Hotels and short-term rentals face Covid threat

Most hotels decided to close their business in the upcoming weeks for safety reasons and simply because of the lack of guests. At the same time, the owners of short-term rental apartments, restaurateurs and food establishments were forced to close by the government which issuing official bans for part of the industry. Despite the lack of daily operations, many venues focus on handling reservations and amending them these days, as well as maintaining relationships with customers in order to be able to efficiently return to full operation after the state of the national health emergency is over.

“The key to minimizing losses in the upcoming weeks and months might be a history of good management of the venue in the past by i.e. maintaining healthy profitability of services and cash flow, putting aside funds for renovation and investment, etc., which not only allow to create a financial backup in a difficult moment, but also indicate that the owning or managing company has not been short-sighted, but working with the long-term horizon in mind,” Andrzej Szymczyk, Associate Director Hospitality Department at Walter Herz, claimed.

In his opinion, we see currently two approaches among experienced investors in the market.

“The first one is to slow down processes for a certain period of time until it is possible to assess how the market and its prospects look like in the next few weeks. The second is looking for opportunistic real estate acquisition related to the lack of cash flow in some cases or current owners wishing to exit the hotel business,” Szymczyk added.

He believed that we still have to wait to see what happens.

(WBJ)