The unprecedented spread of coronavirus (COVID-19) has triggered a dramatic response among business leaders in the hospitality and travel industries. Yet, even with mandates to social distance and work from home, this pandemic is demonstrating that even in the face of an overwhelming challenge, work must continue.
“Believe it or not, other than our work-from-home policy and the postponement of some recent model room reviews, it is business as usual at the Parker Company,” says Mitch Parker of Miami-based procurement firm the Parker Company. “Most of our clients and projects are longer term (one to three years out), and if we are installing now, there is every intention of completing the install. Our longterm company plans will not change unless we see a significant slowdown on renovations, which we anticipate will become a factor for Q3 2020 and Q1 2021.”
Alan Benjamin, president of Denver-based procurement firm Benjamin West, adds: “In some ways, firms such as ours had a bit of a head start compared to the rest of the country. A month and a half ago, we were dealing with what was happening in China from a supply chain standpoint.”
Longterm Effects
Longterm economic projections inspire far less optimism among others in the hospitality market. Recent data from industry trade group American Hotel & Lodging Association (AHLA) reflects the staggering hit absorbed by the hotel industry—with hotels on track to lose more than $200 million in room revenue daily, on top of the $1.5 billion lost since mid-February 2020. With occupancy rates estimated to remain below 20 percent in the coming months, AHLA forecasts that up to 3.9 million jobs are currently at risk.
One of the company’s hit hardest by COVID-19 is Marriott International with the chain’s global business running 75 percent lower than normal. Already, hundreds of hotels have closed, while some may likely never reopen.
A statement provided to Hospitality Design from a Marriott International spokesperson reads: “As travel restrictions and social distancing efforts around the world become more widespread, we are experiencing significant drops in demand at properties globally with an uncertain duration. We are adjusting global operations accordingly, which has meant either reduction in hours or a temporary leave for many of our associates at our properties. Our associates will remain eligible to participate in Marriott’s health and disability benefits during this crisis. We are working quickly to mitigate the impact to our business while also focusing on assisting our associates, our guests, and our owners. While the ultimate impact is difficult to predict at this time given the fluidity of the situation, we remain confident in our longterm prospects.”
The New Normal
With hotel brands forced to shift perspective, progress on future developments may lose momentum, and design firms will have to weather the storm offsite.
“Our firm was well positioned to work remotely, learning from the experience from our greater China offices, and we were prepared to make this transition in anticipation of this occurrence,” says Gensler principal Tom Ito. “It happened a lot quicker than anyone expected due to the volatility and evolving occurrences with COVID-19. We are staying close to our clients and supporting them during these uncertain times. We have experienced an upward trend following previous down cycles due to this client-focused strategy, and we plan to come out of this stronger than before.”
Yet, other firms have seen projects paused or halted indefinitely, with a new reality presenting unprecedented obstacles.
“As things escalated over the last week, we have had several projects placed on hold. On projects that are actively installing, receiving information from vendors on production status and delivery status is becoming more and more challenging,” says Brent Lynch of Long Beach, California–based design studio HFS Concepts4.
“Certainly, there will be an impact on production around the world, like we saw early on in China,” Parker adds. “Unfortunately, the U.S. was making strides on bringing back production for hospitality products and we will see this significantly impacted in the short term.”
Silver Lining
Nevertheless, leaders also express confidence that the other side of the pandemic holds promise.
“U.S. sources will need staying power to remain alive through 2020,” says Parker. “In terms of projects, we will see renovations pushed back six to 12 months, but with the low interest rates, I don’t see any slowdown for new construction.”
“Travel always comes back,” adds Benjamin. “I don’t think the human need to gather with like-minded people, whether it’s for a hobby or business, is going to change. The demand will be there.”
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