Brands are helping owners during the pandemic through various efforts designed to mitigate costs and add more flexibility to requirements.
GLOBAL REPORT—As hotel owners continue to face financial hardships due to suspended operations and a near-halt to travel across the globe because of the COVID-19 pandemic, many are looking to brands to help provide relief.
Below is a round-up of what some of the major brands are doing to help owners during this time.
According to a statement emailed to Hotel News Now from Marriott, the company is trying to be proactive in mitigating negative financial and operational impacts of COVID-19.
“Business contingency plans have been implemented and will continue to be adjusted in response to the global situation. At the property level, contingency plans include measures such as closing food and beverage outlets, reducing staff and closing floors or even entire hotels,” a Marriott statement read. “The company has also temporarily deferred most brand standards to help owners and franchisees, including delaying renovations due in 2020 by one year, deferring required furniture, fixtures and equipment funding and suspending brand standard audits.”
Marriott has also taken steps to significantly reduce costs related to programs and services that hotels reimburse it for, such as marketing costs, to be more in-line with the expected decline in funding given likely lower systemwide revenues.
While Hilton announced that it would cut executives’ salaries and furlough some team members, company officials would not comment when asked whether it would offer any flexibility to owners during the pandemic.
Intercontinental Hotels Group
An emailed statement to HNN read:
“Our top priority remains the health, safety and wellbeing of our guests, colleagues and partners. We are in constant communication with owners of IHG-branded hotels and are committed to working with them at every level to help them manage through the unprecedented business impact of COVID-19, while also continuing to ensure a high quality stay for guests. As part of this, we have provided owners with brand-specific guidance related to operational changes and relaxed brand standards that are available to them as cost containment measures during this difficult period. This guidance places public health and safety first for our colleagues and guests, and covers multiple areas including colleague trainings, recreational areas, food-and-beverage options, and in-room services. We will continue to review and update this guidance in partnership with our owners as this situation progresses.”
Wyndham Hotel Group
“Wyndham’s team is dedicated to helping its franchisees during these challenging weeks and months ahead and is taking steps to support their business in order to help them be in the best possible position when travel begins to pick up again,” according to an emailed statement.
Below is a summary of some of the company’s changes:
- suspension of finance charges (all fees accruing for the months of March, April and May 2020 can be deferred interest free until September 1, 2020, to help minimize owners’ cash flow challenges; franchisees requiring additional assistance can work with the company to develop a flexible payment arrangement);
- certain significant fee reductions or complete removals (for fees such as PMS, RMS and loyalty, for example);
- quality assurance inspection flexibility and fee waivers for March, April and May 2020;
- breakfast requirements flexibility through January 1, 2021; and
- deferral of all brand standards (except for health and safety) until January 1, 2021, and other operational relief measures.
Choice Hotels International
“We recognize the impact that COVID-19 is having on the hospitality industry and the livelihood of our franchisees, the majority of whom are small business hotel owners. We appreciate the commitment that our hotel owners have to their staff, guests and communities, and we are taking action to support them with tools and resources to assist with daily operations, to help address issues impacting guests, and ultimately to help mitigate long-term impacts,” an emailed statement to HNN read.
According to the statement, some of the steps Choice is taking to help franchisees include:
- leading efforts in conjunction with other industry leaders to drive forward federal, state and regulatory relief and stimulus measures that will have the greatest impact in providing financial relief to franchisees, including directly expressing needed regulatory changes and measures to President Donald Trump, Vice President Mike Pence, Commerce Secretary Wilbur Ross, House and Senate leaders and other administration officials;
- providing guidance and education on Small Business Administration loan opportunities and collaborating with the White House, the Treasury Department and Congress to maximize the benefit of SBA loan programs for Choice properties—including for 7(a) loans and disaster loans—to increase loan limits, guarantee percentages and waive loan fees;
- suspending a variety of fees, including on past due balances since March 1, 2020, reputation management fees and guest relations handling fees;
- assisting franchisees in managing guest reservations and cancellations;
- pausing quality assurance reviews through June 30, 2020, and pausing property-improvement plan inspections through December 31, 2020;
- suspending certain brand standards, creating more flexible options, and moving deadlines to reflect the evolving travel environment; and
- providing guidance and best practices on crisis preparedness, including specific prevention procedures, proper disinfection protocols, etc.
Best Western Hotels & Resorts
In mid-March, Best Western announced it would implement measures to provide owners relief through May 2020. According to a news release, the company will:
- waive half of monthly fees;
- waive half of property revenue-management fees;
- reduce Best Western Rewards loyalty point fees charged to members by half without lowering points awarded to loyalty program participants;
- increase by 50% hotel redemption compensation for BWR loyalty guest stays; and
- waive in entirety co-op marketing fees.
Best Western is also delaying certain fees until November. The company will also offer extensions to its members related to its various programs.
Hyatt Hotels Corporation
Hyatt declined to comment for this article. However, the company did recently issue a news release to say that some employees would be furloughed, executives would have pay cut, and the CEO and chairman would forgo pay.