Assetsoft - Blog #Hotel

Hotels and Post Pandemic Asset Management to beat the pandemic

Fri, 08 Jul 2022 12:04:48 -0500

Among all kinds of real estate, hotels and related retail businesses have seen the most disruption due to the pandemic. Neither families nor corporate companies had enough budget to spare on trips and tourism. This led to the hospitality and hotel industry taking a significant hit, with many hotels being closed down for business for months.

According to USA Today reports, even big hotel tycoons like Marriott had more than 25% of their hotels closed worldwide due to the pandemic. This definitely had short-term impacts like loss of jobs and lack of business, and massive loss of money. But these trends and the pandemic had many long-lasting effects too. What were they, and how can better asset management help get through this crisis?

Are you a hotel real estate owner or property manager who is still feeling the grilling effects of the pandemic? Is your business still suffering from the two years of the pandemic even when the COVID cases are going down? Well, you are not alone. The pandemic has left some significant impacts on the hotel industry, but they are not unbeatable.

Find out how you can steer through this problem and become more assertive on the other side of the pandemic.

Impact of COVID-19 on the hotel industry

According to the reports by the US Travel Association, travel expenses were reduced by 42% from 2019 to 2020. That was more than a $500 million loss in business for the hospitality industry. International and corporate stays in hotels suffered the most among these.

But the reports in 2022 look much better. Travel expenses in 2022 have increased by 3% over the 2019 yearly spending, which is a major and positive change after the two years of the pandemic. According to NRP research reports, 2020 was one of the worst years for American hotels. They saw only 44% occupancy till the year-end. This led to a lot of job loss, and many hotels closed doors permanently. The picture looked quite grim for the hotel real estate owners due to this steep fall in business.

Post-pandemic hotel real estate trends

Though the situations were challenging, the pandemic gave rise to many trends in the hotel real estate market and hospitality industry in general. Check them out.

Discounted sales are rising; this includes package deals and long-stay options to attract more customers and let businesses get back some of their money. Many hotels are giving such offers to stay afloat and not permanently close doors.
Virtual customer experience is on the rise. This includes virtual room tours and self-check-in facilities for customers to promote social distancing norms.
Sustainable real estate in the hotel industry is becoming more critical than ever. From energy-efficient projects to health and wellness tours are some of the demands customers have had from tourism ever since the pandemic.
Technology implementation plans to help manage hotels and customer relations virtual project management. From installing the correct CRM software to connecting with customers to using AI-powered devices to upgrade customer services, hotels are going through a lot of changes.

Handling the post-pandemic situation

Recovering from the two years of the negative impacts of the pandemic is not an overnight task. It needs careful strategy and leadership planning, and impeccable management to get a hold over the situation. Here are the best ways you can handle it.

Asset management

The assets you already have has to be rethought and differently used to increase the optimization of resources. You can use AI-powered tools and data analytics to predict customer behaviors and buying patterns. You can also change your hotel renting policies to accommodate the workation crowd. This crowd demands leisure and formal work atmospheres at the same place.

Due to the increase of remote workers, the demand for workation spaces is also increasing. You can revamp your hotel spaces a little to make a workspace inside the hotels and cater to these crowds.

Impactful marketing

The present world of business is all about marketing, especially when it comes to hotels and tourism. You must strategize and market your hotels across social media and promote your USP. Give your customers real-life updates about the COVID safety policies and how you have changed your business to best suit the customers' needs.

Revamping guest and service experience

Followed by the marketing, you also need to make real changes in your hotel services to gain back customer loyalty. Following hygiene norms, social distancing, and staff vaccination are some of the essential things that are a must for hotels to stay in business. You can try to change the layout of your hotels to do this if your old setup does not allow social distancing practices.

Cash flow and financial management

Liquid cash management and stabilizing cash flow are one of the biggest things in the hotel industry to stabilize everyday workflow. Without a stable cash flow, the general financial conditions of the business suffer and disrupt business. You need to employ a proper accountant or integrate back office accounting software to streamline the process and never run out of in-hand cash.

Staff management

With the proper selection of technology in project management, you can easily handle staff management from remote locations. You can keep track of your staffs whereabouts, their sales reports, and their general performances and communicate with them via the software dashboard without constant physical contact.

Employing property and asset managers

If all of these new trends and the added work due to these trends seem a little overwhelming for you to handle, you can easily hire property managers and asset managers to take the load off your shoulders. If you do not have the budget to employ new people for these tasks you can also integrate software solutions into your existing systems to streamline the management process.

