Q: How is MMI working through this crisis, both with employees and with your owners? What were the immediate steps you took?
A: We began working to keep as many employees on staff as possible depending on the individual property and their needs. We have some hotels across our management portfolio that continue to perform at an occupancy level that supports the staffing and an ongoing operating cash flow. We encouraged employees to use their PTO and assisted where needed with unemployment.
We immediately started working with our owners on their forecasting, updating continually based on the newest information available. We looked at their cash flow and helped them to determine how to best move forward. We started looking at expenses that could be eliminated or delayed, contacted government agencies to reduce or defer TOT. Currently we have been assisting owners where needed in completing PPP loan applications.
Q: Looking in the medium-term future, what do you think it will be most important for management companies to do to ready themselves for the eventual recovery?
A: While we have hotels currently running at the bare minimum occupancy, they are still open and that will be key as we begin recovery. Where possible we are doing as much preventative maintenance and renovation work as we can, the hotels will be ready for guests. Most importantly though we are continuing sales efforts, we are staying in touch with our partners and reaching out to new ones, maintaining relationships and developing new ones, looking for existing business (yes there is still business out there!).
Q: A lot about the public health crisis is uncertain at this time—how long it will last, whether and which other parts of the country will be impacted the way NYC and Seattle have, how long social distancing will be required and/or recommended, etc. How does this inform your plans and assessments? How difficult is it to make these decisions when there are so many unknowns?
A: This is the hardest part dealing with this situation. A lot of us have been around for a long time and this is not something we ever expected. We are planning based on the information available and that is changing daily. We have put in place plans with a target date based on certain events taking place, the target date moves as needed until the expected events start to happen.
Q: How much of a lasting impact do you think this will have on the overall industry?
A: Not everyone is going to make it out of this crisis, operating models may permanently change. Frankly it’s too early to really know the lasting impact, a lot will depend on how long it is going to last.
Q: Once stability has started to come back to the market, what will be important for the industry as a whole, and management companies in particular, to do to ensure as quick a recovery as possible?
A: If you aren’t taking steps now to be in the best position possible as we emerge from this pandemic, you are going to be in for a long recovery. This is true for the industry overall as well as management companies. I think that the individual operators may be in the worst position coming out of this if they haven’t been taking action or don’t have a sales & marketing team working for them.
Q: There have been several government packages related to coronavirus relief, and there will likely be more. What are your thoughts on what you’ve seen so far? Is there more you’d like to see the government do?
A: We have worked with our owners to apply for the Paycheck Protection Program (PPP). This program, if rolled out as fast as is being stated, will be huge in keeping business afloat and employee’s intact. It may need more depending on the length of the shutdown but it has been rolled out fast and using the SBA system to distribute the funds should streamline the process.
Q: What have been the top three challenges from an operations standpoint?
A: 1.) How do we protect our employees, at work and financially 2.) Supplies, do we have what is needed in this new environment, how do we best share among our hotels 3.) Maintenance, ensuring that hotels that have shut down or are at extreme low occupancy, continue to keep their systems in order.
Q: What advice would you offer other operators?
A: If you can stay open! Maintain your team as much as possible and focus on sales, have a plan in place to move forward.
Q: What’s one message you want the hotel industry to hear?
A: Stand together, we will come out stronger!
Q: How do you protect assets during the current situation?
A: There are many answers to this question and it depends on the individual situation but in a nutshell, you need to keep your asset secured, maintained and not to beat a dead horse but you need a plan in place to emerge.
Q: “Unprecedented” is a word you hear often with regard to the pandemic. How is this situation different from previous events like 9/11 and the Great Recession? Even still, were there lessons learned from those events that can be applied here?
A: Unprecedented is appropriate. This looks 9/11 look like a Disneyland vacation and the Great Recession like a bad month that you forecasted as a good one; both cases were in the end finiancial. There is knowledge to be gained in every situation and we have applied that experience where applicable but the health issues with the pandemic is what makes the word unprecedented appropriate.
Q: Culture is something we talk a lot about in this industry. In times of crisis, how important is it to have a strong company culture? Has the coronavirus pandemic highlighted or drawn out anything in your company’s culture?
A: This has definitely highlighted the strength our company culture, from the corporate office to the property level. We were fortunate to have an experienced team who had worked through tough times together previously… everyone has your back in our company!