Occupancy of top hotels less than 15 percent, are there alternatives?

Will the weekend tourists keep coming? Will business traffic pick up again? The outlook is bleak. Property owners are taking into account that they will have to look for other destinations for hotel buildings.

The colossal hotel nhow Amsterdam RAI symbolises the malaise on the Amsterdam hotel market. Where conference and exhibitiongoers are supposed to walk in and out of the architectural masterpiece, the doors are cordoned off with red and white ribbons. Closed until further notice.

“A year ago, everyone was getting ready for the IBC fair,” says Jan Steinebach, hotel expert at CBRE consultancy. “30,000 people would come to the RAI, for at least a week. Every hotel room in Amsterdam would be filled.”

The reality of today is that there are no fairs and congresses. Business travel is virtually at a standstill. This means that roughly half of the clientele for the hotels has disappeared.

Staycation

In the other half, indicated in professional circles as leisure, it started to pick up a bit in the last month, after the absolute low in spring at the beginning of the corona crisis.

Not that with the cautious recovery the turnover increased proportionally. Rooms are filled with price promotions; for a picnic in a luxury hotel, two nights for the price of one, free breakfast. “Amsterdam without tourists is a lot of fun to do,” says a couple from Drenthe who just checked in for a stay at the five-star Conservatory hotel next to Museumplein.

The marketing director of that hotel, Ruurd Hooijer, sketches the bleak picture. “In addition to the Dutch guests, we are also heavily dependent on the American market, and on the English market. But now, partly due to the quarantine measures in England, that is of course no longer the case. And I don’t expect that to come back before the end of the year.”

He hopes that there will soon be a quick test at the airports, so that air traffic can get going again. Now his hotel is running, just like the other five-star hotels, with an occupancy rate of 10 to 15 percent. “On weekdays close to 10, on weekends close to 15.”

By way of comparison, the occupancy rate of Amsterdam hotels last year was between 80 and 90 percent. There was scarcity, certainly in the months of April and May and September, October and November, the peaks in business traffic.

This year, hotel operators terminated flexible contracts with employees on a large scale. For permanent staff, full use is being made of the NOW schemes, the national government’s wage subsidy. Attempts are being made to get owners of the buildings to postpone payment of the rent. According to CBRE consultant Steinebach, most hotel and property owners do go along with this.

“But we are certainly looking at alternative uses for hotels,” says Steinebach. “Our customers want to be prepared for that. They ask for advice: Suppose things don’t go well, what then?” The plans are not concrete yet. But they have to be ready for when corona bites through for a long time, and for the post-corona era anyway, when the world might look different than before.

Hotel buildings, Steinebach sketches, could be used, for example, for student accommodation. “The demand for care property is also very high and hotels are relatively easy to convert for this purpose. Think of private clinics or assisted living for the elderly”

Alternative to Airbnb

Also extended stay is a concept that hotels now offer. “Aimed at guests who need to stay a little longer in a hotel, for example for a project in Amsterdam,” Steinebach explains. In addition to accommodation, the hotel also offers workspace and the opportunity to prepare your own meals. Steinebach: “It can serve as a good alternative to Airbnb

Previous crises have shown that the hotel sector can quickly recover, thanks to the appetite for travel that seems to be ingrained in many people. Now the uncertainty is great. Will there be a vaccine? Will travel restrictions be relaxed? Will the government continue to provide wage subsidies? Won’t businessmen visit each other again? The hotel industry can only speculate about the answers for the time being.