Bill Barnett’s Top 5 Post-Crisis Hotel Development Trends
The following was published on Hotelintel.co and is reproduced here with their permission.
The current crisis is unprecedented, even for someone who’s seen it all before. Bill Barnett, Founder and Managing Director of C9 Hotelworks, has over 30 years’ experience in the Asian hotel industry, so he is well aware of just how recoveries take shape, and the details to look out for. He talked to Hotelintel.co recently to outline just how he thinks things might pan out from here for hotel developers.
Let’s play musical chairs, what are the three R’s?
Given the choice of embarking on a new development, or instead seeking lower investment with the constraints on capital, a faster timeline, and greater economy, the winner may be the retrofit. I expect many investors to opt for the latter in cash-crunched times, and there will be emerging new opportunities for conversions.
Taking on alphabet city, it’s the three R’s – repurpose spaces, reposition, or renovate. This is probably the most exciting creative design space in the coming years, as the reimagining of hotel spaces that have become outmoded due to Covid-19 is the new mantra.
Talking distribution, is this a game changer, or ‘same same but different’?
I’ve been reading a lot of hospitality opinions lately that the recovery period is indeed the death rattle for OTAs. This of course is pure guesswork. There is so much financial stress at the corporate level for both hotel groups and OTAs, the likely scenario is that some will live, some will die, and the end game will see a form of consolidation. Let’s call it for what it is – a culling of the herd.
Will direct distribution channels finally live up to their millennial promise, or will the OTA dominance return? If you were to bet between hotel groups or OTAs to be best geared-up for post Covid-19 recovery strategies, you’d have to favor the faster moving, more tech savvy OTAs. Hotel groups are simply too hierarchical and slow, along with having the cumbersome issue of overcrowded brand stables.
What about hotel services, is room service back with a vengeance?
One of the biggest banes of a single business traveler has always been walking into a restaurant, shame all over your face, and asking for a table for one. In a nutshell this will likely come back into vogue given safety and hygiene issues and a table for one will suddenly be cool again. Buffets, are you kidding? Okay I might be exaggerating as yes, there will always be a buzzing pub scene, but for the short-to-medium term we will see a reversal as travelers who typically want out of the box will instead want to go into the box.
For hotels this is a fantastic opportunity to bring back the golden age of hotel service – in-room dining, airport transfers, upgrades to suites for larger private living areas, and the list goes on. While experiential, local, neighborhood, authentic travel is not dead, let’s just say it has taken a Xanax and gone to bed early for the moment. The question is whether hotels can rise to the opportunity, or will they languish back to dusty old brand standards and a traditional approach?
Is the ‘Fear Factor’ of post-Covid-19 myth or reality?
One of the leading indicators of who wins this war is who adapts to the new ‘Fear Factor’ culture of travel, and who will be able to create the perception of safety, security, and hygiene. This is key to the entire premise of if, and when, travelers will go on a trip, and also what is their hotel choice. We have seen Asian travel first dictated by the advent of the Lonely Planet Guides, then by Tripadvisor, so now after the present crisis subsides, what or who is the new authority or influence over where, how, and what is safe?
I’m in no way buying the argument that travel is dead for the next decade, and that we have entered an entirely different world. After the tragic events of 9/11, first America and then the world was obsessed with a ‘Fear of Flying’. America basically compelled the entire world to take off their shoes at airports. Developers or hotels who are able to address these concerns with their brands will have a clear advantage. And yes, ‘Fear Factors’, like other things, do diminish over time. This too will pass.
What’s in store for the current hotel management model?
Traditionally, hotel management groups are all about scale. As we head into what is likely to be a financially damaged global ecosphere, labor costs are the single largest expense and job losses are looking to be massive. Scaled down operators will be closely looking at their key revenue opportunities and those with the most potential upside. Those requiring human resources will have an advantage.
I would expect global and regional hotel operators across Asia to franchise more. White label management of these properties is also a serious opportunity. Soft brands will become more attractive. As for the large HMC’s, we see them focusing on development and pipeline given they are listed groups and need to scale up revenue and also distribution, as this is needed by all of their models and is simply less labor intensive compared to full time management. Hotel groups will have to change or they will die.
So, given the lockdown and all that free time, what are your Top 5 songs for self-distancing and staying home?
Brain Damage/Eclipse – Pink Floyd, Ain’t No Sunshine – Bill Withers, Alone Again – Gilbert O’Sullivan, Walk on the Wild Side – Lou Reed, The Good, the Bad and the Ugly (soundtrack) – Ennio Morricone
Any final word on the Covid-19 crisis?
It’s time we change the narrative, start looking at the future opportunities and ability to reinvent our business models. Hotels are my heroes, and what we need now is not to be dragged down in despair but to restore the travel and hotel trade to be superheroes once again.