Gates Hospitality CEO Naim Maadad on the positives and negatives of long-term hotel stays

Published: 9 August 2020 - 5 a.m.
The COVID-19 pandemic has really changed the usual lifestyle habits of mankind the world over. The hospitality industry has been hit hard due to this paradigm shift, too. When people are home-bound and hesitating to venture out, flights have been grounded and a medical solution is still a distant dream, there is no wonder that creative and innovative out-of-the-box ideas are being explored.

With jobs at stake and disposable incomes shrinking, it is but natural that people want to save and hang on to their kitty with both hands.

When offered a fully-furnished chic hotel room, luxury class furniture and fittings, round-the-clock housekeeping and room service, in-room coffee-makers, free access to WIFI, unending stock of miniature bathroom toiletries, 20 percent discount in the in-house restaurant and bar, 24-hour Gym, rooftop pool, no additional monthly recurring expenses, the hotel long-stay would definitely sound a very tempting alternative for the regular home rental agreement.

In these pandemic times, with job uncertainty looming large, given the option to pay month-by-month with no long-term restrictions of an annual contract and the freedom to move from one hotel to the other – it would make perfect sense. An added bonus is the lack of hassle when it comes electricity, water and internet access. So, no utility bills.

Having looked at the advantages of such an arrangement, let us now look at a few limitations too. Agreed that you would be paying less for the hotel room stay, but most certainly you would be compromising on the space you would normally have in a regular apartment – be it a studio, one bedroom or two bedroom. Another minus would be the lack of a community feel in the hotel accommodation, and if there are people in nearby rooms who are out to party during a holiday – the decibel levels would leave you with a lot to desire.

Every hotel has its own rules and regulations as to what is permitted to be brought in as food and beverages – as well as inviting people stay with you overnight. So definitely be aware of the restrictions before you regret the decision.

Now let me switch sides and think from the hotel owner perspective. Such an arrangement would definitely be an additional revenue generation source and contribute a great deal to have the team engaged as well as assets to be used, and hence not have the abandoned feel.

There are fixed expenses when running a business and these need to be paid even if not used. Such expenses would definitely find a source in such short and medium time agreements.

There’s also the opportunity to earn additional revenue for a longer period of time. A different pricing strategy should be used for the long stay rooms in order to encourage guests to book for extended stays. It would be feasible to attract a different target audience. For example, one may be relying heavily on leisure travellers, but with a long stay room, one would be able to market the product to people who are in an uncertain position from a job perspective, and hesitant to commit to a long-term lease at an apartment. So it’s a perfect stop-gap arrangement to mutual benefit.

But, it is more of a short and medium approach for people looking for a price tag including value-added services. In the long term, it would certainly not be a sustainable approach for hotel owners and stakeholders, as the projections, budgets, financial liabilities, expenditure are all based on the normal pre-pandemic business model, and return of investment would be crippled if the market does not re-align its course by the end of 2021.

With more than 28 years of hospitality experience globally, Naim Maadad is the founding CEO of Gates Hospitality, which owns and operates Ultra Brasserie, Bistro des Arts, Reform Social & Grill, Publique and Folly by Nick & Scott. The company also has ownership of Six Senses Zighy Bay.

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