What Is the Staying Power of Stayover Housekeeping Service?

Hoteliers Face a Decision on the Frequency of Housekeeping Post-Pandemic

Published by: CoStar News/Hotel News Now/Michelle Russo and Jordan Bell

As the hotel industry continues to recover from the ongoing COVID-19 pandemic, there will almost certainly be opposing views on which pandemic-related service adjustments will have future staying power.

Many in the industry no doubt wish for a return to the halcyon days of 2019, with its multiple food-and-beverage outlets and twice-a-day housekeeping service, because such a return would presumably foretell a full recovery.

Others may feel the current environment requires an increasingly personalized and amenity-driven approach to help induce some of the demand that’s been sidelined for the better part of five quarters — at least in the near term.

Still, there are others who would be happy to recoup some of the tab that COVID-19 has stuck them with by forging ahead in cost-containment mode indefinitely.

Although it’s unclear how these philosophical differences will ultimately play out, one topic that fans of spirited boardroom debate will want to watch closely is the future of housekeeping stayover service.

Industrywide, there has been a varied response to housekeeping stayover service since the pandemic was declared in March 2020. While there is clear consensus among hotel brands that cleaning standards need to be heightened once staff enter into guestrooms, the guidance around the actual frequency of stayover cleaning has varied. Some brands chose to continue daily stayover service at the outset of the pandemic, while many opted for some type of modification to the service — either complete elimination, markedly reduced frequency or a “by-request-only” model.

Once the industry fully recovers, the projected value of eliminating stayover service altogether ranges from 160 to 210 basis points in gross-operating-profit margin gain relative to pre-pandemic performance for the sample properties — with an average gain of 170 basis points, based on an analysis of six different hotels in the hotelAVE portfolio.

In another scenario, reducing stayover service to every third night conservatively placed the projected GOP margin gain between 100 and 130 basis points, with an average gain of 110 basis points. In a third scenario, in which stayover service is reduced to every third night, but a “trash, tuck and towel”-style refresh is offered each day in between, the projected GOP margin gain conservatively ranges between 30 and 60 basis points, with an average gain of 40 basis points.

For each scenario, the estimated gain at full occupancy recovery is driven primarily by labor savings and includes consideration for reduced cleaning supplies, laundry expense and guest supplies. The longer the length of stay, the greater the potential upside; and the faster that increasing wage pressure threatens to outstrip average daily rate growth, the greater the financial incentive could be for a particular property to rethink stayover service in the future.

For example, a 120-room, select-service hotel running 75% occupancy at $120 ADR would save $63,000 to $82,000 by eliminating stayover service. This can represent an additional 5% of earnings before interest, tax, depreciation and amortization. The economy and select-service sectors have the greatest opportunity to embrace a full-elimination of stayover service.

Reaching a verdict on the future of stayover service perhaps is not likely to happen overnight. Neither is the prospect of a one-size-fits-all solution when it does arrive. Chain-scale, ADR, labor markets, guest expectations, key market-specifics, labor shortage and even key property-specifics are among factors that will have to be weighed on a macro scale by the brands to influence the direction that the industry gravitates toward. But one thing is for certain: The stage is set for a fruitful and necessary debate to revise standards rather than revert to pre-COVID-19 practices.