European hoteliers believe one of the silver linings of the COVID-19 pandemic has been showcasing hotel brands’ value propositions, a process helped by operators and owners being in constant communication and alignment as the industry slowly returns.

Speaking at the online Hotel Data Conference: Global Edition, Dimitris Manikis, president for Europe, Middle East and Africa at Wyndham Hotels & Resorts, said the hotel industry has become smarter and more agile.

“Executions are higher than they were at this time last year. Brands are a safe place to be. Those aligned with brands have support, which at the very least has been a ‘how are you,’ or a ‘thank you’,” he said.

“And we are bringing in new owners with the same strategy and care, and all of this lends credibility. If you have a team that cares, and not just for when the hotel opens but during those low periods, then these champions of hospitality will lead to more [projects in the] pipeline,” he said.

For serviced apartments, that figure might be higher, in line with guest confidence in the health and security of such a model.

Tom Walsh, co-founder and CEO of serviced-apartment brand Staycity, said his firm is doubling its room count in the next 12 months to around 5,500 rooms.

“We see almost infinite room for growth over the next five years, to some 15,000 keys in Europe by around 2025,” he said.

He added only a couple of deals were signed in 2020, but that moving forward his deals list is strong, with 12 news properties in the pipeline.

Walsh said institutional investors might not be fully ready, but there is a wall of capital to spur them on.

“That is supplemented by some distress deals, which we do not want to boast about as it suggests someone else’s misfortune. Overall, though, we’re positive, excited, but there’s no denying that a pause took place in 2020,” he said.

Amanda Elder, chief commercial officer at Kempinski Hotels SA, which has 76 hotels, said there also is no doubt that in Europe the luxury sector has struggled the most, especially in urban locations and at hotels dependent on international travel.

“Kempinski saw some positive changes in China early on, but that was followed by low occupancy in Europe, for us and our competitive set,” she said.

She added that optimism derived from government help, performance in the firm’s smaller resorts and not having to close some of the company's flagship hotels — for example, the Adlon in Berlin, along with properties in Frankfurt and Vienna.

“All of this has given us time to assess, to make sure we have a bright future, to ask what customers want from us. We took the time to do this and to refine [our offering]. All of this is feedback about wellness, sustainability, centralized on the guest, and it is around loyalty. Guests have been loyal to us,” Elder said.

Walsh said occupancy for hotels in his sector was approximately 50% in 2020.

“Regional cities having higher occupancies, and also length of stay has increased. There is hardly any transient demand, but key workers, long-term projects [are booking]. We have a leasehold model, but our breakeven is no more or less than it is for a freehold model,” he said.

Manikis said the economy and midscale hotel segments are performing better.

He said guest demand at his properties has come from essential workers, business travelers from small and medium-size enterprises and truck drivers.

“You had to stay open to welcome guests, and owners have been willing to stay open to continue momentum and to remind your local community you are there. Staying open is itself a sign of positive messaging, which is gone if one hotel after another closes,” he said.

Manikis said he is hopeful for the industry's recovery, if only because guests are acutely aware of the need to reclaim their lives and make up for lost time.

“[The] staff has wanted to be educated as to what exactly is expected of them, too — to be flexible, passionate and understanding,” Elder said.

There also is no doubt business travel has been hit hard and will be probably the last demand segment to return, panelists said.

“Shorter trips might be deemed unnecessary, so short-term corporate [demand] will take some time to recover," Staycity’s Walsh said. "Tuesday to Thursdays were always expensive in cities, and those rates will go down, so marketing campaigns have focused on suggestions for family weekends. Right now, there are more moving parts, so flexibility is needed.”

Manikis said hoteliers need to read the signs of when group business will come back, and he believes it will since there is no substitution for face-to-face events.

“The ultimate concern is a duty of care to owners, team members, communities — and that is to fill those rooms, to deploy them. How we do that is part of strategizing. If you went from 220 days of traveling in 2019, to 30 last year, chances are you will not go back to those 220 [in 2022],” Manikis said.

Kempinski’s Elder warned against a slide in the luxury hotel segment amid a wave of repositioning and pricing changes.

“We’ve spent years trying to position our hotels, so how can we claim to be luxury if we do not keep to those positions? There will be longer stays and bookings made longer out, and you might see some deals, but we must not get into some type of pricing war. … It is about strategies and the right people in place to maintain [average daily rate],” she said.

“It is about experience, not just a head on a bed. It is here that partnerships come into play. We can be creative, but guests will still be looking for a holistic experience and value,” Elder added.