As we head into an uncertain winter and the likelihood of increasing restrictions, the team at Global Asset Solutions wants to take this opportunity to applaud the luxury sector for innovating throughout the pandemic and energise the broader hotel market.
Dimitris Mittas, VP, finance, Europe, Global Asset Solutions, said: “The segment has continued to evolve, despite the pressures it has faced. Luxury is, above all, the personal touch, and we have been in awe of the hotels which have delivered exceptional and memorable experiences, creating much-needed havens in difficult times. We look forward with hope to 2022.”
Respond, recover, thrive
This will not be a typical recovery, with the global operators less able to support their owners after reducing their workforces in early 2020. Recovery strategies must, therefore, be orchestrated instead by owners.
Experienced hotel asset managers will drive critical actions: reflect, restart, and revitalise the operation quickly. These actions will help businesses survive and respond to a successful future by laying the foundations to thrive in the aftermath of this crisis.
In order to prepare for success in the new normal, you must understand the customers’ needs and how the profile of the customer has changed. It is also critical to get your cash flow in order, with a close eye on revenue management, cost control, and government support policies. These measures will help to build resilience and give you the chance to rethink the status quo, looking again at staffing, F&B performance, and opportunities to strengthen EBITDA.
Gain visibility by determining how an asset performs in the absence of a? relevant last year or budget comparables. Look at how the competition is faring and what actions it is taking.
Communication is key to success. Establish HR policies that keep the operational team up-to-date with the new normal and adapt the current operations to meet the latest industry requirements, sanitation guidelines, and country regulations.
Look again at your asset and adapt to the environment you are in. Once you have focused on the business itself rather than the location and demand, you can look at how to generate demand and minimise risk as the sector continues its rocky road to recovery.
Inspiring gathering
The Inspire 2021 event, attended by GAS and hosted by the International Luxury Hotel Association, covered topics including Overcoming the Talent Crisis: Strategies to Build your Workforce and Understanding Diversity, Equity & Inclusion, to Changing Consumer Expectations that now require Technology Shifts – how does this affect the hotel business?
Alex Sogno, CEO, GAS, said: “I think the major shift at the moment in terms of luxury is the importance of social media. It’s incredible, you have an influencer posting something, and it directly impacts your business. Incredible. We are recommending that certain hotels have a dedicated social media manager to build content and to be proactive to control your online reputation.”
Attendees heard how technology was there to give guests a choice. To do what they want rather than dictating what they should have as hotels have in the past. Kevin Edwards, business development director, Alliants, said: “Guests were growing more tech- savvy before the pandemic, and they want to be able to use technology at different points of the journey. Where we seem to have fallen behind from the hotel’s point of view is, actually, are we enabling choice? You find that guests vote with their feet and decide to do what they want with somebody else. We saw it with the OTAs, and we are seeing it again.”
Michael Mrini, director of information technology, Edwardian hotels, commented: “In 2015, when we launched our online check-in, we wanted to provide that choice. And we had about 10% take-up prior to Covid. It was about 33%. During Covid, as you can imagine, that was about 97%. And now people will start seeking the ability to do everything on their mobile devices. Guests are evolving just like the rest of the population. However, in hospitality, people still want the human touch thing. They want employees at the hotel to be good hosts. So the approach we took is that the technology is there for both the guests to empower them and give them a choice and to assist our employees and free them up so that they spend more time with those guests who want the human touch.”
David Orr, CEO, Resident Hotels, said: “I have personally always believed in making sure there are people in and around the very first moment of crossing the threshold in the hotels. I think it would really take away from the experience if you were reducing that human interaction right at the outset. And, of course, right at the point of departure. We have used technology to inform the team to provide a more personal service, which creates a better connection. “As we reopened, the feedback was very much about the human interaction. We are also seeing good responses to our new TV system, which for example, puts the TV controller into the hands of the guest, in their mobile device. It’s closer to what they have at home, and it all goes to improve the experience.”
But is everybody ready?
Edwards said: “It’s quite interesting when you ask clients to show you their guest journey, and no one has that documented. Nobody says: ‘Well, this is what they’re going to do going from one stage to the next. So my question is: ‘how well do you understand what your own guest’s journey is that you’re trying to deliver? Before you can consider the technology around it, it’s understanding how well you understand your business process. Right?”
Mark Forrester, chairman, 80 Days, warned: “There’s a danger of one size fits all. It’s essential for hotels to look at the interaction of technology with their brand cornerstones. Don’t just jump into tech because everyone’s doing it. You need to understand your lifecycle and understand your audience.”
Case study: Molitor, Paris
The Molitor first opened in 1929 as a classic of the Art Deco style and was, for over 60 years, Paris’s most famous swimming baths with its two swimming pools and its avant-garde atmosphere.
The complex was listed as a historic building but closed in 1989, having fallen into disrepair, after a period in which it was used by artists, who transformed the building into a Mecca for the Parisian underground.
In 2007 the Paris City Council launched a tender process for the restoration and operation of the building, with the intent of transforming it into a hotel. In 2014, after two years of renovation and €80m in investment, the hotel was reopened under the Accor brand MGallery, with 124 rooms and suites.
Global Asset Solutions provided a 360° health check of the hotel, with the primary goal of identifying the operational efficiency/integrity and the risks and opportunities in the hotel’s operation.
This included reviewing the financial procedures of the hotel and the compliance to USALI while providing recommendations on how to align the work of the team better and streamline processes; analysing the Sales & Marketing strategies to identify potential to increase the revenues; a monthly detailed quantitative analysis of operating data and full-year forecasts of all operating departments, review of outstanding debtors; working with the hotel team on improving F&B; engaging with the operator to provide the proper departmental support and reviews of Human Resources requirements and general procedures, capital investments, preventive maintenance, and in broad focus on new business generator initiatives.
For more detail see: https://globalassetsolutions.com/success-projects/m-gallery-hotel-molitor-paris-france/
Following our initial review, the client appointed Global Asset Solutions again to provide a detailed asset management action plan focusing on finance, sale & marketing, and revenue management.
Such assignment allowed the hotel team/performance to strive to the next level and supported the operation team to bring new initiatives on board to improve sales, control systems in finance, save cost, and drive real estate value for the owner.
Global Asset Solutions
Global Asset Solutions operates worldwide and is the largest independent asset manager in Europe, with assets under management worth over $15bn. The company leans on decades of experience in the luxury sector to deliver bespoke solutions which allow investors to grow their asset value and realise the potential of their assets.
