1/11/2024 0 Comments Netherlands lockdown hotels![]() For investors, understand the impact on the operating fees. Understand if the loss will be permanent or just delayed.For operators: asses the impact on Occupancy and RevPAR and create a plan to mitigate risk.Talk to your operators to discuss their expectations about the impact on performance.For investors: know how your operators are affected and identify the type of contracts that are applicable (lease or management).What should you be focused on, and what should you be doing…Īssess the impact on Occupancy and RevPAR and create a plan to mitigate Ensure you apply for the tax refunds and other financial relief measures.However, these may have a higher interest charge and fee structure. ![]() There may be alternative lenders that can move quickly to provide short term funding. ![]() Be transparent towards existing lenders and involve them in the mitigating procedures and continuity plans.If your forecasts highlight a funding requirement, assess the equity or debt funding sources available.Put in place an advanced revenue management system and pricing models to respond to market developments quickly.Reconsider or postpone maintenance and other capital expenditure where possible to conserve cash. Minimize all discretionary operational and capital expenditure.For operators: manage your payments to suppliers.Be realistic and have Base and Downside scenarios to understand critical cash points and any breaches of lending covenants. Have an extended cash flow forecast for the next six months.Understand the impact on Cash, Working Capital and Profitability Stay positive, stay focused and stay alert on your financial situation. This gives hope for the sector at this stage in time. The good news is that our colleagues in Asia already see a pick up in this sector, although only at the starting point. ![]() The situation we are in also brings new business models and opportunities, in defining for instance new delivery concepts, human capital sharing platforms, initiatives in promoting the “staycation or holistay concept” and the use of the less productive time to work on activities that were normally pushed forward like asset counts, security plans, defining standard operating procedures, social media plans etc. For example by making their venue available for hospital beds and hospital employees. We are proud to see that this sector shows its maturity level: in working together, showing their true hospitality commitments in helping out our society where they can. Decisions being taken to shut down hotels, restaurants, theme parks, cinemas, not to mention the entire disruptive effect of the travel ecosystem, all have a significant impact on worldwide tourism. As a team, Operators and Investors are trying to mitigate the cash and working capital issues, and stay in close contact with their stakeholders. The impact is huge, and not yet predictable, on both revenue and supply chains. We are proud to see that our hospitality and leisure clients, being the first ones that experienced the extreme bad weather conditions, are moving quickly and remain focussed to understand and quantify the operational and financial impact for their business. Whilst this focus will continue, the implications for economic growth and corporate profits have to lead to a sharp sell-off in equity markets across the globe. The hospitality Industry & the impact of COVID-19Īs the effects of COVID-19 spread across the entire world, the primary focus for governments and businesses is the safety of their people.
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