Four questions for Andy Thompson on operators and hotel owners finding ways to navigate these exceptionally challenging times, and the appetite of investors.
- What is the condition of Czech hotels after having gone through the first wave of coronavirus and now have to face the second? The sector is unfortunately one of the hardest hit in this medical crisis. You can get a feeling for the extent of the issue just by checking the hotel rates that are being quoted by the hotels- and that’s only for the hotels that have decided to remain open.
- Do you know what the occupancy of Czech / Prague hotels is now? For those that have decided to remain open, recent occupancy figures have tended to be in the teens/ twenty per cent for the higher end hotels.
- What impact do you think a pandemic may have on the hotel market? So far there has been limited movement but there is no doubt that this sector is under stress across Europe and at these REVPARs, the model is not sustainable. We expect therefore that this situation will change in the coming months – probably by the end of the year/beginning of 2021, as banks, operators and owners all start to lose patience. For those hotels that survive, Prague will of course remain one of the most in demand locations in Europe. The city is typically ranked behind only London, Paris, Rome and Istanbul in terms of visitor numbers in Europe, and, as such, any hotel owner or operator will reap the benefits of a sector that has demonstrated consistent growth over the years - when travel finally does open up again. Everyone hopes and expects that this will happen again in 2021. In the meantime, operators, banks and owners must find a way to navigate these exceptionally challenging times.
- Do hoteliers have any options to use their hotels at least in part to reduce losses? Are there any cases where a hotel started offering its rooms for a long-term rental for housing? Yes, these are options which are being considered, especially the conversion for use as residential/micro-living type concepts. It is also much easier to get planning/use consents to move from hotels to residential use than the other way around. In terms of other potential opportunities, some chains, have already started doing so. Others, such as Czech Inns have recently created parts of their hotels to accommodate persons who contracted COVID-19.