The toughest time in the hotel industry: opening the door is to lose money and only waste food and materials

category:Finance
 The toughest time in the hotel industry: opening the door is to lose money and only waste food and materials


This hotel in Dujiangyan City has about 200 rooms, which can provide accommodation, catering, hot springs and conference services. The total number of employees is more than 200. According to the Convention of the past years, Spring Festival is the golden time for performance to soar.

But I didnt expect to see the new coronavirus spreading all over the country, which led to the cancellation of all orders, and the hotel gave the guests a free refund. Now some of these ingredients are used for staff meals, and a large number of ingredients may only be wasted.

Stop or hold?

At present, Dujiangyan local hotels are still in business, mainly large-scale hotels, local popular hotels and Hotels with state-owned background.

Even if other small hotels shut down, they still have to face costs such as staff salaries and rents.

According to a sample survey data of the hotel industry, affected by the epidemic situation caused by the new coronavirus, since the Spring Festival, the occupancy rate of major hotels in China has declined by more than 80%, and many hotels have less than 4% occupancy rate. It is lower than the occupancy rate of 30% - 40% during SARS in 2003.

Zhao Huanyan, chief knowledge officer of Huamei consulting agency, calculated a sum of money: Based on 400 rooms of a hotel, a hotel costs 150000 yuan a day to operate, 120000 yuan if it doesnt open, and the total cost of some large-scale hotels can reach 500000-700000 yuan a day.

If the hotel is closed temporarily, although the cost can be reduced relatively, there are still intangible losses. Opening again after the epidemic is equivalent to coming back again. Especially for the customers, the longer the customs are closed, the greater the impact, and the customers forget you. Said Du Ningyu.

It may also involve employment stability, if the hotel continues to stagnate, employees can only get the minimum wage, and may change careers. He said.

At present, Du Ningyu has taken some measures to control the operation cost of the hotel. On the one hand, he has shut down the restaurants, hot springs and entertainment equipment of the hotel, so as to keep the most basic accommodation function; on the other hand, he has reduced the labor cost as much as possible, reduced the number of on-the-job employees, and maintained the basic operation. He plans that in the future, the wages of the employees on duty may be paid at a certain discount. The employees who rest at home, under the condition of ensuring the continuous payment of social security, will be provided with a minimum wage not lower than the local minimum wage set by the local government.

After receiving the notice from the local social security bureau, the payment of social security can be delayed. But for loans, rent and other aspects, we are still waiting for some national policies. He said.

The experience of this fourth tier city hotel also represents the current general situation of the hotel industry.

In Lugu Lake, as the scenic area began to close on January 28, no tourists came in, and the accommodation and inn of the scenic area were basically closed. In the past Spring Festival, the turnover in the past ten days was more than 50000 and the profit was 340000, accounting for a quarter of the annual income. The income of the better Lakeview inn is estimated to be 100000.2 million. This year its zero. The owner of an inn in Lugu Lake told the interface news that there were only a few peak tourist seasons. Even after the epidemic ended, the lost money could not be earned back.

A franchisee of an intercontinental hotel group brand in Xian said the hotel has been closed and will be very difficult in the next two to three months.

Zhang Yi, the owner of a brand owned by a large domestic chain hotel, has 16 stores in Hangzhou, Jiangsu and Shanghai and is still in operation. In previous years, the occupancy rate during the Spring Festival was more than 95%, and the rooms were basically full from the second to the sixth day of the first year. Occupancy has fallen between 95% and 98% this year. Basically, there is no income. Its all expenditure. He calculated all the cash reserves on hand, excluding the rent, and expected to last another two to three months.

Now its not a loss. Its on the floor. It doesnt make sense to look at the revenue figures. But if the business is closed, employees will wonder if the hotel cant go on, which is not conducive to the stability of employees, he said

In addition, if the hotel is closed and reopened, it needs to go through a period of climbing period to reach a stable occupancy level again. It usually takes three months. Zhang Yi said. His daily work now is to hold meetings with employees of each store one after another to urge on-the-job employees to prevent and control the epidemic and ensure their safety.

When the operation is resumed, he will consider to divide the hotel rooms into different areas. Just like the way to control the cost of the hotel in the SARS period, when the occupancy rate is low, he will open some floors for operation and disinfect some floors.

How many hotels in the country are temporarily closed? At present, there is no complete statistics. But one or two can be seen in the official circulars of various provinces and cities.