Make Asset Management Easier with Assetsoft

Though no predictions or market statistics are sure when the hotel business or its associated hotel real estate will return to its original “pre-pandemic” state. But do not let these new trends intimidate you; rethink your strategy and leadership to keep these trends working to your advantage.

At Assetsoft, we can help you integrate the right technology, plan project management in line with all these trends, and help your business soar. Talk to us soon to find out more about our services.

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Canada's Hotel Industry Seems to Rebound in August

Mon, 13 Sep 2021 01:07:15 -0500

With the pandemic waning, most of Canada’s provinces have reopened using a step-by-step approach. For the country’s hospitality industry, this means more people, tourism, and revenue.

Last year, the hospitality industry was one of the hardest-hit sectors due to the pandemic. The hotel occupancy rates plummeted to an all-time low in April 2020, with 81.2% of the hotels being vacant. Now, the industry is already seeing a gradual recovery, with Toronto hotels having a 43% occupancy rate in July.

Adding to it, the Canadian government has introduced new measures which allow more tourists into the country. With these guidelines, more international tourists are willing to visit Canada for business and leisure. What does this mean for the Canadian hospitality industry? Read on to find out.

What was expected?

The sudden travel ban due to Covid-19 forced hotels to shut down or work on a low revenue. As the sector hit rock bottom, many industrialists were hoping to drive occupancy in the coming years. A study by HVS predicted a 15% rise in the market value of the Canadian hotel industry in the year 2021.

Hotels attempted to reduce losses by offering rooms and services at a discounted price. Yet, due to the Covid crisis, not many preferred traveling or staying at hotels. But, as predicted, 2021 has been a promising year for the hospitality industry.

According to CBRE, a commercial real estate company, hotel occupancies across major Canadian cities will range from 31% to 37% this year. Though these rates are far from pre-pandemic times, they are showing a gradual increase when compared to the rates in 2020.

What boosts the recovery?

With the vaccination rates increasing all over the world, more people are open to international traveling. Several countries, including Canada, have eased the guidelines and allowed international tourists to enter the country. From a surge in leisure tourism to essential business travel, many factors are boosting the hospitality industry in Canada.

Reopening of provinces

The country is gradually reopening provinces using a methodological approach. Some states are in the last stage of reopening, while others, like Ontario, are in the second or third stage.

Residents are seeing it as an opportunity to travel within the country. Boosting the revenue of the hospitality industry. A report by CBRE states that domestic travel is the key to driving hotel occupancy, with a 75% to 80% share in the total tourism revenue of Canada.

Provinces like Ottawa are coming up with programs to boost tourism. Hotels in the province are offering packages at discounted rates, especially for advance bookings.

International tourism

Canada welcomed the U.S. citizens and permanent residents back into the country starting August 9th. Lifting a 17-month travel ban across borders, the country mandated all travelers to be fully vaccinated.

Later, on Sept 7th, the Canadian government introduced new guidelines for international visitors from other countries. The measures make it easy for tourists, both essential and non-essential, to travel to Canada. Out of the several guidelines, visitors are required to produce a Covid-19 molecular test report and also be asymptomatic.

As international travel reopens, the industry counts on “revenge travel” by tourists who couldn’t travel during the pandemic. Even otherwise, the country can expect a surge in the hotel industry revenue due to non-essential travel.

Essential business travel

Business travelers from across the world want to travel again to boost their business. Many believe that their business will suffer without traveling. A survey by SAP Concur reveals that 96% of the participants are willing to travel for their business in the next 12 months. Among them, 36% want to stay in hotels on their next business trip.

What does the industry want?

Even though hotel occupancy rates are gradually rising, the hospitality industry is facing new problems. Several hotels are unable to return to the pre-pandemic condition due to the following reasons.

Labor availability

As the industry revenue plummeted, many hotels laid off employees due to the lack of business. Now, as the business recovers, hotels are finding it difficult to rehire staff. Very few have returned to their previous company and many have joined other businesses during the pandemic.

Vaccine Passport

The hospitality community is also pressing for a vaccine passport to keep its employees safe. Hotels will treat such passports as proof of vaccination, and allow customers to enter restaurants, lodges, and other buildings.

As the hospitality industry requires close interaction between people, a vaccination passport is essential to maintain the health of all its employees. As Tony Elenis, president of ORHMA, told CBC, vaccine passports are one of the most efficient ways to protect the industry from another lockdown in the face of the delta variant.

