According to a new analysis from CBRE Hotels Advisory, many of the expenses that traditionally have been fixed for US hotels will become more flexible in the future as operators adjust to the post-COVID-19 “new normal” and have to operate more efficiently.
It might force hotel operators to think differently about zero-based forecasts for annual budgets, as well as outsourcing and centralising some functions within the property.
During the pre-COVID period, the variable expense for the segment was 60-65%, rising to 75-80% during the pandemic. Post-COVID, the fixed expense for rooms is expected to be 25-30%, with variable expenses 70-75%.
The report states that many limited-service hotels are cutting staff by more than 70%, keeping on fewer than five full-time employees on the payroll, while full-service hotels are operating with limited personnel and amenities.
New technology will be needed in the post-pandemic era, another expense.