HOTELS AFTER CORONA
Any tunnel will come to an end, so we may safely assume there is also light at the end of the Corona tunnel. Whether hotels will come through alive, depends on their current cash flow status.
Hotels are a funny type of business, as in reality, a hotel is a bundle of two different businesses. There are the hotel operations which deal with the staff and the guests, and there is the real-estate part of the business which deals with the investment.
Many hotels which have now closed will likely also stay closed because their owners have given little thought to how these two different sides of businesses connect – and falsely put their hope in solely focusing on the real-estate side of the business at the cost of the loyalty of their disposed staff and guests.
Characteristics of such hotels are…
- Having spent all available cash on the investment only, thus no funds to retain staff
- Having no long term exit strategy, managing by the day only
- Relying on bookkeeping data, instead of proactive strategic forecasting
- Blaming all on the others, such as OTA’s, VAT and the Chinese…
One way out of a depressed cash flow status is to seek external investment or to sell the hotel. This may be a tough choice but can secure the financial existence of an owner.
To do so, hotel owners must define a truthful and realistic value of their business, as it stands right now and how it can be improved. Setting such value requires professional help.
My team and I have helped many hotels in western and central/eastern Europe in managing their hotels as a business. We can put that experience to use, for you to secure and sustain your investment.
Please, visit us on www.gransier.com, or contact us at welcome@gransier.com
Stay safe, and have faith.
Raoul Gransier