Housing homeless saved one hotel’s bottom line, for now
 
Housing homeless saved one hotel’s bottom line, for now
08 JULY 2020 9:02 AM

The GM of the Marriott Durham Research Triangle Park talks about how his hotel converted to housing the homeless for three months and how it helped his property maintain operations. But as that deal ends, he worries they might be back to square one.

DURHAM, North Carolina—In the early days of the COVID-19 crisis, many hotels were caught flat footed by the pandemic and the ensuing economic crisis. But some quickly took action to reorient to a new type of demand.

One of those hotels that quickly pivoted was the Marriott Durham Research Triangle Park in Durham, North Carolina, which partnered with Durham County and Urban Ministries Homeless Shelter Program for a 90-day deal to use the entire property to house homeless people from the surrounding area.

According to data from the property’s management company Remington Hotels, the deal helped the property maintain significantly better profitability than its competitors with a 62.2% positive GOP margin in May, but GM Bill Clancy said that doesn’t mean it’s been easy sailing or will be going forward.

Here is what Clancy had to say about what handing over his property to an outside group has meant to him and the hotel.

Q: How did the deal originally come together?
A: “Our folks in the corporate level and our ownership are the ones that I found the lead and negotiated the whole thing and kind of made it happen.”

Q: What was your initial reaction handing off property?
A: “It’s not unusual in our industry to lease out the whole hotel, maybe not for such a long, long period of time, but we’re happy to have it because obviously with what was going on and our business levels leading up to that, we were just struggling there running 10% to maybe 12% to 15% occupancy. To have the opportunity to have the whole hotel booked with steady business and for people to have jobs, we were pretty, pretty excited about that actually.”

Q: What was the lead time before handing over?
A: “We had awhile. They were talking about it March, and once it got signed off on … we knew for a couple of weeks.”

Q: What did you do to prepare?
A: “We had to do a little bit of preparation because obviously this a little different group that were coming in taking pretty much all the rooms, and we had to coordinate with the city. They had to coordinate with the city, too. They came in, and we walked all the rooms together. I think they took a photo of each room, just so we’re all on the same page with how the rooms looked at the beginning so we can evaluate it at the end. And then from there, there’s some things in the rooms that we didn’t need. We took some time to go through the rooms and remove those items. Then we put some items in the room, like soap and shampoo at a little bit larger volumes since the folks are going to be here for a while. Beyond that, we got the list of folks that are coming in and made the room keys. That really wasn’t much different than our everyday operations. Just really had to run through the rooms, take a few pictures, and then you know, take things out of rooms, put things in the rooms, and then make the keys and we were ready for them to arrive. We know we had the game plan as to how we were going to do things. Linen just once a week, and they were feeding them and things like that. The preparation really wasn’t all that bad. Not much different than any other another group. You have groups coming in taking a lot of rooms, and there’s certain prep you have to do for (them). So, from that standpoint, it really wasn’t that wasn’t that bad.

Q: And it was a 90-day contract?
A: “Yes, right. ... They (came) April 10, and it ends on July 10.”

Q: How did roles for employees change?
A: “It’s definitely different. Things were already different before the group came, because obviously, you know, we went from 77 employees to seven employees. I was helping the housekeepers get linen out of the rooms and washing linen before this group came, and then when this group came it changed a little bit. My role is very, very hands on now. We’re not checking people in, we’re not checking people out. We’re not doing laundry every day. So definitely our roles are different. I spend time at the front desk because we still have to answer the phones. Occasionally, they need a key made because they lost a key or locked themselves out or they need toilet paper or some towels. We have those at the desk that we hand out for them. I spend time doing that, and I still spend some time in housekeeping. We have a couple housekeepers going. They mainly clean the lobby every day. And since we’re swapping linen once a week, that means we have it spread out different days. I help them with the linen, and I’m doing a lot of the ordering of the products, you know chemicals for laundry, trash bags. I’ve kind of taken all that over. I don’t spend a lot of time on my desk anymore. That’s for sure. It’s moving around the hotel, checking on things and just helping out because … (we’re) at 12 employees now. We did add a couple, but still, staffing levels are pretty low. So everyone’s pitching in, it’s all hands on deck. Just get it done.”

Q: How did you coordinate between the different groups (ownership, management, the county)?
A: “The sales and leaders at corporate brokered the deal. We had one or two conference calls, just to talk about the logistics of when they’re coming in and that kind of thing, but it wasn’t a huge, huge difference for us. We’re used to running the hotel and having people in our rooms, so once we knew when they’re coming and what they needed, we just put the plan together.”

