Seven consultants from the International Society of Hospitality Consultants summarized the best ways to deal with any oncoming downturn.
MIAMI—While there’s no definite indication of when the next possible downturn will be, it’s never too early to begin planning for it.
Read below for the closing takeaways from the seven participants in the Hotel News Now/Castell Project think tank titled “Now is the time to prepare for the next downturn,” held during the 2018 International Society of Hospitality Consultants annual conference at the 1 Hotel South Beach.
- Read speakers' advice on planning for a downturn
- Read about how consultants identify whether a downturn is on the way
Tea Ros, managing director, Strategic Hotel Consulting
“If you are planning in the long-term, then there are things (such as) technology with the energy systems that you can invest in through (capital expenditures). You need to have a budget to invest, so that’s the time to invest in it when you have the money, and that gives you savings in the long run. These are the sort things that we should be looking at on a more long-term basis, have a more strategic view of things, and then we are not forced into the situation where we have to do these very short-sided panic decisions because we don’t have any other option.”
Suzanne Mellen, senior managing director-practice leader, HVS
“The conversation with your ownership and with senior management should be to understand the strategic objective of the asset, and the underlying debt situation. Having that conversation is a critical thing that people should be doing now.”
Judy King, founder and principal, Quality Management Services
“Trust and loyalty are extremely important in that employee-employer relationship. Whatever can be done to build that so that we ride that downturn and it’s not a situation that’s adversarial, that it is something that if we’re working together, the better off we’ll be—not only in the immediacy, but certainly in the long-term, and how that particular employer is regarded.”
Cecilia Gordon, director, Goulston & Storrs
“When you’re planning for going into the downturn, you also need to plan for coming out of it. Think about what it is you want to have accomplished, or you want to be as you come out of it. Some (companies) took a reputational hit because of how they handled the last downturn. There was a lot of panic and people made some choices that they later regretted.”
Deborah Friedland, managing director, EisnerAmper LLP
“I would suggest—both on the property level in terms of management and the ownership level—to increase reserves. Cash is king, right? So if we do end up going into a downturn … you want to be able to have enough working capital to be able to maintain the property and pay your staff and not have to cut the concierge. From the investor perspective, it would be hugely advantageous if you were the only person in the game to have a significant amount of cash.”
Jennifer Findlay, founder, Core Essence / International Wellness
“Look to be more flexible and more agile in terms of what it is that you’re offering; underscoring that developing partnerships and having that plan in place is really important.”
Amanda Chivers, managing principal, Crown Hospitality Consulting
“Streamline, and when I say that, I’m looking at two things: the speed to market—how agile your property is in being able to adjust to market dynamics; and the ease of booking—making sure that you make it easy for people to do business with you.”