What can we look forward to?

Many industrialists believe that the hospitality industry will see a full recovery in the coming years. The HVS Hotel Industry Outlook report predicts a return to normalcy by the year 2024.

Even though tourism is increasing hotel occupancy, considerable revenue only comes from large bookings such as meetings and conventions. Currently, hotels are receiving fewer bookings from smaller groups for events and meetings. But larger conventions are generally booked in advance, hence, hotels are looking towards 2022 or even 2023 for considerable business.

Additionally, hotels are also relying on the increase in vaccination rates to boost their revenue. As Canadian guidelines require tourists to be fully vaccinated, increasing vaccination rates are making more people open to international travel.

Prepare for the rising demand with Assetsoft

Assetsoft helps clients find the perfect property management software through integration. Be it Yardi or MRI, we combine the required features into a single platform. We work together with you to understand your requirements and build tailored strategies for your business.

Our software integrations help you improve tenant communication, collect online payments and analyze property data. We ensure continued support in the form of data integration, software health checks, and staff training. By choosing Assetsoft, you don’t have to worry about your technology needs anymore!

Talk to us at Assetsoft and find the perfect property management software you need!

How Are Condotels The Next Big Idea For Real Estate?

Thu, 04 Mar 2021 09:00:00 -0500

As the pandemic settles, and the vaccine promises considerable recovery opportunities, spotting opportunity becomes critical. Knowing how to “ride the wave” can make a world of difference in how real estate companies grow during this period.

Condotels seem to be one of those opportunities. Many experts have agreed that they're the "next big thing" for property investment. Why would they say that? You'd be surprised by the advantages this relatively new concept brings.

What does the concept mean?

As NBC News reports, condotels let investors buy a property, unlike timeshares. This purchase can be a hotel room, studio apartment, or even a villa.

In other words, people can buy space in a hotel or vacation resort. It also allows them to own the space, accessing the property’s amenities, and rent their investment when they’re not using it.

Condotels in practice

Buying a condotel means acquiring property, and owners can use it as their main residency. The main obstacle mentioned by the article is that there could be restrictions on how long you can stay there.

Owners can use all the hotel’s amenities, being partly responsible for these areas’ maintenance, thus paying upkeep fees. They can also list their property for rent within the hotel or condo, creating an additional income stream.

Investors must also pay property managers a fee from their rental revenue for booking, housekeeping, and similar services. In layman’s terms, you get to buy a hotel room and rent it with the others.

Short-term rental popularity and condotels

Short-term rentals have become increasingly popular over the years. Forbes details how more people prefer to give up the luxury of traditional resorts for the affordability and convenience of vacation rentals.

Condotels offer an excellent option for investors looking to profit from this trend. It allows them to operate short-term rentals while curbing many of the obstacles brought by government regulations and bans on short-term rentals.

How does the investment work?

According to the article, investors have three options. They can buy a property as a vacation home. Renting the entire property when you're not there, or subleasing an unused area, offers a flexible investment. It's also possible to dedicate it solely to short-term rentals.

Why are they so promising?

Right now, condotels are free from problematic laws related to short-term rentals in residential properties. Renting these spaces is the same as booking hotel rooms while providing all the benefits from short-term rentals.

The role of short-term rental demand in condotels’ expectations

Airbnb and similar solutions have driven considerable demand for short-term rentals. Consumers seem to start a migration from traditional hotels to short-term rentals. Even amid COVID-19, short-term rentals have remained popular thanks to their safety and privacy against hotels prone to crowding.

Important considerations when investing in condotels

Condotels are a considerable investment. They can yield prominent returns thanks to growing demand, but it's not a decision you should make wisely. For a start, you need proper budgeting and forecasting before buying this type of property.

Just like any other investment, condotels offer advantages and disadvantages. For many investors, the pros outweigh the cons. That doesn’t mean you should overlook the risks brought by these assets.

What's good about them

Flexibility

Condotels offer many possibilities. Owners can use them as an office, vacation home, or dedicate them entirely to rentals. Constructing condotels is usually cheaper than traditional hotels as well.

Demand

Condotels, and short-term rentals in general, are increasingly more popular than traditional hotels with time. As we discussed, they’ve fared considerably well within the hospitality sector, even during the pandemic.

Amenities

Condotels allow homeowners and tenants to access luxurious amenities. Installations often include pools, housekeeping services, and gyms. However, it’s more affordable than a resort.

