Depth Of The Downturn
A trio of hospitality executives recently acknowledged the depth of the current downturn while discussing a number of key challenges for the industry moving forward ranging from the potential of price wars to helping the next generation of hoteliers navigate through the crisis.
Interviewed by Hotel Community Forum as part of its “View From The Top: Industry Leaders Speak Out” series, these veteran professionals offered their perspectives on the impact of the Coronavirus pandemic on the lodging industry thus far.
Bruce Haase, CEO, Extended Stay America, noted, “there’s no doubt this is creating lasting damage to the industry. I think the expectation for the industry in getting back to 2019 RevPAR levels by 2022 or 2023 feels about right based upon the depth of this and the duration of this downturn,” he said, later adding, “it’s going to take a while to climb out of it.”
Haase also expressed concerned about the race to the bottom that often occurs from a pricing standpoint during difficult times.
“Hopefully we’ve learned as an industry from the past that fire sale pricing doesn’t work and we will maintain some level of price discipline. We’ve seen a lot of price pressure out there, but I don’t think we’ve seen anything in our business too crazy yet,” he said.
Haase was bullish on the company’s positioning within the industry. “The good news is this segment will come out before the rest of the [industry] segments,” he said.
Larry Broughton, founder/CEO, Broughton Hospitality, recognized some industry leaders for making sure the industry, and its struggles, are highly visible. “I think folks like Chip Rogers [President, The AHLA] and some of these CEO of [major] organizations have done a great job of being out there and actually being vocal and being cheerleaders for the industry. There is no doubt that we need that. I’ve got friends who are texting and emailing me links to interviews they’ve seen with hotel CEOs and they never would have done that before so we are everywhere at this point. No industry has taken a beating like the hospitality industry,” he said.
Broughton also expressed concern about the many hotel executives throughout the industry and how they will handle. “For some of our leaders this is the first downturn they’ve experienced in the economy and then for it to be this dramatic; this painful; this long; this enduring; this broad and deep…It has really tested some of them,” he said.
Meanwhile, Chris Green, president and CEO of Chesapeake Hospitality, talked about the value of getting back into the workplace recently and interacting with a few industry colleagues, particularly for those in the business of hospitality.
“It helped me remember what we do. I would really challenge those of you in our business that are stuck at home right now to get out and do something. I think there’s a real risk in the isolation of forgetting why we do what we do and the value of what we do and the impact it makes on people’s lives,” he said.
Green cited some of the potential negative issues that can impact the attitudes of executives, such as the length of the business travel slowdown, segmentation, asset class problems and spikes in the virus. “All of us are susceptible to the pressure of all the data coming in and not being able to act on it,” he said.