Three weeks after deconfinement, are you already feeling a resumption of activity?
Olivier Cohn - It's still rather tentative, but momentum is building. The recovery is gathering pace week by week. Admittedly, we are still a long way from the booking levels recorded in 2019, since we are only 45% away from what we were doing this time last year. But bookings in leisure destinations for the summer period picked up again in the first two weeks after deconfinement. And in the last few days we have seen the return of the corporate marketwith bookings for June, so it's more business-driven. It's still fairly light, but it's starting to take off. That's why we're pushing our hotels to reopen. We have to find the right balance between satisfying customer demand and achieving a minimum level of profitability. But I'm convinced that by reopening ahead of the others, we can win market share. It allows us to introduce our establishments to people who didn't use them before.
How have you spent the last few months?
O. C. - Like virtually the entire French hotel industry, most of our hotels closed their doors in mid-March. Only around fifty establishments remained open, either to accommodate staff on the front line of the health crisis, or guests who were unable to return home because of the confinement. For all the others, our job was to accompany their closuresYou don't close a hotel in the usual way. A number of things need to be done to make it safe and to ensure that it can be restarted under the best possible conditions. After this first stage, the second was to understand the nature of the crisis in order to prepare hoteliers for it. How long will the crisis last before a return to better fortunes? What support is the government offering? You don't prepare in the same way if the crisis is only short-lived or if it is likely to cause difficulties for a long time to come. Which seems to be the case.
How is the reopening of Best Western establishments progressing?
O. C. - Today, 155 of our 300 hotels are open, more than half the network. And we will be 70 % in the fleet by the end of the month. All hoteliers are keen to reopen as soon as possible, but for this to happen, the economic conditions have to be right. In this context, establishments in the Paris region will obviously take longer to reopen, as the region depends on two major markets: international tourism and business travel for events. As soon as the airports are closed and the major national and international trade shows are postponed, there won't be enough traffic for the hotels to at least break even, i.e. at 30%.
In the corporate market, the link between the resumption of travel and the cessation of teleworking is an important one.
Some establishments also depend on individual business demand. What is the current level of demand?
O. C. - Some hotels depend on the corporate market, and many companies have opted to continue teleworking or not to organise meetings at head office. until at least September. These decisions may be reviewed depending on the context. Some companies may return to the office sooner if the number of new cases continues to fall. In this market, the link between the resumption of travel and the cessation of teleworking is an important factor.
What about the meetings and seminars market? Are you feeling an upturn there too?
O. C. - I don't think the seminar market will take off again before September. On the other hand, small executive committees are starting to pick up again. There's a need to get away from it all, to put the period behind us, but also to get away from it all. getting back into fighting orderto rework strategies. We realised that many companies had been working remotely for three months and that there was a real need to see each other, to work together over half or full days. The employees saw each other by videoconference, which has many virtues. But when you're on the phone or on video, you don't see things in the same way, and you don't take decisions in the same way. What is imperceptible cannot be felt. That's why, in response to this need, we created the Reconnect offering. We are offering all those companies that need to get together to do so in dedicated spaces where sanitary protocols are implemented.
What impact could the spread of teleworking have on the hotel industry?
O. C. - It's still hard to say. I think that teleworking has been a very good thing, but at the same time it's complicated to work together without a social link. The number of days teleworked per week will undoubtedly increase in the future. However, many companies and employees have realised that you can't telework five days a week. Something missingIt's not the same thing as going out to meet customers. What's more, video marketing is not the same thing as going out to meet customers. So the development of teleworking will certainly have an impact, but the need to travel and meet up will always be there.
The resumption of activity in your establishments is also subject to health regulations. What have you put in place?
O. C. - Along with a large number of hotel operators, we took part in the negotiations with the French government. the health protocols required for recovery. At the same time, we worked on our own protocols. As a chain, guaranteeing our customers the safest possible stay is one of our commitments. This involves defining all these protocols, training staff and sourcing products. We're changing a lot of things, such as cleaning products. For some years now, we've been favouring environmentally-friendly products. The fact remains that these products, while cleaning, are not virucidal. But that's a necessity these days. So we have to source the products and find suppliers capable of providing them. And God knows that logistics has had - and is still having - some rather difficult times. But all this has made it possible to prepare for the reopening of the establishments.
You can't see a smile, but you can still hear it. It comes through the spoken word.
How do you reconcile barrier gestures and hospitality?
O. C. - There's a fine balance to be struck. We have an obligation to both our customers and our employees. We can't skimp on this point: their work spaces must be safe. Masks, hydro-alcoholic gel, Plexiglas at reception: all these things protect hotel staff and travellers alike. So, even if the welcome is a little colder than usual, if you can't see the smile, you can still hear it. It comes through the spoken word. The French, who are currently the only customers, have clearly understood the need for these measures. It reassures them. Feedback has been fairly positive, with comments such as: "Despite the barrier gestures, despite the mask, we were very well received.
In the longer term, what impact will the crisis have on the hotel sector? Could some establishments fail to overcome it?
O. C. - We estimate the decline in sales over the year at -50%, which will undoubtedly be the norm for the entire hotel sector. For 2021, the decline should be between -25% and -30% compared with 2019. Although this is still a long way off, and it is difficult to have a very clear vision, I do not expect a return to breakeven before the second half of 2022, after a first half still running at -5 or -10%. If you put these 18 months of sharply falling revenues into perspective, there will be a lot of room for manoeuvre in the French hotel industry, as in the restaurant sector. Will there be any here? I hope not. There will certainly be a few cases, but chain hotels are better equipped to resist than independents. They have the capacity to bring in business and help hoteliers to better anticipate the consequences of the crisis. Secondly, chain hotels are usually larger than average. As a result, they generate more sales and reach a wider range of customers.
Which, in a way, could have a positive effect on the development of the Best Western brand in France?
O. C. - Although we have had to process fewer membership applications in recent months, and this lost time will not be made up in 2020, we are maintaining our policy of our development objectives for 2021 and 2022. I am a very confident in terms of the number of cases we'll be looking at over the next few years. I think that a lot of independent hoteliers - and others affiliated to chains that haven't done their job perfectly during the period - will have the reflex to regroup. There will be an interesting development dynamic for hotel chains in the coming months. We're starting to feel it, with a number of good deals coming in over the last three weeks.
