribbean Co-Founder Dies

Norwegian billionaire businessman Arne Wilhelmsen, the co-founder of Royal Caribbean Cruises, died Saturday, April 11, 2020, in Palma, Spain.

Wilhelmsen was a constant influence on the company from its founding, serving more than three decades on the company's board of directors. Together with the company's first CEO, the late Edwin Stephan, Wilhelmsen saw possibilities for the nascent cruise industry that others did not.

"At a time when the rest of the world thought cruising was a niche use for old transatlantic liners, Arne was already seeing glimmers of the growth that was possible," said Richard Fain, RCL's chairman and CEO. "He had a vision of the modern cruise industry when the 'industry' might have been a dozen used ships, total."

Wilhelmsen saw the potential for cruising to become the fastest growing segment in a growing vacation industry.  A believer in economies of scale, he once recalled, "My initial challenge was to convince my partners and management in Miami to build bigger and more efficient ships in order to grow the company."  True to his vision, the company now sails 61 ships calling on all seven continents and its fleet features the largest cruise ships in the world.

Youth walks over 1600 km to reach Kashi from Mumbai

Ashok Keshari works at a hotel in Nagpada area of Mumbai. With his hotel shut in view of lockdown due to coronavirus pandemic, he decided to head towards his home in Varanasi on March 30.He walked over 1600 km for almost 14 days to reach Varanasi from Mumbai on Sunday night.

“I walked along the rail tracks on roads and remained hungry for most of the time. On way, some generous people gave food that helped me survive,” said Ashok, who reached Cantt station, Varanasi

He then walked to district hospital where doctors cleared him of coronavirus symptoms and he said the doctors advised him to stay in home quarantine for 14 days as a precaution.

A resident of Saptsagar Dawa Mandi area in Varanasi, he was, however, allowed entry into his house after he underwent screening at the government hospital and was found asymptomatic for coronavirus.

Upcoming Live Webinars - Restaurant Industry in NYC and Travel Industry’s Road to Recovery

What's Next for NYC Restaurants

 COVID-19 and social distancing have completely changed the way restaurants and bars can do business. Because foodservice is considered an essential service, operators can choose to remain open if they limit their sales to takeout and delivery only.

While this “new normal” will work for some operators, others will be forced to shut down. Neither choice is ideal in this new, ever-changing, and volatile business environment, and owners, operators, and their suppliers are being forced to make difficult decisions every day to protect their businesses, assets, employees, and guests.

The Travel Industry’s Road to Recovery

 COVID-19 presents a challenge of historic proportions for the travel industry. The measures put in place to stop the spread of the pandemic – border closures, stay-at-home orders, and quarantines – have brought travel to a standstill, and no one can say when these policies will be eased or if additional measures will be implemented.

This panel of travel industry experts will discuss the current market dynamics and different recovery scenarios.

Maestro PMS Recognizes Hoteliers That Stand Up to CV-19. Community Donations Cover Over 1000 Room Nights for Health Care Heroes

These are unprecedented times for our industry. Operators are facing business challenges beyond their control. Nevertheless, many operators and hotel companies are putting the true meaning of ‘hospitality’ into action. Hundreds of operators with dozens of brands are making their properties and facilities available for use by medical personnel and first responders. 

Maestro’s team is proud to be associated with many of these hoteliers who are giving back to their communities by opening their doors during this difficult time.

The Silver Hotel Group, a family owned company, is offering a safe and comfortable place to rest for front line medical staff and first responders

Accent Inns opened its doors to offer rooms at cost for front-line essential service workers, “We considered closing our doors because our reservations office was only taking cancellations and clearly travel was drying up,” said Trina Notman, VP of Marketing & Communications at Accent Inns

“Then, a nurse who was desperate for a place for her colleagues to self-isolate called us for help because some of her colleagues had taken to sleeping in their cars to avoid risking passing the virus on to their families

To date we have sold over 1,000 room nights covered by community donations through this program. It is tremendous to be able to tell these workers that their stay is covered.”

AHLA's Hospitality for Hope Initiative that was created to boost collaboration between the hotel industry and local, state and federal governments to help employees, communities, and the industry during this unprecedented health crisis. AHLA recently announced a partnership with its partner state associations to support communities across the country by connecting hotels with the health community to find housing and support for medical staff and first responders. Over 16,000 hotels have signed up for AHLA's Hospitality for Hope Initiative.

MMGY Global COVID-19 Travel Insight Report - April 13th

Based on data from Wave III of our DMO Industry Barometer conducted with the Destinations International Foundation, it appears organizations could be turning from reactive crisis communications to proactive planning for a travel rebound. What will be key in developing road maps to recovery will be a balance between short-term tactics and long-term strategy.

1. There is plenty of data to suggest that immediate bookings will be driven by more local travel and drive market trips.

2. However, long-term strategies should not be forgotten - especially for long-haul markets where booking windows have the potential to lengthen based on safety sentiment.

3. It will be important to sift between short-term trends and macro shifts in consumer behavior that will define the "next normal.

Tips for Executing a Successful Takeout Program

With the industry rapidly shifting, operators across all segments are innovating new ways to serve customers by expanding their delivery and takeout services. Restaurants are aligning with state-issued orders by increasing takeaway offerings, including family style meals and curbside pick-up options. Many are even providing free, no contact delivery or offering senior-only hours to ensure the safety of their customers.

The increased delivery and takeout demand has presented new challenges for operators who want to keep food quality high and wait times low. With a full system in place, operators can maximize profits, while also ensuring the highest food quality for their customers.

