TORONTO — Colliers Hotels and CFO Capital recently hosted the second instalment of their Canadian Hotel Market Update webinar series, which featured a panel of hotel owners to discuss regional operational viewpoints on the COVID-19 crisis.
The webinar was co-moderated by Mark Kay, president of CFO Capital, and Robin McLuskie, managing director of Colliers Hotels and featured five panelists offering perspectives from across the country. Speakers included Bertrand LeBoeuf, president, Groupe Daca; Jeff Appleton, CEO, D.P. Murphy Group of Companies; Mandy Farmer, president and CEO, Accent Inns; Ryan Pomeroy, CEO, Pomeroy Lodging; and Susie Grynol, president & CEO, Hotel Association of Canada (HAC).
“Since our first webinar just 16 days ago, the prognosis and outlook has clearly become even more sombre,” McLuskie said in opening. “More than half of all hotels are closed across the country, according to HAC, and the industry has laid off 80 per cent of its workforce — or about 250,000 jobs.”
Grynol provided listeners with an update on HAC’s work with the Government of Canada during this time, as well as current and forthcoming support measures to benefit the hotel industry. “Being one of the first hit industries and certainly a leading indicator of things to come, we were the first at the table with government, sounding the alarm bells that we were about to hit an iceberg,” she explained.
Since then, HAC has been focusing its efforts on three key areas as it lobbies government for support: measures to ensure employment, liquidity and recovery. “We have had considerable success on a number of our key asks, Grynol shared. “In fact, all of the government programs have been directly in line with our key asks — some ideas taken right off the page of our proposals.”
However, the association continues to seek additional measures needed to support the industry. “We believe that our sector should have priority access to [the guaranteed loans] when they get released,” she said. “[And] there should be a fine tuning of the eligibility criteria so that an individual property can apply for the $6.25-million, as opposed to per entity, because if you had to spread that loan across [multiple hotels,] it wouldn’t be enough. We’re also looking for forgivable portions of these loans.”
Based on panelist’s regional perspectives, it was clear that the current environment has been challenging for operators across the country.
B.C.-based Accent Inns has been lucky and is “weathering this crisis fairly well,” Farmer noted. “Even with two [of our hotels] closed, we’re running at an average of about 50-per-cent occupancy.”
For Pomeroy Lodging, which operates in Alberta and B.C., the company’s experience with the challenges presented by the oil crisis have helped ensure the company is nimble and prepared to deal with the challenges ahead. “We have a great team that’s been through that, [so] we have a lot of tools in the toolbox,” he said. “We went through a [very] dramatic period just recently, but…60 days ago our company was probably in the best shape it’s ever been in.”
“If you stay focused, accept your current realities [and aren’t] too in love with the system or process you’ve built…you’ll be ready when things turn around,” he added.
In Quebec, Groupe Daca has been focusing on medical and government clients, as well as long-term care and retirement-facility markets, to keep heads in the beds of its operating hotels. “We’ve done also cash flow analysis every time we decided to close,” LeBoeuf shared. “And, especially before the 75-per-cent government subsidy was in place, if we had a chance of keeping the hotel open we did.”
In Atlantic Canada, D.P. Murphy has temporarily closed nine of its hotels and, Appleton noted, those that are open have been seeing single-digit occupancies.
“While there’s no playbook per se, there have been cues from big events that have happened in the past and if it looks like a duck and quacks like a duck it probably is [one], so we were relatively quick [in reacting] — even if it wasn’t eloquent or precise,” Appleton said. “We’ve been using our time to keep engaged with our staff and start building our plans for what we’re going to do when somebody hits the green button.”
Panelists were asked to share how they plan to focus their marketing strategies once travel can resumes, to which there was general agreement that local markets will be the first area of focus. “Our marketing and staffing strategies [will] focus a lot more [effort] locally — less so nationally or internationally,” explained Pomeroy.
LeBoeuf also noted that the U.S. drive markets will likely play a role in the first wave of recovery.
Pomeroy and Farmer also shared that current community-outreach programs will play a role in driving business for their companies once travel begins again. “I’m a big believer that people in [our] markets are going to really value humanity through this crisis,” said Pomeroy.
“What we have been focusing on is right here, right now, and how we can wrap our arms around the healthcare workers — all the frontline workers — and really work on keeping them safe,” said Farmer, explaining that Accent Inns has partnered with United Way to raise money to house frontline workers during this crisis, which has garnered the company considerable goodwill with consumers. “Accent Inns is seen as a real leader in taking care of these people.”
There are concerns within the industry that the pandemic will cause a paradigm shift related to meetings and conferences, but panelists agreed this segment will eventually return.
“This is going to be a longer, slower ramp up [than originally anticipated] and I wouldn’t be surprised if there’s no significant group gatherings in 2020,” said Pomeroy. “[But,] I feel the desire for human connection will be greater than ever. People may pick and choose more so which events they want to go to now, but people are really going to want to go to events — they’re really going to want to connect with people.
Appleton noted that the return of conferences would also be impacted by government support measures, adding, “Yes, some of us are learning to communicate [with new methods right] now, but I don’t think it’s the preferred method for any of us.”
Looking toward recovery and what it will likely look like, panelists agreed that the industry will likely take longer to recover than the overall economy.
“Even when the crisis is over, I think, the hotel industry is going to suffer longer,” said Farmer. “I have talked to a number of hotel owners who are actively thinking about repurposing their hotel into condos or seniors’ facilities.”
“I also think that there will be a decrease in business travel,” Farmer added. “I agree there’s going to be a pent-up demand, but…[I don’t think they will be] travelling the same as they did in 2019.”
Most were slightly more optimistic, but agreed that recovery would be a long road ahead. “[This year] is already in the bag and it’s going to be pennies on the dollar in revenue,” said Appleton. “But we’re going to use our time and our efforts to be ready for 2021.”
“I think we will see some recovery in 2021,” agreed Pomeroy. “[This year] is going to be very difficult and I don’t think we’ll see any sort of normalcy until 2022 — on a global or national travel scale. It’s hard to imagine people wanting to stuff themselves in planes anytime soon.”
“[The] onus is on owners [and groups] to make sure they’re holding rate…as we know the ADR takes so much longer to recover,” McLuskie added.
Much of this recovery will also be shaped by government measures, of which many have put great faith.
“Both [the Prime Minister] and [Finance Minister] consistently reference our sector in press conferences; they’ve signalled there’s going to be additional support for those who have been hardest hit and that’s precisely what we’ve been pushing for,” shared Grynol.
“There will be stimulus/relief programs for our industry,” agreed Appleton. “There’s a lot of chatter going on in the background. They’re asking the right questions. The relief will come.”
“Our biggest focus in these immediate days…is to keep our keep our hotels alive and afloat and solvent and make sure that they can reopen at the end [of this] because there is no recovery if that doesn’t happen,” added Grynol.