The coronavirus pandemic has impacted the lodging market in the western world. Impacting the hospitality sector and hotels’ ability to generate revenues has halted their operation in the long term. Hence, various property owners are hard-pressed between debt and operating expenses. There are growing expenses on other aspects that have resulted in several properties coming to the verge of sale.
• The low demand and high operating expenses have compelled hotels to close their operation temporarily. However, there is a silver lining.
• The worldwide pandemic has increased the demand for shelter and affordable residential units. Hence, renovating hotel rooms into the residential unit is a means to grab more revenue and cater to the community.
Hence, various hotel owners concentrate on transmuting their hotel rooms into the residential unit to ensure better returns.
The economic fallout
As illustrated earlier, hotels were on the verge of sale. However, most of them have reopened their business because of the national lodging demand. Remember that around 70% of closed hotel rooms in the western world have reopened because they have transformed their assets into residential units. Maxwell Drever says the reopening was slow and filled with challenges for some hard-hit markets. However, people are beginning their journey towards hotel transformation and trying to help the community and people associated with their economic sector.
Market location
One of the first areas that hotel owners have to bring into deliberation is the location of their hotels. Hotels located in urban city centers have a better chance of grabbing more cash. Along with this, they get the help of international or group travel. Hence, hotels transformed in these locations will get the workforce population without any problem.
Hotel positioning
Hotels with full service and on-time staff can serve their guests better. Remember that when the hotels have significant spaces for meeting areas and lobby areas, they can repurpose these areas for other aspects. When the hotels have an excellent staff supply, they can generate better occupancy and drive the rates. Along with this, it also helps bring in more employment opportunities for the younger generation. When hotels reopen their operation, they require more staff, increasing the employment rate.
Labor structure
Various hotels operate on labor agreements. Hence, they have limited operational flexibility. It only adds to the higher structural cost and other problems. Henceforth, Maxwell Drever suggests hotels must undertake flexible labor agreements and be more supportive of the workforce population to ensure that the total operation goes on fluently.
Zoning and legal restrictions
Repositioning hotels to alternate housing units is a complicated task. No repurposing of the estate can be complete without zoning protocol. Thus, whenever hotel owner converts their guest room into rental structures, they must adhere to the legal and zoning protocol.
Last but not least, hotel owners must work on the layout and structure of the hotel rooms. Remember that hotels are very different from residential units. Hence, redevelopment of the hotel rooms is dependent on a few key determinants. As a concerned hotel owner, you must be cautious of these factors and work accordingly.
