Asset manager’s outlook: Pricing, groups, brand relationships

Predictions about how demand will bounce back tend to generalize, but when you’re managing a portfolio that includes properties across the U.S. and the spectrum of segments, generalizations aren’t very helpful, says Michael Doyle, managing partner and executive vice president at hotel asset manager and advisory CHMWarnick, who spoke with HOTELS about how the company is handling F&B, relationships with brands, group booking and forecasting.

HOTELS: Where do you see your focus for the balance of 2020?

Michael Doyle: The one word I would use to start the whole conversation is forensic. You need to forensically get into the details — understand the market you’re focused on, who is traveling, what that travel looks like and what business is going on in that market. You need to critically look at demand drivers in particular markets. You can’t assume that because something is happening here that means it will be happening over there.

It’s important to get into the details of that particular market. You can use business intelligence, OTA insights and other tools offered through the brand managers. You can get very specific these days, down to the company level, to understand what activity they have in the market. Then you would look at a hotel’s performance against some of the competitors to see if it’s achieving the level of marketshare you would expect. By doing this, you can guide the few salespeople you may have to ensure they’re focused on the right industry, segment or company to ensure that you’re driving some demand from them.

Our priority is to ensure we’re accessing the right data points and understanding them to determine how we will price and position accordingly. We’re putting packages together to try to appeal to travelers. But when you have a hotel that can’t serve food and beverages and doesn’t have an open fitness facility, basically you’re selling the ability to just get away.

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H: In general, how are you handling F&B?

MD: We’re continuing to refine ways to balance social distancing and provide people with a safe meal. We’ve been working through those efforts now across all hotels and all brands. We’re using this opportunity to reset ourselves with foodservice, open smartly with fairly limited offerings, more grab-and-go offerings, as well as have the right connections in the market for local restaurants to support the hotels as well. We’ll have their menus available and offer recommendations about which ones would be best for delivery. We’ve also been working through GrubHub in one hotel to deliver meals to a group meeting there. All of our hotels have weekend offers that include breakfast, and those were all ceased for the short term because we closed down F&B operations. We’ll see that return, but more through grab and go or barista options. We’re also being very careful bringing back club lounges as we try to determine how to manage social distancing and buffet-style offerings.

H: What’s your outlook for group bookings?

MD: Meetings are a huge concern, one that’s different from state to state. In states where the group size limitations are very low, it’s a significant issue. About 80% to 90% of the business that cannot be accommodated because of limits is relocating to another date in the future. We’re seeing very little in the way of cancellations. Our salespeople are pursuing short-term opportunities — small meetings, rooms-only meetings. There is still a fair amount of business we have been able to attract through government, pharmaceuticals, airlines and now some sporting events and activities. The corporate meeting segment is going to be a major challenge; they have been most active at moving events out into the future as they try to determine best strategies for the safety of their associates.

H: Has COVID-19 altered the playing field in terms of brand relationships?

MD: The brands have been good partners. There is always some level of tension between brands and ownership; our objectives and priorities are often slightly different. But I think during this time they have been very good to work with. The brands have recognized the importance of partnership with owners and made good efforts to make sure there is strong collaboration.

Ultimately what it comes down to is labor represents the single largest expense at the operations level. We’re challenging the brands with how we can emerge with a more efficient structure, and how we can build these structures in the future to look different than they do today. Technology is one solution, but we’re also looking at hotels that have added people to the operation that makes them too heavy at the top. Is that relevant today, can we do things better/differently? Are people today more capable of multitasking?

H: How has the falloff in demand impacted pricing and forecasting?

MD: We had a pre-COVID pricing position for each property: We monitor the market and look to be competitive against a specific comp set. We’re measuring those metrics and continue to do the same at this point in time, making adjustments based on where see the market now. That will continue to evolve. Our general practice is to minimize the amount of discounting going on because know that’s not profitable. Our focus is on preserving ADR and treating demand similarly to before COVID.

As for forecasting, we’re doing it more frequently. In the past we might intently focus on one a month. Hotels are still producing one, but we’re having discussions and looking at numbers pretty much every week. We’re trying to determine where the business is coming from, seeing the numbers and how they impact the hotel. At end of the day, it’s also an issue of cash management.