37 star hotels in Jiuquan City were closed. In Luan, Anhui Province, there are 1321 tourist star hotels checked out. Chuzhou Citys withdrawal involves 4.48 million yuan. Anshun, Guizhou, 12 star hotels, all closed as required. Hulunbuir city has closed 102 class a tourist attractions and star rated rural (Pastoral) tourist reception households. In Huaian City, 15 of the 23 star hotels in the city were closed, and 8 star hotels adjusted their business hours and service items. Ordos City, the citys 29 tourist star hotels, has closed 18.

These statistics do not include small and medium-sized hotels without star rating. For the national hotel chain group listed in A-share market, the stock prices of the first day of the rat year on February 3 all fell sharply, followed by a slight rational recovery.

Generally impacted, which hotels are more risky?

On the evening of February 2, Jiqi, the founder, chairman and CEO of Huazhu group, issued a second internal letter, saying that it was not recommended that the hotel franchisees close their stores. Whether its the tourists who cant go home, or the medical staff or the homeless people in Fengcheng, they need a place to rest, Ji Qi said in the letter.

He said that he understood that hotel franchisees would temporarily close their stores in order to stop losses and reduce losses, but could not sacrifice the interests of employees. In the current situation, Huazhus decision is to retain its employees and not lay off its stores. Jiqi donated all the salary, and Huazhu management donated part of the salary to show support. For franchisees who close their stores and dismiss or dismiss their employees, Huazhu may even consider to terminate the franchise contract when necessary.

Ji Qi suggested that the hotel franchisee could talk with the landlord about rent exemption and rent reduction, or at least postpone the payment of rent.

After SARS, there was retaliatory travel and consumption across the country, and the business of each hotel was unprecedented good. The same kind of retaliatory boom is a high probability event. He said.

At present, domestic hotel groups, such as Huazhu, Kaiyuan, and first-time travel, have all adopted policies of relief and support for franchised hotels across the country. Yaduo Hotel and Dongcheng hotel are fully supporting the epidemic rescue in Wuhan and Hubei, providing support for medical staff and participating support teams.

On February 4, based on the needs of home-based isolation of employees returning home after the festival and reworking of enterprises, the group launched home-based isolation rooms in 60 hotels in 7 cities, including Beijing, Shanghai, Guangzhou, Tianjin, Shunde, Jiangmen, Zhongshan, etc. according to the requirements of epidemic prevention, it was equipped with protective equipment, disinfection and sterilization products and other necessities of life, and was divided into isolation areas.

Hotels that have experienced SARS believe that, on the one hand, hotels that have carried the epidemic will usher in spring, on the other hand, the epidemic will also impact on a large number of small and medium-sized hotels, which may be irresistible.

Du Ningyu worked in hotels in Chengdu during SARS. He remembered that catering, wedding banquet, accommodation and tourism were not completely stagnant at that time. After the outbreak, the hotel industry was shuffled.

Zhang Haipeng, a senior hotel owner in Wuhan, believes that great changes have taken place in the hotel industry in 2019. The market is digging for gold from the existing hotels and the competition becomes fierce. By the end of the year, several economic competitors of the same kind had closed down. Therefore, it is expected to have a greater impact on the Economic Hotels with poor operation in the hotel industry. He said.

According to Zhang Haipengs analysis, hotels affected by the epidemic are also reflected in hotels in the third, fourth and fifth tier cities. Originally, these hotels will usher in peoples new years return tide in the Spring Festival. People will stay in hotels or run banquets and play cards. From the 24th of the lunar new year to the 15th of the first month, business will flourish. But after the impact, the recovery of these hotels is more difficult because of the small capital reserve or the weak operating capacity.

In addition, the cost of Hotels with catering is higher. Originally, they expected the Spring Festival to pay back, but they lost money. For some holiday hotels, the Spring Festival holiday and other peak business accounts for a large proportion, the impact is also great. He said.

Zhang Haipeng believes that after the outbreak, as long as you open a hotel, you can make no loss. Because the hotel location has a large passenger flow, and online booking platform also has a good reputation.

When the whole tourism business ecosystem is damaged, which hotel enterprises bear more losses? Xia Zifan, vice president of hanyue hotel group, believes that full service hotels are more damaged than limited service hotels, and asset light hotel management companies are more under pressure than self owned asset heavy hotel groups.

Full service hotels have a large number of people, large institutions, complete projects, and are usually enterprises with hundreds of millions of assets. At this time, there is no income at all and the cost is quite huge. Xia Zifan said that the limited service hotel has a single business project, low occupancy ratio and less risk.

