It’s hard to imagine a scenario where the hotel industry emerges unharmed from the risks it currently faces with increasing coronavirus concerns.
I’m going to start this by noting a couple incredibly obvious truths: I’m not a medical profession, nor am I an economist. I carry no real qualifications for making any sort of broad pronouncement that you should put any weight in.
With that out of the way, I’d now like to note something else I think is exceedingly clear: The good days are gone (at least for the time being).
The most recent earnings season was an interesting one for publicly traded hotel companies, although the timing of it was more than a little inopportune because hotel executives were being asked to give their projections for 2020 seemingly just moments before having the rug pulled out from underneath them.
Almost all of them have put on brave faces, opting to quantify the impact of increasing fear related to the strain of coronavirus known as COVID-19 in the most finite terms possible, often by pointing to specific group cancellations as impacts but opting not to get into how the increasing prevalence of the disease is affecting larger traveler sentiment.
And broad industry-spanning organizations such as the American Hotel & Lodging Assocation and the U.S. Travel Association are, as is their duty to their members, pushing out the message that things are still largely safe and travelers and companies shouldn’t overreact.
These are the right moves to make. They’re also likely to be futile.
I can’t imagine a scenario in which this genie is successfully crammed back in the bottle. This black swan has landed, and there’s no avoiding it now.
From a business perspective, having a clear end to this prolonged cycle isn’t the worst thing for the industry, although that’s a callous thing to think.
There was a palpable sense at the recent Americas Lodging Investment Summit in January that hoteliers were ready to turn the page and start a new cycle. The industry seemed, at least at that point, to be running on the fumes of the previous, prolonged upcycle.
Well, you can’t start a new cycle without things getting worse first.
So for the time being, I’d suggest hoteliers not fret about things they can’t control. Do what they can to take care of their guests and employees, hope for the best and ride out the storm. Sunny days will come, but not in the immediate future.
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