The global hospitality industry has been facing an unprecedented crisis as a result of the COVID-19 pandemic and the resultant suspension of travel, businesses, events and leisure activity. When the dust eventually settles, the world will see less hotel supply several properties would have been unable to withstand this time of extended business losses. The hotel performance recovery is likely to be slow for most of the world, said Thomas Emanuel, STR Director, in an interview. Excerpts:

What's the impact of COVID-19 outbreak on the hospitality industry globally? Which countries are expected to be the worst affected by this pandemic?

The impact is varied in terms of timing --China and neighbouring Asia Pacific markets were roughly two months ahead of other regions -- but virtually all markets have experienced a significant number of closures and severe performance declines. In many parts of the world, we have seen occupancy falling to an unthinkable 10 percent or worse.

Fortunately, there have been early green shoots of performance recovery in China, and the hope is that we will see a similar trend developing around the world.

>

China's hospitality sector is showing early performance recovery, according to STR

Which are the major events and conferences facing disruption due to rescheduling, cancellation or postponement? How this is going to impact the hotel industry in those countries?

Certain markets are heavily dependent on event business throughout the year, and in general, major events are important for hotel demand everywhere. The crisis has been intensified with many events outright cancelled. Delayed mega events, such as the Tokyo Olympics, Expo 2020 in Dubai and UEFA Euro 2020 will shift demand to 2021, but we are forecasting limited participation in these events as the travel industry will be greatly impacted by the potential global recession. Still, these will be key events in aiding hotel performance recovery in 2021.

How is this going to impact future hotel supply and ongoing projects in countries that are heavily reliant on Chinese travellers/guests?

A significant number of temporary property closures have been reported around the globe. A lot of the properties we saw closed in China have come back online, and we anticipate a similar trend in other countries as containment measures are successful and travel can resume in some capacity. However, when the dust eventually settles, we will see less hotel supply in the world because a number of properties would have been unable to withstand this time of extended business losses.

>

Delayed mega events, such as the Tokyo Olympics, will shift demand to 2021

How will hotel construction in BRI countries be impacted? Will the outbreak of COVID-19 impact or slowdown future supply or hotel developments in these countries or along these corridors?

With economies in decline, restrictions on people movement and greater challenges accessing construction materials, there will be a slowing down in development activities. The short-term impact is on construction time, as there is no longer a rush to complete projects in time to take advantage of the record-breaking demand environment that we knew just a few months ago. While those projects with shovels already in the ground are likely to be completed on a longer timeline, we will also see more projects from the planning phases being outright shelved.

What could be the estimated loss for the global hotel industry due to the COVID-19 outbreak? Based on past experiences, how long will it take for the global hospitality industry to recover?

Until the situation stabilises, we are unable to place a figure on the amount of loss the industry has seen. However, the level of loss is expected to be massive in a lot of markets.

We have seen in the past that the hotel industry is able to recover from crisis, but the COVID-19 pandemic is like nothing any of us have ever experienced. The hotel performance recovery is likely to be slow for most of the world.

Now that the impact of the pandemic is pretty much visible on the hotel industry across the globe, how should hoteliers plan to come out of this crisis? What strategy or plan they are adopting or should adopt now and beyond to mitigate the impact and position themselves for a strong comeback?

Hoteliers need to identify what they can control and what they cannot. From there, efforts should be focused on actions that yield tangible results. Once travel restrictions are lifted, we expect a rebound in leisure travel, what the Chinese media has dubbed 'revenge travel', to take hold. We expect corporate transient and group business to follow eventually.

For properties to be ready, they need to redefine what the term 'clean' means in a post- COVID-19 world and communicate their standards and procedures clearly and often. Only then will travellers feel safe and ready to visit their properties.

The 6-foot social distancing rules will permeate all walks of life and will also influence how hotels operate. The new manuals for a lobby flow, restaurant flow and meeting room setup are being written as we speak and hoteliers need to think about what guests want tomorrow, today.

(Reporting by Syed Ameen Kader; Editing by Anoop Menon & Bhaskar Raj)

(anoop.menon@refinitiv.com)

#COVID19 #CHINA #HOSPITALITY #HOTELINDUSTRY #RECOVERY #BRI #TOKYOOLYMPICS

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© ZAWYA 2020