During its Q1 2020 conference call, Xenia Hotels & Resorts provided some enlightenment on how some it and other hotel brands may move forward in a post-COVID world. Specifically, with leaner staffing levels and more efficient operational models.
During the opening remarks, Barry Bloom, president and COO, said the brand was working with property level management teams to design “new staffing and business models” which would provide each property with the ability to “flex costs as demand rebounds.” Some of these new alterations include: changing F&B venues into primarily grab & go concepts, providing deep cleaning and sanitizing housekeeping services at checkout, and relying on touchless services such as mobile check-in and out.
“We expect that many of these changes to the operating model will become permanent aspects of our industry’s operating structure,” he noted.
Later, during the Q&A portion of the call, Bloom expanded on this thought noting that the company would really need to “rethink the entire business model,” and “look at what services we’re providing, what services we’re charging for, and what services we’re providing on a complementary basis.”
“I think, we will come out of this with a far lower cost structure than we ever could have imagined,” he added.
Earlier in the call, Bloom explained what some of those cost-cutting measures might mean. Chief among them: labor cuts. He noted that it would likely “permanently reduce” its hotel staffing model for the foreseeable future as it continued to evaluate demand and implemented these shifts in business models.
“We will likely see our full service hotels operate more like select service hotels in terms of staffing and amenities offered,” Bloom noted. “We expect that hotel staff will be reduced as we may leave entire guestroom floors and airs of meeting space out of inventory for extended periods of time.”
Additionally, housekeeping may for some time be offered only on checkout and front desk staff could possibly be reduced with the implementation of mobile keys and self check-in/out. Plus, staffing could also be reduced in the long-term with the hotels’ pivot to shortening F&B to a limited menu of grab-and-go food items.
“I think those are the primary areas where you’ll see both cost savings initially and [be areas] that have the potential to stay in the operating model longer term,” he added.