Hotel Crisis Management Issues

As hoteliers and management chains globally are creating strategic action plans given the worsening novel coronavirus outbreak. We’d like to share a document released by Withersworldwide (with permission).

The following summary addresses what is important to hotel owners, operators, chains, employees and guests and is a must read for industry players –

Global mass movement is one factor in the spread of the 2019 Novel Coronavirus, which at the time of writing has reached 24 countries outside China. The tourism and business travel sector which supports that movement quickly feels the pain when there is any constraint on international or local movement. In many markets, passenger flows and property occupancies have weakened as travelers, businesses and governments make hard choices. Preliminary data from STR is showing that hotel occupancy in mainland China declined by 75% in the 2nd half of January.

The Maldives has just joined the list of countries banning Chinese visitors for now. With China being their largest tourism source market, that is not a decision that the Maldives authorities will have been taken lightly. Airlines and cruiselines are also facing some very direct effects.

For the travel sector in Hong Kong (2019 protests) and Australia (bushfires) in particular, this comes at an already challenging time. It is likely some businesses will face cashflow difficulties, including as they are asked to refund deposits and payments taken on advance bookings. 

More broadly, it is already clear that 2019-nCoV is a downside risk to the Greater China economy, and on a more diluted basis to the global economy. The Economist has reported that China’s growth in the first quarter could fall to as little as 2%, from 6% before the outbreak. Retail trading (bricks and mortar) across Asia has been impacted, with foot traffic at shopping centres well down. Major landlords in China are announcing up to a month’s rent holiday for their tenants. 

What are we seeing?

Businesses in the hotels and resorts accommodation sector are focusing on 2019-nCoV at a number of levels: health and safety, trading performance and more strategically. Our hotels and hospitality team is supporting a number of clients as they work through the short and longer term implications of this epidemic. 

We have set out below some of the matters hotel operators and owners may like to consider as they seek to manage the impact of 2019-nCoV.

As an employer…

Workplace legislation in most jurisdictions imposes a duty to look after the health safety and welfare of employees as far as reasonably practicable, so we are seeing that as a key focus. Some concerns are less obvious at first glance – discrimination against perceived Chinese nationals and data protection issues around health declarations from clients and employees. 

To read and download the full document CLICK