Hospitality Industry Top Winners and Losers in the Post-Crisis Era

Here are the big winners as a result of the current coronavirus crisis:

1. Major Hotel Chains:  Currently 8 global hotel brands dominate many major markets: already 70% of hotel rooms in the U.S. and 50% in the U.K. belong to branded properties. 58.3% of roomnights, dominance in the corporate travel and group markets, comprehensive technology stack, expertise in maintaining and increasing occupancy and RevPARs in post-crisis, unparalleled direct channel distribution, 2x lower OTA commissions and 3x-4x lower dependency on the OTAs.

2. OTAs: The OTAs have emerged stronger after all of the previous crisis and calamities: 9/11, SARS, MERS, the recession, ZIKA, H1N1.. This "online planning and purchasing education" has created millions of converts and believers in online travel planning and booking, which will benefit the OTAs immensely.

3. Automation and Robotization of the Hospitality Industry:With labor costs constituting 33%-38% of overall operational cost and top line revenues plummeting, owners and managers will be looking to curtail costs and boost efficiencies. Next gen technology applications, automation, robots and devices will be replacing or augmenting back office operations, housekeepers, porters, reservation staff, front desk clerks, concierges, porters, line cooks, wait staff, etc. with robots, automation, AI-powered mobile check-ins and self-check-in and self-ordering kiosks etc.

Here are the biggest losers as a result of the coronavirus crisis:

1. Traditional and brick-and-mortar travel intermediaries: Even before the crisis the traditional intermediaries have been steadily losing market share. In the U.S. from more than 30,000 travel agencies 20 years ago, there were less than 9,000 left before the crisis. In the UK from nearly 9,000 travel agencies back in 2000, today there are less than 4,300 left

2. Destinations relying on long-haul or foreign feeder markets:

Drive-in and short-haul feeder markets will be the first to "wake up" in the immediate post-crisis period.Destinations relying on long-haul, fly-in or foreign feeder markets will experience very slow and painful recovery, which will extend well into 2021.

3. Independent Hotels:

The number of independent hotels has been shrinking for over 15 years. By adopting an asset-light business model and introducing soft brands, the major hotel chains have been aggressively expanding their global networks. In the post-crisis environment independent hotels will not be able to compete with the major brands for the fledgling travel demand and will further rely on the OTAs for their distribution.