Security

Usually, condotels still receive maintenance from major hotel brands and property managers. That makes them benefit from excellent security measures, especially with the growing demand for this sector.

What's bad about them?

Ownership

Ownership is often a partnership with the building’s owner. Many experts see condotels as part-ownership with added privileges. Some condotels even require owners to notify and book their stays in advance.

Maintenance

Condotels are considerably more expensive than an apartment. That’s because of the mentioned amenities: pools, gyms, and more. Condotel owners are responsible for their maintenance and must pay additional fees for their upkeep.

Regulation

Finally, condotels are quite complicated when compared to homes and hotels. While that’s often seen as an advantage, it also makes the purchase and rental process significantly more complex.

What does this mean for high-rise development?

We also need to consider one of the most prominent developments in the real estate sector. High-rise properties have consistently gained popularity. Demand for these versatile and attractive properties keeps growing.

Thankfully, high-rise development is still a growing market. McKinsey & Company offers amazing insight into the sector’s promises. Interestingly, high-rise properties could even benefit from the growing condotel trend.

The sector is evolving considerably

The article focuses heavily on how the sector is expected to change by 2030. Prefabricated development and modular construction are two promising trends, according to experts. Additionally, general pollution restrictions are part of the expectations.

Nevertheless, the most prominent change will be the properties’ aim. Traditionally, high-rises aimed for specific functions, like apartments and offices. Dedicating different sections to different markets is becoming more common. Therefore, it’s expected for high-rises to contain residential, office, retail, and even service spaces.

Therefore, property management might also become significantly more complicated. Integrating the latest real estate software will be vital to ensure high-rises are as profitable as possible.

What do condotels mean for high-rise development?

High-rise properties can become prime opportunities for investments in condotels. They often offer attractive amenities, like great views, retail space availability, and more. As high-rises become more popular, they’ll likely offer excellent short-term rental chances.

High-rise buildings provide more comfort than traditional resorts. You can access shops, grocery stores, gyms, and other services without leaving the building. Therefore, they make excellent condotel options, particularly because of how convenient they are.

The Record Level Dip In Canada's Hotel Occupancy/Revenue: Will The Upcoming Mandatory Hotel Quarantine Help?

Mon, 08 Feb 2021 09:46:56 -0500

We've covered the pandemic's effects on real estate extensively by now. We've mentioned how many sectors have grown during it. Unfortunately, the hospitality sector isn't one of those.

Several news sites have covered the record lows experienced by the Canadian hotel industry. Travel restrictions and lockdown measures have taken a considerable toll. However, the upcoming mandatory quarantine for travellers has been suggested as a possible aid.

Is that the case? Let's find out.

General Rate Dipping for Hotels

CoStar has one of the best recent reports on the subject. Performance metrics for the last year saw severe harm from the WHO's declarations of a global pandemic. According to the article, the drop was immediate: 51% for demand and 60% revenue.

Naturally, occupancy fell 32 percentage points as well, dropping to a 33% average. Curiously, the warmer third quarter experienced the most robust demand levels. It dropped the next quarter again with the second coronavirus wave.

Urban Hotels: Biggest Damage

The drops weren't the same for the entire sector. Naturally, the urban side was the largest victim. Its reliance on group business resulted in more substantial declines than other categories, like resorts.

In general, limited-service hotels suffered fewer drops. Despite severe dips, the luxury sector also fared better than urban hotels. The need to avoid large crowds was the biggest hit for the urban sector. However, it favored smaller towns for leisure travel.

Hotel Supply

On the other hand, supply growth has remained relatively strong despite the pandemic and performance drops. The same CoStar article explains that the country has seen 5,000 new rooms opening.

Expectations for this year and the next one are also promising. However, experts estimate a volume drop in 2022 because of project opening delays. Hotel transactions also experienced a 19% increase from repositioning and hotel sales.

What Can Hotels do to Cope with this Crisis?

Luckily, things are unlikely to remain grim forever. This fall in hotel demand also comes from countless canceled trips. As time goes on, the wish to travel grows—especially with health measures demanding us to stay home.

That's why the list of tips from Hospitality Net relies mostly on this demand. Additionally, the promise of a potential vaccine for this year can also play a huge role in enabling travel again.

An Approach in Three Phases

The article breaks down the approach in three phases. The first phase touches on damage control as long as travel remains paused. The advice for hotels is to keep in touch with their customers via social media. While closed, hotels should strengthen their brand.

