The challenge of opening a new hotel during a pandemic
As every hotelier knows all too well, the COVID-19 pandemic has proven to be a challenging (at best) and terrifying (at worst) time in this industry. Many plans for expansion, new construction, and increased services have been put on hold. Some hotels have closed, and many are in a holding pattern while the world slowly gets back on track and the ship begins to right itself.
But, in spite of the uncertainty, some properties are implementing new plans for growth and looking to a more certain future. For example, when news began to spread about the upcoming launch of Meliá Chiang Mai, the first five-star hotel to open in Thailand since the onset of the pandemic, the response was generally one of surprise, if not outright pessimism.
“Wow, you’re brave.” “It’s a grim time to run a hotel, much less open a new one.” “Why, of all times, open a new hotel now?”
Despite the arched eyebrows, there’s indeed a list of compelling reasons behind this new 260-key urban hotel’s opening, and there are lessons to be learned that can be implemented in properties big and small, old and new.
Chiang Mai hasn’t welcomed international tourists for 18 months and counting. The devastation on the ground is palpable. According to the Northern Chapter of the Thai Hotels Association, a survey of some 40 hotels in Chiang Mai has revealed less than 10% occupancy throughout the pandemic. And it’s estimated that more than 70% of people in tourism-related businesses have lost their jobs, many of whom have mouths to feed and bills to pay.
But Meliai Chiang Mai will open with about 150 employees and will eventually employ a total of 240 people, more than 99% percent of whom are Thai nationals, thus providing much-needed employment and wages, which will allow the workers to support and take care of their families.
As there isn’t much else happening in Chiang Mai at present, word about the new hotel spread like wildfire throughout the local hospitality industry. During construction, the hotel received hundreds and hundreds of job applications from people locally and across Thailand even before making an earnest effort to advertise positions or conduct recruitment drives. These job seekers are people with strong hospitality experience who lost previous jobs as a result of COVID-19, so the large number of quality applicants isn’t surprising.
As can be expected, there have been some issues opening a hotel during these unprecedented times. There have been delays with the shipment of construction materials and supplies from overseas, and the pace of construction has been impacted by interprovincial lockdowns, causing challenges with regards to labor and the movement of goods.
But, in contrast to what many in the industry are reporting, hiring hasn’t been as big a challenge because the people in this area are keen to be part of something exciting happening in their industry and the local talent pool is immense. This is at least partly due the relative lack of alternative employment options currently in the area, but it has been proven that a healthy workplace culture can attract workers in a place even where jobs are more competitive.
In addition to being hugely beneficial for local workers and their families, prompting a ripple effect for the local economy, Melia Chiang Mai has provided a morale boost for the local tourism industry, sending a signal that things will get better, though it’s still difficult to pinpoint exactly when the industry and economy will improve thanks to COVID-19’s constant moving of the goalposts.
LESSONS FOR ALL
Opening a new hotel or expanding an existing one doesn’t have to be an all-or-nothing proposition, particularly during a pandemic even though business will be tough while international travel is still restricted. But, taking a glass-half-full approach, this affords management teams a unique opportunity to fine tune operations before large numbers of travelers return. Despite all the research that’s conducted before a hotel opens or a new service is added, there are always things we expect to appeal to guests that don’t and vice versa.
For example, it’s much more difficult to improve your culinary landscape and wellness offerings when you’re tied up with the demands of the hotel’s daily operations. Based on what a hotel initially learns about its guests’ preferences, management can better focus on scrutinizing and improving the guest experience relatively quickly wherever possible.
Selfishly, we can’t help but be optimistic about the future of Chiang Mai’s tourism industry, as it’s one of the most popular places to visit on any travel itinerary to Thailand. But, that doesn’t mean expansion is limited strictly to hotels in exotic locales. The bigger picture is that the economy will rebound and business as usual will return. The pandemic has lasted a long time and there’s a lot of pent-up demand for travel. Will you be ready?
There’s no playbook for launching a hotel, or even operating an existing one, amid a pandemic. We’re all writing this story ourselves as we go, all the while thinking about how we’ll put it all into action. As the old adage goes, fortune favors the brave.