In addition, its also a special time for small liquor management companies with light assets, if they cant survive, they will face a shuffle or silence. Especially less than 200 development hotel management companies. The cost structure of this kind of hotel is basically 70% of labor, 20% of travel cost and 10% of office expense, which means that labor is the biggest cost of light asset company. Xia Zifan explained.

Some people in the hotel industry analyze the interface news. As a basic service industry for peoples livelihood, the hotel industry is also a labor-intensive industry, which has undertaken a large number of social employment functions of the grassroots people. He called on the government to encourage and call on the real estate industry to reduce the rent for hotel operators. He hoped that the government would give certain policy support in tax and business charges, such as water, electricity, gas, network, television, etc., and set up a special assistance fund for small and medium-sized hotels to help them recover the operation and production as soon as possible.

What else can a hotelier do?

There are still practitioners looking for possible opportunities in the crisis to prepare for recovery after the outbreak.

Ji Qi encouraged hotel employees in her internal letter. During the SARS period, due to the legend that split air conditioning was safer than central air conditioning, many guests moved from high-end hotels to economy hotels in China. In order to save cost, the split air conditioner has become a selling point. Among the hotels still in operation, the technology upgrading invested by Huazhu group in order to improve efficiency has enabled the hotel to basically achieve contactless service and automatic check-in, and also played a role in the prevention and control of the hotel epidemic in a special period.

Zhang Senhua, Chief Strategic Officer of polychrome investment, believes that the feasible self-help way for hotels at present is not only to seek rent reduction and reduce management costs, but also to seek new business growth points through private traffic marketing, so as to rapidly improve occupancy rate after the epidemic.

For example, the multi-color IOT of multi-color investment incubation plans to cooperate with some hotel groups such as Kaiyuan, Meihao and Jinjiang to transform some rooms in the hotel into healthy sleep rooms, install new air system, zero pressure mattress and other equipment, plus the Internet of things technology, to display environmental air quality, sleep quality and other indicators, and use the concept of health to help the hotel improve occupancy rate after the epidemic.

In addition, Zhang believes that after the outbreak, the investor model of Chinas hotel industry can be adjusted. Including low-end economic chains and middle end hotels, most of them are investors who rent properties, and then manage or find management brands to manage them. The anti risk ability of this model is poor, and now middle and high-end hotels are also starting to invest in the second landlord model, he believes, with the trend of leasing properties for hotels and accommodation slightly cooling down, asset prices tend to be reasonable, with a small part Sub investors will consider buying properties to transform and hold hotels. Xia Zifan believes that the bottom rebound after the epidemic is normal, but those hotel owners who choose to temporarily shut down should be prepared for opening at any time, such as regular ventilation of guest rooms, daily disinfection, constant attention to the changes in the epidemic situation, reserve materials in advance, stabilize the mentality of employees, and so on. Once the epidemic situation is over, they will immediately return to business. Only at this time can the hotel quickly resume its business after the epidemic is over if it gathers the whole staffs efforts, keeps calm, strengthens learning, improves skills and is ready to start business at all times. She added. (in the article, Du Ningyu, Zhang Haipeng and Zhang Yi are pseudonyms) source of this article: interface news Author: Zheng Cuiying, Yang Xia editor in charge: Wang Xiaowu ufe50 NF

In addition, Zhang believes that after the outbreak, the investor model of Chinas hotel industry can be adjusted. Including low-end economic chains and middle end hotels, most of them are investors who rent properties, and then manage or find management brands to manage them. The anti risk ability of this model is poor, and now middle and high-end hotels are also starting to invest in the second landlord model, he believes, with the trend of leasing properties for hotels and accommodation slightly cooling down, asset prices tend to be reasonable, with a small part Sub investors will consider buying properties to transform and hold hotels.

Xia Zifan believes that the bottom rebound after the epidemic is normal, but those hotel owners who choose to temporarily shut down should be prepared for opening at any time, such as regular ventilation of guest rooms, daily disinfection, constant attention to the changes in the epidemic situation, reserve materials in advance, stabilize the mentality of employees, and so on. Once the epidemic situation is over, they will immediately return to business.

Only at this time can the hotel quickly resume its business after the epidemic is over if it gathers the whole staffs efforts, keeps calm, strengthens learning, improves skills and is ready to start business at all times. She added.

(in the text, Du Ningyu, Zhang Haipeng and Zhang Yi are pseudonyms)