INDUSTRY INSIGHTS| The Great Restart

Renee MacDonald, CMP, CS, Breaks Down "The Great Restart" and How it Will Come to Fruition for Hotels in 3 Waves

The positive news is flowing in for the hospitality industry with many hotels boasting about record level occupancies compared to last year and some properties even achieving the coveted sell-out. According to STR’s latest data through March 13, 2021, hotel occupancy levels hit a 52-week high at 52.1%. Absolutely fantastic news and optimism are plentiful that business will continue to rebound as we move into the second half of the year. Could this truly be the beginning of "The Great Restart?" Experts predict the comeback for hotels, or The Great Restart as we like to call it, will come to fruition in three different waves.

WAVE 1

The first wave revolves all-around leisure travel as we have already begun to see business return and with a vengeance with families eager to travel after a year of lockdowns, shutdowns, and being pent up at home for the last year. Markets across the U.S. prone to attract annual Spring Break and Bike Week visitors stood out amongst the rest. Travel is rebounding in the high-end and lower-end leisure market with hotels and resorts filling up and even selling out as spring is on our doorsteps and stimulus checks are hitting American's pocketbooks. This is great news as we start our road to recovery in wave one, The middle-tier of leisure and international travel is still stifled, however will continue to rise throughout the rest of the year as travel bans are lifted.

WAVE 2

The second wave will be the return of business travel. As vaccines are distributed throughout the nation and business leaders determine it's safe for their team members to resume pre-covid activities such as returning to brick-and-mortar offices, business travel for face-to-face meetings will also resume. It's anticipated that there will continue to be an enormous need for virtual and hybrid meetings but with the proven ROI of the human connection and face-to-face interactions, business travel will definitely be part of The Great Restart sooner than later. Businesses should certainly be prepared for the anticipated high demand for small meetings and intimate events.

WAVE 3

The third wave is the return of group business with corporate events for mid to large group gatherings, whether completely face-to-face or hybrid. The group segment of the hotel business was the hardest hit due to the effects of Covid-19. Quite frankly, it was devasted! This multi-billion-dollar industry of catering revenue was basically erased from the record books nearly instantly. As the majority of all contracted events came to a screeching halt and cancellations poured in for 2020 and early 2021 this time nearly one year ago, this segment will have a much slower recovery process. This big question is,

Will business levels ever resume to pre-covid levels much less have the typical year-over-year traditional growth in revenues?

The fact is, there are meetings and events taking place currently and there are new contracts being signed for future dates. All very positive indicators that the predictions are accurate on how the three waves will unfold, however, we must remain patient because it will be a slow process for big conventions, conferences, tradeshows, and large social celebrations to return. With this slow return of group business, there is much at stake on how we replenish staff in these areas.

ZERO-BASED-BUDGET-MODEL

Many hotel chains took drastic cost-saving measures early on when the pandemic reared its ugly head. In some cases, major hotel companies had to reduce on-property and corporate staffing by over 40% by way of furlough or permanent layoffs.

Then the 2021 budget season began in late Q3 2020 while hotels were sitting at record low occupancies in the single digits. It was no easy feat to determine our fates for the year that lied ahead, so many hotel companies went with the Zero-Base Budget Model. With this model, every revenue dollar is offset by a dollar of cost, so essentially many hotels are planning on little to no profits in 2021. This is a very tedious process to manage as there as many ebbs and flows to the budget, forecast, and actual performance so constant adjustments are made as you true up the previous month's results.

As we slowly begin to recover and make more revenue, we slowly add in additional costs or expenses. Hopefully, this will be mainly contributed to a rise in labor costs by adding positions, but hotels will have to choose between labor or other additional expenses. Covid-19 has had many cost implications for properties due to new safety protocols such as additional cleaning costs in order to have safe environments for their guests, new equipment requirements for food and beverage displays, and let's not forget the massive amount of technology needs that have erupted as we have catapulted into this virtual and hybrid way of work-life!

THE GREAT RESTART

So as The Great Restart is definitely underway, the positive news is that within the past couple of weeks there has been an influx of job postings for hotels. Many of these are the front-line team members such as front office, housekeeping, facilities, restaurants, and even recreational positions in the resorts with amenities such as golf and spa. This makes sense with the return of leisure travel and some limited business travel. Even hotel group sales and revenue management teams are being reassembled in anticipation to handle the influx of RFP's and pent-up demand for face-to-face meetings. With group business at a minimal level and very inconsistent at that, the catering, events, and banquet team members must remain strong and have patience. Sadly, this lack in group business is a major contributor to why we still have nearly 4 million hospitality professionals unemployed. Hotels aren’t quite ready to pull the trigger on those roles yet because we certainly aren't in wave three yet.

This is where we freelancers, contractors, task force managers, or gig workers come in! As you know, we have lost many great hospitality professionals to other industries, or to them becoming entrepreneurs and business owners. We are already hearing from recruiters that it’s becoming difficult to find strong candidates and they are challenged in several markets.

For Catering & Events, with business levels going up and down, hotels shouldn't make the mistake of running on skeleton crews based on a "doing less with more" approach and not replacing their team. These are key sales roles that produce large amounts of profitable revenue streams. These professionals are vital to our customer's success because their roles require months of advance planning to bring the customer’s vision to life and to prepare the operations team to execute a flawless event.

Hotels are currently poised to pick true experts in their field, which ultimately our customers expect and will demand. There are many independent contractors for hire, but also you can source through agencies such as Fiverr, Upwork, and just recently LinkedIn announced they will be building their own "Gig Marketplace." You will also find several hospitality staffing companies preparing for task force requests. So, if you are on a Zero-Based budget and don't have the option to bring back a full-time team member, do the right thing and bring on a temporary position. It’s simply the right thing to do!

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Meet the Contributor

RENEE MACDONALD, CMP, CS

Honored to work at some of the most notable hotels in the region, Renee has

represented signature brands such as Sheraton, Westin, Hilton, Waldorf Astoria, Conrad, Curio, Canopy, Doubletree, and Embassy Suites Hotels.

Named Hilton's "Director of Events and Catering of the Year" for hotels over 750 guest rooms for best all-around performance, along with her commitment to mentor others, this contributed to her nomination for "Women Who Mean Business" by Orlando Business Journal. In her most recent tenure with Hilton, Renee served as the Senior Director and acting Vice President of Events, fully accountable for the sales strategy of a $1.5 Billion Catering operation for full service and luxury managed Hilton hotels in Canada, United States, Caribbean, and Latin America.

Throughout the years, Renee has been an active member in multiple industry associations and events such as PCMA, NACE, MPI, and CFHLA. As a 5-year Board of Directors member serving as Vice President and Treasurer for the Orlando Chapter of NACE (National Association of Catering Executives), she was recognized as the "2011 Caterer Member of the Year" for her commitment and dedication. In addition, she has earned her Certified Meeting Professional (CMP) credential which is recognized globally as the badge of excellence in the events industry by the Events Industry Council (EIC).

Currently, Renee is serving as a key Event Planner for the 2022 Special Olympics USA Games, the largest humanitarian event in the history of the state of Florida, she continues to give back to the community and others! Personal interests include spending quality time with her husband which is a police officer for the City of St, Cloud, two sons, and her fur-baby Pomeranians. She also enjoys traveling the world to learn about other cultures, see the natural Wonders of the World, and experience family adventure-style and adrenaline-packed vacations that really get her mind ready to take on the world.

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