The next phase is the initial demand boost for travel. It should occur as regulations begin to ease, possibly including the vaccine's release as well. During this stage, hotels should boost their brand awareness. That also includes encouraging guests to book stays while adapting the experience to the industry's recovery.

Finally, the last phase starts after the initial boosts. It continues as demand goes back to normal, indeed once the vaccine is accessible. Marketing is still vital, but it'll probably go back to the standard. That includes creating packages and targeting your regular demographic.

The Ten Tips for Recovery

Aligning marketing with revenue management

Your recovery plan needs coherence with your revenue management and channel parity. Your booking perks, packages, special offers, and policies must align with each other. Your recovery strategy should dictate your marketing approach.

Improving websites

People will likely remain hesitant against crowds and visiting installations if it's not necessary. Your website should contain all the information they need to book their stay. Relevant information includes opening dates, health precautions, nearby attractions, and special offers.

Being flexible with cancellations

This advice lets you reassure potential guests that their bookings aren't a risky investment. With the importance of direct booking during recovery, flexible policies will prove critical to encourage visitors. It also helps develop brand loyalty.

Working with direct booking

Shifting distribution toward your direct channel will prove the most effective approach to boost your bottom line. The article mentions most revenue managers are planning to focus on OTAs. However, keeping healthy distribution mixes is still essential to maximize revenue.

Updating assets and information

All your digital assets must be up-to-date to make booking easier (and thus more attractive) for potential guests. Updates include whether or not your hotel is open and prevention plans. The mentioned flexible cancellation guidelines are also important.

Encourage re-booking over cancellation

You must try to recapture your bookings to maximize your profits. Remember that cancellations are bookings you've earned already. That means convincing your guest will be easier a second time. Implement email campaigns to encourage re-bookings with bonuses.

Consider feeder markets

The article mentions expectations for feeder market demand to pick up, especially with cautious customers booking a few months beforehand. Therefore, hotels should adapt their purchase offers accordingly during initial demand spikes.

Marketing according to demand increases

Demand won't be steady during the initial months. That means your strategy has to adapt to these swings appropriately. There's not much we can do to predict what every month will bring, so remember to check relevant news to update your approach.

Implementing CRM software

It will help if you stay connected with your customers, both past and new ones. Salesforce and similar apps can prove invaluable during recovery. You can create automated campaigns for capturing leads and promoting special offers.

Prioritize loyalty members

Finally, remember the benefits of brand loyalty. People familiarized with your brand will be more likely to book despite the uncertainty. Remember who these clients are and reward them accordingly.

What About the Obligatory Hotel Stay for Traveling? Could that Help?

Recently, the Canadian government announced new COVID-19 measures in the country. One of these measures includes obligatory hotel accommodation for travelers entering the country.

Luckily, the official Canadian government website has plenty of resources explaining these measures. As a general rule, the government recommends to postpone or cancel most travel plans.

The measures for exiting the country aren't too complicated. Entering is when things get complicated. For starters, travelers need to offer evidence of a negative molecular test not longer than three days before their departure time.

Other upcoming requirements include taking another test during arrival and spending three nights in an approved hotel until results arrive.

What Does this Mean for Travelers?

Air travelers will face the brunt of these measures. Firstly, they need to stay in an approved hotel around one of the airports taking international flights. That means the Vancouver, Calgary, Toronto, and Montreal-Trudeau international airports.

They must stay for three days in one of these hotels, except for specific, not-yet-disclosed cases. They also have to stay in their rooms until they have their test results, as mentioned. The main issue comes with the costs. They're responsible for paying for their rooms, food, transportation, security, and control.

They'll need to receive negative results and provide evidence of having a quarantine plan before they can leave the hotel. They're free to spend the rest of the two-week quarantine where they planned.

What Does this Mean for Hotels?

Not all hotels are eligible for quarantine. While still unreleased, there will be selection criteria for which hotels make it into the list. For now, we can rule out any hotel away from the aforementioned international airports.

Once the application process is made official, hotels will be able to assess the requirements. Those interested must submit an application form once the process opens. However, it's necessary to visit the official web page for updates.

Final Thoughts

The government hasn't released an official list or application process yet. Nevertheless, the measure is almost guaranteed. That means that preparation is vital. For now, our best advice is to wait and apply as soon as the list releases.

Additionally, we hope that our content and tips are helpful even for non-eligible readers. Make sure to stay on top of official announcements so that you don't lose your chance.