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Navigating Adversity: Pomeroy Lodging

What have been the immediate impacts to your hotels since COVID-19 first hit and government made it mandatory to shut down business?
In the first few days, in terms of our larger, full-service, group-business hotels, there were cancellations coming in like crazy for events happening in real time. Before any government-mandated initiatives were put in place, we had already started meeting daily as an executive team and had assigned people to handle different parts of our COVID-19 response, such as stakeholder relations, cash-flow forecasting, people leading, government aid and customer and employee communication.

We did some forecasting early to understand how much liquidity we had to survive and what operating would look like in that environment. And it was pretty dire. I don’t think any business forecasts typically assume revenue at zero. We immediately made the decision to not close hotels, but to operate with staffing levels as though they were closed and just take the small amounts of business that may be available until we know what’s happening. So, we pretty much immediately moved to a large number of temporary layoffs and our entire executive team took significant salary rollbacks. We employ about 2,000 people currently and more than 1,600 people have been laid off.

How many properties did you close?
We closed three of our properties, including our resort in Alaska, because the inherent experiential nature of a resort was really tough with restrictions, and we saw demand drop off dramatically to where we were selling no rooms. We also closed a hotel in Dawson Creek because we have two hotels in that market. But, other than that, we chose to stay open [because] if you can cover your labour costs, all the other costs you’re going to pay any way. We believed it was better to try and stay open because nobody really knew how long it would last or what types of business opportunities there could be. And we obviously want to employ as many people as we could and we thought, when you close down, the decision to re-open is much different than staying open and adding people. We came to the conclusion that if we shut all these hotels, how much good news are we going to need to want to re-open because, likely, you’re going to re-open and lose money. So, we figured it was in our best interest to stay open, make the best of it. And I think that’s been the right decision.

From what markets are you drawing guests?
We have some healthcare workers staying with us who want to isolate from their families. They’re not sick, but they don’t want to risk going home. A lot of our properties are in resource-driven markets and there’s still lots of resource work happening, such as pipeline projects and a hydroelectric dam being built in Fort St. John (B.C.).

How will the hotel business function moving forward?
One of the key things is everyone in the hotel industry has to re-define what staying in a hotel means and what the priorities of our service are in a post-COVID-19 era. We’ve implemented — above and beyond what any government mandate or brand guidelines were — almost immediately with regard to building, cleaning and safety protocols. And we’ve already developed online training programs that we run [staff] through that look at how we’re going to operate in food and beverage, how we’re going to clean the rooms, how we disinfect and clean all the solid surfaces and high-touchpoint areas and physical-distancing markers and signage. At the property level, we were able to secure a lot of PPE to prepare for the re-opening, so all the staff will be wearing masks.

It was going through and until seeing what the experience looks like and getting people comfortable with the fact that, operationally and economically, the way we re-introduce our product will need to be staged as if it was closed down. So, in a resort where we might have five restaurants, you can’t reopen five restaurants now — no business can — you’re going to have one restaurant. It will affect the experience, but people’s expectations will be re-adjusted as well. We’ve sort of re-invented everything, including the way you would measure staff productivity and costs within our labour models — not basing it on revenue, but on the number of rooms we’re selling and appropriately staffing for that number of rooms, a minimum number of rooms, and moving up thresholds from there.

We’ve also done a lot of cross training, so everyone who has remained employed is learning how to do a bit of everything because that’s what you’re going to need to survive through this — you have to be very nimble and agile when it comes to maintaining smaller teams. And those teams have to be diverse so that all those people can get enough work.

You have to be prepared to adjust and re-write your own rules on a regular basis. If you’re so in love with the operating system you’ve dealt for 20 years because you just perfected it, you’re just going to be constantly disappointing yourself. For us, we’ve just said, business will never be the same as it was, so we have a brand-new business — how would we operate the business we have today? What we did in the past, we can use, but you certainly can’t be married to it.

Have you launched any community initiatives?
The healthcare workers are staying [at really low rates]. In our hotel in Alaska, the hotel was closed, but we did leave it open for just [healthcare workers]. We blocked off a certain number of rooms and had a certain protocol so those people could come and stay with us. We’ve also donated to several food banks in different communities — about $20,000 worth of food. At some of the hotels, we’ve been doing frozen meals for senior’s homes so [residents] have a diverse offering and another option.

What’s your advice to other hoteliers?
I think about what’s going to help us survive. You have to be willing to accept and embrace your current reality, not your preconceived notion or metric of what success looks like. The only way to stay positive and move forward is to focus on the momentum you’re building; focus on where you’re going, not where you’ve been. It’s about putting to rest your former business and accepting that you have a new one. And that new one is probably not nearly as healthy or vibrant as your old one, but it’s your job to grow it from where it is.

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