Hotel owners focus on strong foundations as cycle turns

Great HNN article on hotel owners ability to roll with whatever economic cycle comes their way.

Published by: Stephanie Ricca/Hotel News Now
Published date: September 2019

VIENNA—As the hotel industry cycle turns, owners are turning their thoughts to performance, labor and management issues, focusing on strong foundations to maintain strength in a changing environment.

Owners of hotels across Europe and Asia talked about their strategies and current thinking during a panel discussion at the recent International Society of Hospitality Consultants conference.

Planning, flexibility
Advance planning and the flexibility to respond to market changes as needed are key, speakers said.

“Our industry is cyclical; it’s supply-and-demand-driven and after a long time up you’ll have down time,” said Michael Manz, director of ASW Group, a Zurich-based investment group. “So when people ask me if we’re prepared for a downturn, I say the aim is to have the variance as low as possible between up and down. By focusing on yourself and the strengths of your product, you can achieve.”

One way Rudolf Krizan, COO of Best Hotel Properties, dealt with the downturn in his home market of Bratislava, Slovakia, was to reconsider the branding on some of his portfolio as the market turned. He converted a Bratislava property into a Luxury Collection-branded property and “doubled the results” of the hotel. The company also owns hotels in Moscow and London and manages others in those markets.

Amruda Nair, director of Araiya Hotels & Resorts, added that hotel owners must be able to adapt quickly, since market conditions can change based on a variety of factors.

“We’ve had a change of government (in India) and it’s actually quite promising; there are dramatic rollouts in terms of policy change,” she said.

Supply-and-demand dynamics across India are improving as well, Nair said, which is creating upcycle conditions.

“We had tremendous supply growth in 2014 and 2015, and at the end of 2018 we saw the beginning of an upcycle,” she said. “Given the size of the market and the strength of domestic consumption, demand has caught up and we’re beginning to see overall (revenue-per-available-room) increases across the country.”

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