TORONTO — CHIC Digital recently hosted its first President/CEO Roundtable focused on the challenges faced by major players in the industry as we enter the recovery/re-opening stage of the COVID-19 crisis.
The event was moderated by Tyler MacDonald, vice-president, Hotels, Oxford Properties Group, and featured Heather McCrory, CEO, North & Central America, Accor; Don Cleary, president, Marriott Hotels of Canada; and Brian Leon, president, Choice Hotels Canada.
Looking at present challenges, Cleary described the current state of affairs in Canada as being in “low gear.” “We currently have 70 of our 250 hotels closed — that’s about 30 per cent. They have pretty much been at that pace for a well over a month,” he explained. “We went through a period of closing a number of hotels, but it’s been fairly stable. We’ve had a couple of hotels open in the last week, but we don’t have a big rush, at those closed hotels, to re-open.” As he noted, this is because open properties are currently operating at low occupancies and don’t expect a significant uptick in the near future.
For Accor, McCrory indicated, “Our number-1 priority right now is to get our hotels back open. It’s been an almost 90-day period of closing down at record speed and now we’ve actually hit that trough.” She also noted about 30 per cent of the company’s Canadian properties have remained open, but some re-opening may begin in early June — dependent on individual owners and markets.
“Our situation is not a lot different in terms of closures, we peaked at 64 of our 330 hotels being closed; that was about four weeks ago,” shared Leon. “We’re down to about 50 closed hotels right now — about 15 per cent of our system.” Noting Choice Canada’s concentration in secondary and tertiary markets, he added, “We’ve seen a modest uptick in business over the last three to four weeks… we’re focusing on the recovery a little bit right now — certainly more than we were a few weeks ago — trying to shift gears a little bit.”
And, as these companies look to begin the recovery process, safety and customer confidence are top of mind.
“The big [goal] is going to be making sure our guests are comfortable travelling — not just for [Choice], but for our whole industry,” said Leon. “And we think there’s a particular opportunity for branded hotels to claim some ground in the industry as leaders in safety and security,” he adds, pointing to this as a silver lining that could give the hotel industry an edge over home-sharing platforms.
“Obviously the number-1 thing we’re focused on [when preparing to ramp back up] is the safety of our colleagues coming back into the workplace, the safety of our guests and what that looks like [in terms of] comfort level with cleanliness and with the whole [COVID-19] environment still ongoing,” McCrory agreed. “And then [will come] a softer approach to what we can do to start building demand.”
Considering the industry’s three major stakeholders — guests, employees and owners — the leaders spoke to the great importance of communication and trust during the current situation.
“That’s always the case in our business, but in a time like this, regular communication and building confidence and trust is so fundamentally important,” said Cleary. “With respect to guests, we’ve got to help them understand all we’re doing as an industry — and for us at Marriott, what we’re doing as a company — to make sure that, when they come into our hotels, they can be assured we have the highest level of safety protocols and cleanliness.”
McCrory noted the industry is at a tipping point for consumer confidence regarding cleanliness, calling out the importance of training and employee buy-in to these initiatives. “Training and getting everyone, from an engaged perspective, to really buy into what we’re trying to do…we have to actually have it [be] grassroots in every one of our hotels.”
The speakers also noted regular virtual meetings have been a key tool for managing relationships with owners and employees and ensuring open communication.
“There’s not a lot of good news anyone can tell a hotel owner these days. I’d say the vast majority of hotels in Canada are running operating losses, which puts a lot of strain and stress on our owners, so communication is paramount,” added Cleary.
Speaking specifically to communication with employees through this situation, Leon said one of the most important things for employees, whose hours have been impacted, to understand is the situation has nothing to do with their value within the company and everything to do with the current circumstances. “Some of our team is busier than they’ve ever been right now and others just can’t do what they normally do because of the situation that we’re in,” he stated.
“Even though I might not be able to go back to furloughed associates and say, ‘our hotels are booming and we’re going to hire you all back tomorrow’…sharing with them what we know is greatly appreciated,” added Cleary.
As MacDonald shifted the conversation to the future and recovery, the panelists agreed the return of group travel is still a long way off. Both Leon and McCrory pointed to drive-to leisure and regional corporate travel as markets expected to return first as travel slowly resumes.
“There’s some reasons to be optimistic — you have business re-opening, we’ve got pent-up demand for travel, we’ve got people wanting to do stay-at-home vacations — but, at the same time, there’s still an awful lot of uncertainty out there and we just don’t know what the future path of this pandemic is going to be,” Leon added.
Cleary explained he is most optimistic about long-term recovery, after a COVID-19 vaccine or new medical treatments become available. “People are still going to want to get together in group meetings, so long term, I still feel confident about our business — people love to explore,” he said. “But the issue is how long that will take…In the short run, the recovery is going to be slower in Canada than what we’re seeing, for example, in the United States and other parts of the world…Canada’s been more cautious and thoughtful in its reopening.”