Source: Hotel News Now
By Larry Mogelonsky
June 16, 2020
Imagine a quick mathematical scenario: Business drops 50% due to the lockdown, then you see a recovery of 50% of this number once the pandemic is over. Occupancy is back to normal, right? Not true; it is still down 25% from where it was before the drop.
Here is a another one, this time for two businesses: One experiences a drop of 15%; the other a drop of 60%. Which one is healthier? The answer is that you don’t know because there is insufficient data to draw an accurate conclusion.
You can make the obvious reference that the 60% decrease indicates a far more severe disruption to the budget and cash flow. It could also be that the first business with its 15% reduction went from an occupancy of 15% to 0%—which in itself would suggest that the first entity was struggling long before COVID-19 hit—while the second went from 100% to 40% and argue that some revenue is better than none.
Many are fooled by relative percentages that lack a firm and scaled reference point. Quite often those reporting on the numbers get lost in the mire of endless data streams and then provide conclusions that hide their vapid essentiality behind confident language.