What Will Become of The Hotel Industry?
When There Are No Travelers, What Will Become of The Hotel Industry?
Marriott Hotel General Manager Bruce Winton is positive that the industry is on the road to recovery.
By Anne Ruth De la Cruz
Published October 30, 2020
If you need a hotel that can accommodate 2,000 guests, the go-to place is the Ballroom of the Marriott Hotel. The COVID-19 pandemic, however, has shut down the ballroom indefinitely as big gatherings are not going to happen any time soon. In fact, the hotel has suffered a 75 percent drop in overall revenues for the year. Marriott Hotel General Manager Bruce Winton says that Marriott experienced a 90 percent drop in revenue per available room around the world in April 2020.
“It’s quite bad but it is slowly but surely starting to get better. Our ability to operate is actually the crux of the matter. We are tied hand in hand with travel and that is going to be our biggest obstacle moving forward. The opening of domestic travel as well as international travel will take some time,” Winton said.
Due to the community quarantine, restrictions have been imposed on the hotel industry “on the ability to take certain types of reservations.” Marriott was limited to accommodating stranded travelers, long term guests, returning overseas Filipino workers and outbound travelers who need to be tested for COVID-19 prior to boarding and “have to wait for the results in a secure facility.”
Flexible partners
This pandemic has given Winton the opportunity to assess their partnerships with various companies and one such partnership is with Meralco. He describes Marriott’s relationship with Meralco as “an open and understanding relationship.” In fact, the Meralco team has been constantly asking how they could be of assistance to Marriott.
Marriott, according to Winton, has been enjoying “a reasonable rate” from MPower, Meralco’s Local Retail Electricity Supplier, and that they have been working together to come up with the best outcomes for Marriott’s complex which consists of a number of buildings with contracts that started in different times.
“At the end of the day, the most important thing is flexibility, understanding and listening. No one has been more impacted than us but obviously Meralco’s business is also down,” Winton said. “So I think being partners and being understanding about each other individual’s situations is very important and Meralco has been very good at that.”
Additionally, the GMBD suspension implemented by Meralco helped generate more savings thereby contributing to the hotel’s efforts to keep their employees.
“You know any savings, any sharing of the burden with our business partners was gratefully received of course. There has been a good deal of solidarity and sharing of this economic burden across our partners. We certainly appreciate that,” Winton said.
Having a partner like Meralco has also inspired the team from Marriott to continuously look for ways to reduce and manage energy consumption. Some of the initiatives that the team has implemented is a chiller maximization initiative and 100 percent transitioning to LED lights in the hotel.
“We have our energy conservation committee that is represented by every area of the hotel. We want everybody on our team to understand the importance of energy conservation,” Winton said. “So it starts from the day you are hired and we spend a good part of our orientation program talking about our energy conservation initiatives and our green initiatives that we have in our hotel.
The hotel industry took a heavy beating during the pandemic, but Marriott Hotel is pulling all the stops to make sure that both its employees and its guests are safe.
Safety first
Marriott also implemented strict policies and procedures for the safe operation of the hotel. These procedures covered everything from personal protective equipment (PPEs) that the hotel staff had to wear, the sanitation and cleaning and the operating procedures for the food service, food preparation, and housekeeping.
The policies and procedures were the product of collaboration meetings between the hotel industry and government institutions like the Department of Tourism, Department of Trade and Industry and the Inter Agency Task Force for the Management of Emerging Infectious Diseases. Additionally, Marriott International had formed a Global Cleanliness Council including experts from the fields of medicine and public health to supplement and further enhance their protocols through +200 steps of the guest’s physical journey through the hotel space.
“People go to hotels because for a number of reasons but generally, they go there for the hospitality experience and that is our challenge now,” Winton said. “You are talking to people through four to five layers of PPE. How do you smile? How do you make people welcome, comfortable and all these things you know? You have to understand that what we do now is safety first. It has not been easy for everybody."
No employee retrenchment here
Winton reported that Marriott had come up with strategies to keep to take care of the team during this extended downturn in business. These strategies included using up all sick and vacation leaves and providing financial assistance to the entire team for several months. It helped that their partners were pro-employee and very supportive of the management team’s ideas.
“Having said that, however, we have reached a point where we have to be self-sufficient again,” Winton said. “But we are looking forward at our various sources of business to basically keep people working. Our primary goal has been not to make profit but first and foremost to keep people working.”
To make ends meet, Marriott “has been doing a lot of offsite catering.” They have managed to close a few catering contracts but whether this will sustain the hotel in the long run is another question.
“We do see that it is a long, long uphill road to recovery for the business so we have to continue to be creative,” he said. “When you talk about 75 to 80 percent impact on the revenues, you can just imagine that there is some pressure, so we certainly hope to be able to sustain the work force in the future as well and as much as possible.”
"Our primary goal has been not to make profit but first and foremost to keep people working,” Winton stressed.
Looking ahead
As for the outlook for Marriott in 2021 to 2022, Winton admitted that he and his team have not been able to agree yet on the targets for the next year.
“I can’t give you a number but we are looking at things for next year as what percentage recovery versus 2019 business can we expect market by market. That is kind of how we are looking at it,” Winton said. “The year 2020 is just a bust. As soon as we close the door to 2020, we are done. We are however going to take the learnings of 2020 forward to ensure we remain agile, lean and creative, ready for future challenges that inevitably lie ahead.”
As part of their efforts to assist in the reopening of the hospitality industry sector, Meralco initiated catch up engagements with the hospitality sector. So far, Meralco already met with other hotel operators and there are plans to do more of these meetings in the future. Discussed during these meetings were the key trends in the hospitality sector that were emerging, how the industry will adapt to these changes and how Meralco can help support these changes.
To jump start the tourism industry, Winton said he is just waiting for Metro Manila to be placed under Modified General Community Quarantine as this will allow hotels to accommodate guests and to entertain event bookings at 50 percent capacity. He is also waiting for domestic travel to resume so that the tourism industry can slowly pick up the pieces. The latest data indicates that 85 percent of tourists in the Philippines are domestic travelers while the rest are foreign travelers.
In addition to pushing for the resumption of domestic travel, Winton sees the need to build customer confidence as well. “So how do we build the confidence and also create the experience? People go out to meet, eat or whatever for the experience,” he said. “It is going to be hard so at the moment, what is important is that we are looking to see how we can fulfill the needs in the way our customer actually wants it at the moment.”
When asked about his views on the slowing down of foreign investments in the Philippine hotel industry, not too many people know that it is the local hotel brands that have been the driving force behind the Philippine tourism economy. There are a lot of opportunities for them because it is going to be a domestic driven business for the next couple of years.
Foreign and international hotel brands will have to think long and hard before investing in the Philippines because of the challenges that the industry has been facing for the past six months. These brands will also look at how the government has handled the pandemic and a natural disaster like the Taal Volcano eruption in January.
For now, Winton said he and his team will continue to look for creative ways to create more business opportunities for the hotel. The sooner the restrictions ease, the sooner the hotel industry will start its road to recovery.
To learn more, contact your Relationship Manager, call 16210 or email us at corporatepartners@meralco.com.ph.
Story originally posted on Power Club.