299 | Conserve Cash, Save the Hotel: What asset managers are doing to survive the long COVID winter




Lodging Leaders show

Summary: <br> {caption}Since March 20, the early days of the coronavirus crisis, more than 1,700 hotels in the U.S. reportedly have closed, most of them temporarily. For the other 55,000 properties that have remained open, owners, operators and advisers have been decisive in implementing strategies that have cut costs and conserved cash. Long Live Lodging interviewed two asset managers who share what they’re doing to keep the industry alive as a vaccine offers hope for recovery in 2021.{/caption}<br> With vaccine rollout amid virus surge, lodging industry positions for recovery<br> ‘The mandate from the ownership is: “If I can lose a half a million a month being closed, I better not lose more than that by being open.” And so that sort of became a true benchmark…’ – Larry Trabulsi, CHMWarnick<br> By mid-March <a href="https://www.linkedin.com/in/robert-cole-2971969/" target="_blank" rel="noopener noreferrer">Robert Cole</a> knew the U.S. hotel industry was in for a year so “ugly” it would defy all other downturns he had witnessed in his storied career.<br> However, at the end of the third quarter, <a href="https://www.hvmg.com/" target="_blank" rel="noopener noreferrer">Hospitality Ventures Management Group</a>, the company Cole founded in 2001, announced its portfolio of 50 owned and managed hotels had outperformed the overall industry amid the coronavirus crisis. It cut operating costs by $16 a room compared to the industry average and generated a gross operating profit of nearly $10 a room over the industry norm.<br> Cole, chief executive at HVMG, credited his company’s decisive actions in the early stages of the pandemic. He also acknowledges the crisis is far from over, especially as the rate of COVID-19 infections has surged over the past few weeks.<br> The coronavirus crisis has tested the mettle of Cole and his cohorts, veterans of a hospitality industry that looks nothing like it did at the beginning of this year.<br> As 2021 emerges with a vaccine and more federal relief, Long Live Lodging interviewed Cole and <a href="https://www.linkedin.com/in/lawrence-trabulsi-69a3a12/" target="_blank" rel="noopener noreferrer">Larry Trabulsi</a>, vice president of asset management at <a href="https://chmwarnick.com/" target="_blank" rel="noopener noreferrer">CHMWarnick</a>, about the strategies they deployed to keep hotels open and operating over the past nine months.<br> <br> {caption}CONSERVE CASH, SAVE THE HOTEL: Episode 299 of Lodging Leaders podcast explores what owners, operators and asset managers are doing to survive the long COVID winter.{/caption}<br> In the beginning<br> “I still remember to this day, it was a Sunday night and the second week of March where we had a team meeting with my executive team and we unfortunately saw a lot of the writing on the wall,” Cole said.<br> The HVMG team knew “this was going to be very ugly; business was going to contract in an unprecedented fashion,” he said.<br> HVMG’s headquarters is in Atlanta, Georgia. As it strategized how to save its business, Larry Trabulsi and others at CHMWarnick, an asset manager in Beverly, Massachusetts, mobilized to advise its clients on how to navigate through the COVID-19 storm.<br> Today, Trabulsi and his cohorts are grappling with the reality that recovery is a distant port. “I think the duration (of the crisis) is the big wild card here,” he said.<br> Trabulsi recalls attending the Americas Lodging Investment Summit in Los Angeles in late January and hearing a little about a new viral outbreak in China. “No one really knew what it was and a few people in the airports were wearing masks, but that was about it,” he said.<br> Some people wondered if the illness would mimic the SARS outbreak in 2010. Whatever it was, most people figured it would impact a few markets for about two months.<br> “Fast forward to mid-March – absolute devastation,” Trabulsi said. “And even from mid-March, it was,