Q: What was your typical business mix before this?
A: “We were having a great year. We were going to make all our (budget) numbers again. But yeah, we’re in the Research Triangle Park, so it’s pretty much all business travelers. We’re surrounded by large companies like GSK, Cisco, IBM, MetLife, BASF. The list goes on and on and on. You’re talking sold out Monday, Tuesday, Wednesday just about every week. Maybe 50% to 60% of the weekends we get some sports groups. Obviously, there’s a lot of colleges around here, so pretty steady hotel running above 70% occupancy overall. We had 77 employees and were pretty much busy all the time. And then, bam. Then we were doing 10% to 12% occupancy. And a lot of that (was because) we had Southwest Airlines that made up 10% of our 12% to 15% occupancy every day.

“It was really a real shock to the system, you know, 77 employees down seven almost overnight. Now everyone is hands on. Salespeople work in the front desk; we work in the laundry. … That went on for quite a few weeks until we got this group.”

Q: Any chance the deal gets extended?
A: “Yeah, that contract is up. We’re working on a new contract for like 50 rooms for the next month. But I think after that, that’s pretty much going to be it. But it was looking good. Things went bad; we got this group in to get us through these few months. We went to phase two (reopening in North Carolina), and the time for this group was coming to an end and it looked like we were going to move to phase three. Now we’re one of the 10 states that’s bad with this flare up. So now that this group’s leaving, I’m actually kind of worried that it’s going to go back to the way it was in March because there’s no corporate travel. The airline that we have (booked) about 25 rooms, and we’re only going to get 12 rooms.

“We may end up back the way we were, and a lot of that’s because of this flare up. If this flare up didn’t happen and the cases weren’t going up and we were moving into phase three, I was feeling like (this group was) going to move out (and) things could start to get back to normal. But I’m not sure normal is coming yet for us, unfortunately. It seemed like everything was falling right in place: Things went bad, we got the group to get us through, and then we’re coming out of it. … But then the rug was pulled out from under us here.”

Q: What are you doing to prepare for after that demand goes away?
A: “After they leave, they still pay for 10 days, so that gives us time to clean the hotel top to bottom. We’re going to use an outside company for that to make sure everything gets completely clean and disinfected. They’ll come in, they’ll strip the rooms, they’ll clean and disinfect, then we’ll go in and do our normal clean that we would do and put the rooms back together. And then we’ll open back up for regular business, obviously with all the COVID precautions, the signage, the social distancing, the sanitation and sanitizer stations. We’ve got all that stuff here. I’ve got it ready to go. Once they leave, we’ll clean the place. The place will be the cleanest it’s ever been I would think with this outside company coming through and us putting everything back and then we’ll be ready for the COVID world.

“With the way you have to set up the credit card machines, we have the shield at the front desk and all the COVID stuff that you’re seeing everywhere. We’ll be ready. My sales team is here. I’ve got one or two sales folks. They’re doing what they can to find some business. We’ve got them working on that now. My director of sales came back at beginning of the month. Obviously we’ve got to find business so we’re working on it, but the corporate demand is definitely not going to happen. We just got to try to find something else, maybe some government business, but we’re looking, that’s for sure.”

Q: What’s been the biggest challenge during this period?
A: “Right out of the gate, it was just absolutely heartbreaking because I had to furlough 70 people. I mean, I’ve been here seven years. I’ve worked with most of them for a very long time. That was the hardest. It’s just heartbreaking to have to do that, to tell people they don’t have a job and then now it’s just been going on and on and on and on. And I can’t bring anybody back. That’s probably the second worst thing; just not being able to call anybody back. That’s the toughest just not having jobs for folks. It’s just heartbreaking.”

Q: How much of a difference the deal to house homeless make for your bottom line?
A: ‘It definitely made a difference. We lost our shirts in March, and we’ve done fine since we’ve had the group. We’re not losing money, for sure. Again, these guys are about to leave and with the flare ups it’s kind of like being right back in the place we were in March.

“Money-wise, it’s not going to be good again. I’m sure that’s part of the reason we decided to take (the deal). … But the way things are, things are so short term. Things change by the minute, by the hour every day. Who knows, our cases could all of a sudden drop two weeks from now. Everything changes. You just don’t know. That’s the crazy thing now. Everything is just changing so fast. It’s unbelievable how things change so fast.’

Q: Do you see any community relations benefits from this?
A: “I’m not really sure. We’ve got this going, and we’re getting along great. The folks I email with (at) the county are good, very responsive to people. The people they have here on site are very responsive. Then the police are involved. It’s been a good relationship. Certainly, I would like to think that would be a plus for us and for them too. This is something that we’re able to do to help the community and folks in need, and I think it’s worked out pretty well.”

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