Independents had their share of challenges during 2020, such as lacking purchasing power and the ability to do contactless check-in, but they’ve also leveraged their skill of adapting on the fly.
REPORT FROM THE U.S.—While many of the challenges independent hoteliers faced in 2020 were the same faced by all hoteliers, there were some unique obstacles as well as opportunities that favor their nimbler DNA.
Sarah Eustis, CEO of Main Street Hospitality, said the hardest part of 2020 was laying off staff.
Sarah Eustis, CEO of
Main Street Hospitality
But as Main Street Hospitality is a smaller company like many in the independent segment, Eustis said the company has had some challenges dealing with vendors and procurement independently.
“We had to pump the brakes hard … negotiating and figuring out how to spend every penny because every penny is critical. When you’re part of a big brand network, there (is) sometimes more leverage than perhaps independents (have) with the vendors,” she said.
She added the forecasting and reforecasting process has been a challenge. The team’s VP of performance, who does revenue management and works with financial planning and analysis, “led us through 100 iterations of budgets … and some of them are a wild guess. We have no idea how people are going to behave.”
Angela Harrington, who owns two independent hotels in Iowa, Hotel Grinnell and the Highlander Hotel, said there’s been three times since the pandemic started in March that she has been “45 days from running out of cash … with two or three guests a night. And what once was 30 weddings on the books, down to zero.”
“If I didn’t have a fantastic lender who has my back … I would have closed very soon after the pandemic. My loans are on forbearance until June. I believe we will start recovering in June,” she said.
Angela Harrington, owner of
The Highlander Hotel and
Harrington said she can’t imagine very many hotels will be able to survive much longer if there isn’t another round of stimulus. President Donald Trump signed a $900-million COVID-19 relief package on 27 December that extends unemployment benefits and the Paycheck Protection Program, along with $600 per person direct aid.
Ron Loman, SVP of operations at Real Hospitality Group, said one of the early issues his independent hotels faced was obtaining PPE. Because the brands have purchasing power, they were able to quickly fulfill those needs.
Aside from purchasing power, he said it also varied by market. Some markets were able to get PPE quicker than others. Real Hospitality Group had to rely on partners to get equipment.
SVP of operations,
Real Hospitality Group
Loman said the other ongoing challenge is implementing contactless check-in.
“The independent hotels didn’t have that ability,” he said, adding his team looked for some creative solutions like checking guests in from their cars in the parking lot or placing guestroom keys in old fashioned mailboxes.
His portfolio also had hotels that closed.
Opportunities, wins for indies
Despite obstacles, the independents also saw avenues of opportunity and accomplished some wins.
Eustis said her company was still able to open its Hammetts Hotel in Newport, Rhode Island, in June, which was five years in the making. Main Street Hospitality is the operating partner for the hotel and worked on its development.
“We debated whether to continue with the opening or to pause it during COVID. We collectively decided to proceed, and (it) exceeded expectations from the very beginning,” she said.
The following month, her company assumed management of the Seven Hills Inn in Lenox, Massachusetts, which is anticipated to bring wedding business to its books.
“To add two new properties into our portfolio and open them right in the middle of the pandemic, we felt pretty proud of that,” she said, adding forthcoming openings include The Beatrice in Providence, Rhode Island.
Harrington said when she opened the Highlander in July, it was “dead last on TripAdvisor, in the whole entire city, and now we are No. 3,” adding that her team is excelling at service.
Typically, service is the worst when the industry is at its slowest, she said. But her now-leaner team is determined to surprise and delight each guest.
Because demand has been so low—with as few as one guest for a night— Harrington’s properties started implementing day passes for pool access, while still limiting the number of people to keep guests safe, and hosting watch parties for events to help drum up business.
Roy Madhok, VP of revenue management at Real Hospitality Group, said his team leaned into creative packages, as well, leaning into independent hotels’ ability to be flexible and act on the fly, capitalizing on what’s going on in their localized markets.
VP of revenue management,
Real Hospitality Group
For example, some hotels in his company’s portfolio have benefited from staycations while others saw opportunity from pet packages or “gym in the bag” packages.
“Those are small items that have come to light,” he said.
He said he might have written off those types of packages as cliché prior to COVID-19. But now they’re vital.
“If I can get 20, 30 roomnights a month out of a gym in a bag package, then it’s great,” he said.
Most brands are limited to promoting packages only on social media. The advantage for independents is their ability to promote packages on both social media and direct websites, he said.
“On independent hotel websites, I have the ability to change messaging, pop-ups, notifications, I can send people emails or text messages, etc. That has been a big advantage for independents,” Madhok said.
Loman added that his team can consistently pick who they want to communicate these offerings to.
Harrington said many of the business and marketing tactics hoteliers relied on for years have not worked the same during a pandemic. But she went into this downturn with lessons from the Great Recession in mind.
Advice that she suggests for other independent owners is: “Act decisively and quickly … and cash is king. I believe you have to keep going one foot in front of the other and try not to go dark because it’s so difficult to then to get across to the public (if you relaunch).”
Another lesson she learned is the best investment an owner can make is keeping the best people employed and engaged. She said there’s been many times when she could have laid off the entire team and ran her properties herself but investing in her core team across both hotels was paramount.
The pandemic also provided an opportunity for her to cross-train her team.
Loman said learning to be nimble and creative, both in offerings and in execution, as well as cross-training associates will help carry his team into 2021. He said the key is to be productive in a lot of areas with one person.
“That’s gold right now. You have one person that can do five jobs versus three people that can do four jobs. That one person is very valuable to the operation,” he said.
Eustis said going through a crisis like the COVID-19 pandemic not only brings out the strengths in associates, but it also shows who people are, and whether they’re really committed for the right reasons.
“I’ve been profoundly impressed by people working at reduced salaries, people working different kinds of hours, adapting to yet another protocol change,” she said. “But it allowed us to dig deep on our culture.”
Madhok added the current environment has served as a wakeup call to the hotel industry as it lags others in embracing technology. Within his department, he said he looks every day at which new technologies he can implement to make guest services and team operations more efficient.
For more on how independents fared throughout 2020, read these HNN stories below:
- Summer months buoyed US independent hotel performance
- Pacifica Hotels CEO on enduring industry ‘correction’
- Schrager expects return to normal ‘we’ve always had’
- Curator launched to leverage scale for indies
- Where indie marketing priorities stand for rest of 2020
- Asset managers’ outlook for boutique hotels
- Lenders discuss challenges in boutique hotel financing
- Seasonal independent hotels adjust to delayed start