Hotels Scored Profits With Massive Pandemic Cost Cuts — But at What Price?
Skift Take
Profit margins may have increased at some hotels during the pandemic, but what about the human cost? The pandemic wiped out 10 years of hotel job growth, and new operational models are unlikely to bring everyone back.
Widespread cost-cutting initiative across the hotel industry during the pandemic actually led to some hotels finding profitability last year.
But these new operational structures and higher profit margins came at the cost of major job cuts and hotels operating at a shell of their pre-pandemic experience.
Full-service hotels that typically have amenities like bars, restaurants, room service, and spas lowered their financial breakeven points from 47 percent occupancy rates in 2019 to only 30 percent last year, according to STR.
Find all the hotel development news you need with Early Check-In, arriving every Monday morning to Skift Pro subscribers.
“I think one of the most impressive things we witnessed is the speed at which operators were forced to pivot and how well they did pivot,” Carter Wilson, senior vice president of consulting and analytics at STR, said this week at the company’s Hotel Data Conference webinar. “I can’t think of another type of commercial real estate that had to shift its entire operational strategy in such a short amount of time