The American Hotel & Lodging Association (AHLA) has released a Roadmap to Recovery for the Hotel Industry, which outlines the specific steps Congress can take to help the hospitality industry get back on its feet with the next stimulus package. AHLA said the industry is on the brink of collapse, citing an April Jobs Report that showed that the hospitality and leisure industry was the hardest hit, with a loss of 7.7 million jobs — nearly as many jobs as the next four sectors combined. Moreover, 2020 is projected to be the worst year on record for hotel occupancy, with an impact nine times worse than 9/11.
During a May 19 Washington Post webinar in which he was interviewed by Post editor Michael Duffy, Hilton President and CEO Chris Nassetta didn’t downplay the unprecedented impact the pandemic has had on the hospitality industry. But he injected a note of hope, saying that he is no less optimistic about business now than he was before the coronavirus crisis.
Nassetta, whom Convene interviewed as a Convening Leaders 2018 featured speaker, said that Hilton, the second-largest hotel company in the world, had just come off one of the best years in the company’s history in 2019, which was also the company’s 100th anniversary, when it began closing properties in China in response to the coronavirus. They are now starting to see what the early stages of recovery might look like as all 300 of their properties in China are open for business. In Europe, he said, 40 percent of Hilton properties have suspended operations, and around 12 percent of U.S. hotels — 850-900 properties — remain closed.
Nassetta said it wouldn’t be “prudent” to predict when closed properties would come back online because the timeline for the reopening of America and other parts of the world remains uncertain and is subject to local government decisions. Openings will need to be determined in collaboration with owners, he said, when they assess that there is enough demand to generate revenues.
Nassetta sees business coming back in waves: first, leisure/transient travelers, followed by business/transients. The last to come back, he said, will be group business. While he emphasized that it will take time for the economic recession to turn around, the “long-term prospects for our business,” he said, “are spectacular.”
The real business of Hilton, Nassetta said — highlighting that the company has been named a top place to work two years in a row (by Fortune) — “is people serving people. That’s the real magic. I don’t think that will change.” While he said that he believes customers will continue to want human interaction, “certain mechanical elements are being digitized, although that was already happening.”
Hilton is “leaning into” a low-touch experience, with a digital check-in and keys, he said. “You won’t need to go to the front desk to check in, and there will be contactless entry,” which he expects will be “massively adopted.” Guests will break a seal when they enter a room, so they will know that it has been cleaned to the highest standards — Hilton has partnered with Lysol and the Mayo Clinic to develop “hospital-grade hygiene protocols” in order to safeguard team members as well as customers during COVID-19. In addition, guests will be able to run everything — from temperature, TV, and lighting controls to ordering room service — from their app. Restaurants in the hotel will feature more single-serving grab-and-go items “at least in the short term,” he said, and room service could be “knock and drop.”
Watch video highlights of the Washington Post webinar.
Michelle Russell is editor in chief of Convene,