Low Occupancy Solutions and Opportunities
Almost 65 percent of hotels worldwide are either at or below 50 percent occupancy. This percentage is considered below the threshold at which hotels can pay for their debt or break even. Lack of tourist inflow means low occupancy in many existing hotels, causing investors to hesitate. Low occupancy also gives way to a drop in demand for new developments as existing hotels maximize efforts to keep revenue flowing.
To combat this issue, assess your indoor and outdoor space. Can it be repurposed and marketed to a different sector? Unused hotel rooms and meeting space can be a safe solution to a lack of self-contained office space, allowing employees to safely return to work without the risk of unnecessary contact with others. Consider renting long-term, especially if your property has rooms with kitchen or kitchenettes and other useful conveniences. Many need a change of scenery at this time or a place to work away from home, but not at the office.
An often overlooked benefit to lowered interest in finalizing hotel real estate deals is a coordinating drop in price. The pandemic will end and at that time, those who have already signed papers will be in the best possible place to reap the reward of a dramatic increase in property value.
Increased Safety and Hygiene is Here to Stay
By now, most hotel owners have invested in new equipment and/or technology to help keep the hotel in ultra-clean condition. Guests have always appreciated a clean hotel and they appreciate hotels have been taking the matter much more seriously. Continue to train staff to clean at a microscopic level and invest in contactless technology as these parts of the new normal are here to stay. The reward will be an increase in guest satisfaction.
A Decrease in Foreign Investments Means Incredible Opportunity
There was a strong appetite among foreign investors pre-pandemic for buying luxury hotels in very desirable locations such as major gateway cities. However, since economies have suffered worldwide, this has reduced foreign investments in hotel development projects. The bright side for US investors is that there is less competition at the moment and deals to be had. Investors are more likely to fund domestic projects during a crisis to contribute towards their economies so while foreign investors are funding projects in their own countries, you can be doing the same here at home and providing much-needed fuel for our economy.