Cook Food the Way It’s Intended

Vector® Multi-Cook Ovens feature up to four ovens in one with independent temperature, fan speed and cook time controls. Without flavor transfer between chambers, this allows operators to meet customer demands with an unmatched volume and variety of food at the highest quality. Exclusive Structured Air Technology® delivers optimized, focused heat that results in faster, more even and consistent cooking—two times faster than conventional technology.

Maintain Food Temperatures with Radiant Heat

Heated holding cabinets with Halo Heat® technology distribute heat evenly and hold food to a consistent temperature without degrading food quality. With gentle, radiant heat that surrounds the food, these cabinets will ensure that it is hot and ready for pick up no matter when the customer arrives.

Holding cabinets are energy efficient and easy to install with no water required—saving money, time and energy, while satisfying customers and reducing food waste

Six Taj hotel staff test positive

At least six staff members of the Taj group of hotels in Mumbai have been hospitalised after testing positive for COVID-19. The Taj Mahal Palace, The President, Taj Lands End, Taj Santacruz and Ginger Andheri have offered their premises to the medical fraternity and health workers.

The Taj staff were admitted to Bombay Hospital and are reported to be stable. Dr. Gautam Bhansali, consultant physician at the hospital, said they had very mild symptoms.

Approximately 500 of our employees who are at work in our Mumbai hotels have been tested. Those who have tested positive mostly were asymptomatic, showing absolutely no signs of illness. However, staff testing positive and symptomatic were duly hospitalized and others who were in contact with them have immediately been put in quarantine in accordance with World Health Organization (WHO) norms and guidelines issued by the local Government authorities

South Mumbai’s Taj Mahal Palace does not have any guests and is working with minimum staff in areas like housekeeping, security, maintenance and staff dining to ensure the upkeep and maintenance of the hotel.

IHCL has been supporting the Government with various humanitarian initiatives by offering its hotels to the medical fraternity, health workers, supporting certain States with quarantine facilities and also providing almost 4 lakh meals till date to doctors, health workers and migrant workers

Exclusive: MakeMyTrip Gets INR 73.5 Cr From Mauritius Entity As Virus Pinches OTAs

In the wake of the ongoing slowdown in the aviation and tourism industry, Gurugram-headquartered online travel company MakeMyTrip has raised INR 73.5 Cr in two tranches from Mauritius-based entity — MakeMyTrip Limited.

According to the ministry of corporate affairs (MCA) filings accessed by Inc42, MMT has raised INR 37 Cr on March 16 while the parent company infused INR 36.5 Cr on March 9

MakeMyTrip issued 21,81,461 shares to the company at INR 340 per share with a nominal price of INR 10.

MakeMyTrip had reported an adjusted operating loss of $11.2 Mn in Q3 2020, down from $19.3 Mn in the previous quarter in the same fiscal. Meanwhile, the company’s revenue increased to $146.9 Mn, from $118 Mn in the previous quarter.

For MakeMyTrip, the impact is quite visible from the downfall of the share prices. From $29.95 on February 12, MakeMyTrip‘s share price declined to $10.8 on March 18. The situation is quite similar for MakeMyTrip competitor Yatra as well. Yatra’s share price fell from $3.79 on February 14 to $0.91 on March 18.

MakeMyTrip’s Revival Plan

To start with, MakeMyTrip’s Kalra and CEO Rajesh Magow shared a revival plan with the company’s employees. Some of the measures include reducing variable costs such as advertising, sales promotions and payment gateway costs, along with optimising IT infrastructure and expenses relating to the functioning of our offices and other establishments.

Travel Agency Flight Centre to Shutter 800 Storefronts as Part of $1.2 Billion Savings Effort

Flight Centre Travel Group plans to close 800 retail stores, among other measures, in a bid to slash costs over the coming months. Some 40 percent of those closures involve agencies based in Australia.

The latest crisis plan follows a staff reduction of 6,000, including redundancies, out of its workforce of 20,000.

Among other measures taken, it has put a hold on all “non-essential capital expenditure”, which it said will lead to monthly operating savings of $40 million per month.

It could sell its Melbourne head office, valued at $37 million.

The group has also frozen sales and marketing activities, with the latter saving it nearly $11 million per month.

All of these operational cutbacks will incur a one-off cost of $127 million.

Liquidity boost

Flight Centre will also lean heavily on its banks, seeking $120 million of new commitments negotiations.

The update to the Australian Securities Exchange also noted that despite the crisis, last month it won new corporate travel accounts with annualized spend of $150 million.

US State Department Halts Passport Issuing Amid Coronavirus Pandemic

The U.S. Department of State has ceased issuing passports except for “life-or-death emergencies” while coronavirus continues to spread throughout the country.

The new directive, which went into effect in March, was implemented “due to public health measures to limit the spread of COVID-19,”

 The State Department will make an exception for “immediate international travel within 72 hours” in life-or-death situations, including serious illnesses, injuries, or deaths in the immediate family. In that case, applicants would need their full application, proof of the emergency like a signed letter from a hospital or a death certificate (translated into English) and proof of their itinerary or ticket.

To make one of these appointments, applicants need to call the National Passport Information Center at (877) 487-2778 or call (202) 647-4000 outside of business hours.

The State Department said it would continue to fulfill requests for people who had applied for an expedited passport anytime before March 20.

It is not immediately clear when the State Department would start taking applications again.

The new policy also comes as the deadline for Real ID driver’s licenses and ID cards was postponed as the application requires an in-person visit to the DMV.