Why hotels still battle low occupancy despite economy easing
Though global economies are gradually restarting after months of inactivity and groaning under the impact of coronavirus pandemic, some sectors seem to struggle more for recovery.
One of such sectors that is badly hit by the pandemic and that still struggles to breathe is the hospitality sector.
From scaled down operations at the beginning of the pandemic to total shutdown and zero occupancy at the peak of the health crisis, hospitality sector truly yearn for respite.
Sadly, months after easing of the lockdown, patronage is still unsustainable due to many reasons, especially safety concerns and the closure of the airspace to international flights, making many hotel outlets and brands to defer reopening.
But with the resumption of international flights on September 5, 2020, there seems to be hope for the recovery of the sector as many hoteliers, particularly foreign brands, look forward to huge inflow of guests from international flights, which make up over 60 percent of their guests.
As well, most hotel managers hoped that the flight resumption would restart the meetings, incentives, conferences and events (MICE) sector, which is goldmine for hotels.
Barely a week after the resumption of flights, the reality is that low patronage will be for a long time as the flights are not much, and are not bringing the right guests.
But while some people argue that one week is not enough to assess the impact of the resumption on hotel occupancy, some think that the world will not travel in mass again.
“With the look of things, many would-be guests are still studying the new normal, staying safe and rather holding meetings and transacting their businesses online. For now, the airplanes will fly in mainly family members and people stranded abroad during the global lockdown for covid-19”, Erastus Dangana, an Abuja hotel manager, said.
“In line with him, Pascal Emordi, a hotelier, noted that it is only people with pressing needs that can travel out now because the pandemic opened easy access and opportunities in the online. We are now embracing the online more than ever, and likewise would-be guests. I see improvement from early next year, not now”, Mordi stated.
Offering reasons for the sustained low patronage, Magnus Mmaduemesi, an economist and restaurateur, noted that the pandemic has ushered in hard economic realities resulting in low purchasing power, which is affecting patronage of everything now.
“We are facing serious economic challenges now, and pray not to experience a second recession within a short period. People barely feed, and that affects their leisure and patronage of hotels too”, the economist said.
Speaking further, Mmaduemesi stated that government has spent a lot fighting the pandemic and need money now, and even corporate organisations are sacking their employees in order to stay afloat. “Many corporate organsiations and government agencies are cutting down their budgets, and this is reducing their activities, including meetings in hotels and other partnerships that usually draw guests and further engage hotel facilities”, Mmaduemesi explained.
Moreover, government agencies have also learned to hold their meetings within their facilities and conduct webinars like corporate organisations in order to save costs, leaving hotel facilities empty.
“We keep receiving memos on changes in our operations, cost cutting policies, safety protocols, and other measures that restrict our movement within the office. For now and may be in a long time, I do not see us patronizing hotels, and our foreign partners, who we normally quarter in hotels when they visit, have been stopped from visiting until the partnerships are reassessed and renegotiated because of the impact of the pandemic”, Olakunle Adeyemi, a senior civil servant, said.
Beyond the low purchasing power, many who can afford luxury offerings in hotels are still reluctant at visiting because of safety concerns.
“I have a family that usually visits for our Sunday Brunch. I called them last week to inform them on the resumption of our brunch service, but the breadwinner told me that they hardly step out since the outbreak of the pandemic. Many are still scared of the virus despite the assurance of safety and this guests’ apathy is affecting our recovery”, Dangana lamented.
But would-be guests are seeing the situation from another angle. “I cannot use my money to buy risk because most of these hotels are not adhering to safety protocols. Where do they want to start, is it from the poorly paid waiters, gate keepers who can compromise at the flash of naira notes and receptionists that can turn blind eyes when foreigners are involved”, Goddy Aihme, a business executive, said.
Doubt over adherence of safety protocols, according to Ime Umana, another hotel manager, is a reason for low patronage now. “Yes, inflows from foreign flights impact our business hugely, but we can sustain local patronage like in Kenya where 70 percent patronage is domestic, by encouraging our local outfits. We can, it only takes passion for our own things to do so”, Umana said.
However, Mmaduemesi thinks that hotels should offer incentives to woo guests as lull in business persists. According to him, offering heavy discounts on rooms, food and drinks menus, and recreation facilities such as spa would lure more reluctant guests to visit hotels.
“As most foreigners are holding back their visits until when it is safe to travel again, hotels should lure guests with discounts and other incentives because many would-be guests have low purchasing power now and would rather spend their little income on very important things”, the economist concluded.