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New rules, new solutions

The hotel industry is already changing to meet post-pandemic challenges

While these times bring so much uncertainty, of one thing remains clear: the need for authentic human connection and care will always be at the heart of business and life.

The MC Hotel makes its mark as the first new full-service hotel in Montclair in 80 years on Aug. 15, 2019.

The MC Hotel makes its mark as the first new full-service hotel in Montclair in 80 years on Aug. 15, 2019. – NEIL GRABOWSKY

Before this unprecedented crisis, the hotel industry in New Jersey was thriving. In a very short period of time, our Montclair investment property The MC Hotel (A Marriot Autograph Hotel) was already contributing greatly to this vibrant health. Our revenues climbed weekly, as average revenue per room followed suit. At the beginning of March, we opened the much anticipated outdoor portion of the rooftop bar. This beautiful setting offered patrons spectacular views of Manhattan which they could enjoy while sampling original craft cocktails, gathering around the fire pit and mingling with friends or dancing the night away. In fact, because the interest in the rooftop bar grew so rapidly we chose to open earlier than planned, giving patrons a couple of extra hours to linger. Despite only being opened months earlier, corporate and social events were booking at the hotel well into 2021. The New York appeal with a New Jersey price tag was a smash fit, and we started seeing sell outs for our spaces. What could be better?

Then, all of this came to a halt almost immediately when President Donald Trump issued the “stay at home” order, followed by Gov. Phil Murphy’s shutdown. One week later, our partners at the hotel made the responsible and unavoidable decision to close the MC Hotel and furlough almost all of the employees.

These painful decisions felt like riding a bike at top speed and hitting a sand patch. We are hurtled into planning for this unforeseen future that COVID-19 has forced upon us. Here in New Jersey we are living and operating in the “epicenter” of this pandemic. The largest city and one of the largest ports in the country has the largest number of cases, creating an uncertain future. There is no clear path directing us where to go next because we have never experienced anything like this. While previous virus outbreaks like SARS and MERS were serious and lethal, they did not shut down the global economy.

Uncertainty is the hardest form of change because it prevents clear planning. We can only be agile and flexible and try to meet each decision with excellence. The potential for silver linings exist as we try new and creative ways to move forward. And, we know there is virtually no possibility that the hotel or travel industry will stay shut down for too long. Industry experts such as Christopher Nassetta, the CEO of Hilton, speculate that it could take several years to return the levels seen in 2019.

But return it will I believe, and I also believe that there is a potential for it to return perhaps stronger than ever. Smart and motivated professionals are already focusing their full efforts to ensure this can happen. The entire industry will have to adhere to strict guidelines for health and hygiene. Hotel chains that emphasize and demonstrate hygiene as the highest priority, are likeliest to get high levels of occupancy. Marriot and Hilton will be at the forefront of establishing and upholding such standards.

The NYC skyline view from the Hampshire Room at the MC Hotel in Montclair.

The NYC skyline view from the Hampshire Room at the MC Hotel in Montclair. – PATRICK TANSEY

In the past, seasoned business travelers have used travel websites to find the best deals and lowest room rates. I anticipate a significant decrease in price shopping and an increase in hygiene shopping ensuring the property they visit is kept up to the highest health standards. I foresee travel sites beginning to incorporate “cleanliness” ratings that travelers are able to sort by.

Most tristate hotel businesses like ours focus on corporate travelers and events. And should the restrictions on gathering sizes continue beyond the short term, there is cause for concern. However, new approaches are assured. We are already seeing this in some of the cities that have relaxed their restrictions. New rules create new solutions.

In real estate, the gold standard has always been, “location, location.” This is especially proving true during this pandemic era. We are fortunate that our location is in a great walkable city like Montclair. I anticipate significant growth in the suburban hotel market as people may try to avoid the larger cities.

This is likely to become an even more appealing option to the tristate business area, especially those who want a “New York City” experience without the risk of crowded sidewalks and mass transit. And while Zoom has proven to be a popular solution to in-person meetings, we are already seeing Zoom fatigue and increases in depression as people crave face to face interactions. So even if 6 feet apart, the live human dynamic will remain a vital element to conducting business now and in the future. In fact, perhaps even more so after we have all experienced the distress of not having it.

So, the world will be changed when this is over, there is no doubt about it. Yet people will always need connection; it is the pulse of our humanity. There is no society without social contact. Safety procedures and protocols will surface and be embedded in our new now, and that is as it should be. And I truly believe and hope that we can hold a vision of celebrating the grand re-opening of The MC Hotel and the ending of the pandemic as we re-emerge into what will be our new normal.

Jeffrey C. Sica is president and CEO of Circle Squared Alternative Investments.

Editor’s Note: This article was updated on May 18, 2020 12:45 p.m. to reflect in paragraph 6 the opinion was that of the author. 

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