COVID-19: Protocols could cost billions | U.S. leisure travel recovery

Cleanliness protocols could cost US$9B annually

Asset management company HotelAVE released projections on anticipated costs that hotel owners and operators can expect to incur as they prepare to reopen. The company estimates that new cleaning protocols could potentially cost the hotel industry as much as US$9 billion on an annual basis, based on factors such as the increased frequency of cleaning guest rooms and public spaces, new supply costs and reopening expenses. A hotel’s ability to maintain a neutral room attendant payroll upon reopening will be dependent on its capacity to reduce the frequency of stayover service – a service that consumers don’t highly value at this time, data shows. 

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Recovery of U.S. leisure travel demand

A new article from Deloitte looks at insights into the trajectory of leisure travel in the United States. The story unfolding around the financial impact to potential leisure travelers is a bit murky. The percentage of U.S. consumers concerned about making upcoming payments (27%) and delaying large purchases (43%) have yet to show signs of falling. While the economic fallout from COVID-19 will naturally have a latent effect, a potential scenario of falling health concerns and prolonged financial stress brings important implications to the travel industry.

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Radisson AB expects new cash injection

Following the cash injection of €100 million (US$113 million) in the form of a subordinated shareholder loan received by Radisson Hospitality AB on June 4, Radisson expects to receive from its current shareholder, Aplite Holdings AB, an additional cash injection up to €100 million (US$113 million) in the form of a subordinated shareholder funding to cover ongoing operating costs during the COVID-19 crisis. The additional injection is intended to provide further support to the group’s financial position and to assist Radisson in securing the planned renewal of its RCF currently in place. The shareholder will also work together with Radisson’s management team to improve the group’s business performance and cash flow control.

Mandarin Oriental’s WeChat strategy

Mandarin Oriental Hotel Group has launched all-inclusive booking and payment experience on the WeChat platform. Guests can now book any Mandarin Oriental property around the globe from within the WeChat platform and utilize their in-App WeChat Pay account to secure reservations. Features of the company’s WeChat account include the ability for users to make and manage room reservations using WeChat pay, utilize a direct call option for restaurants, and access WeChat private messenger.

Singapore and China to launch travel ‘fast lane’

Singapore and China will be launching a “fast lane” to facilitate essential business and official travel between both countries starting June 8, according to HVS. The “fast lane” will be first established between Singapore and six Chinese provinces and municipalities, including Shanghai, Tianjin, Chongqing, Guangdong, Jiangsu and Zhejiang. This will gradually be expanded to include other Chinese provinces and municipalities. The decision is part of Singapore’s plan as it enters phase one of its post-circuit breaker initiatives, and moves cautiously to reopen its borders by exploring similar arrangements with a few other countries, allowing for quarantine-free, cross-border travel to reboot the economy.

Scandic sees bookings double amid easing lockdowns

Sweden’s Scandic Hotels said its bookings per week had doubled over the past month amid easing pandemic restrictions and forecast occupancy rates to edge higher in the coming months on the back of reviving domestic tourism. The operator of about 280 hotels across northern Europe has been hard hit by a deep slump in travel due to the pandemic with bookings and occupancy levels hitting a record low in mid-April while more than half its hotels remained shut in early May. But with easing restrictions and signs of a slowdown in the spread of the novel coronavirus, Scandic has seen tentative signs of a recovery.

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Sustainability is key

According to a white paper from communications firm Finn Partners, the only way the hospitality industry can protect itself from more global disruptions is to build sustainability into the business at its core. The article says this is also a time for responsible tourism to become the norm. In the recovery phase, it is critical that businesses in the industry maintain the integration of sustainability and develop strategic resiliency plan in order to protect the business, employees, travelers and the environment on an ongoing basis.

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