The coronavirus pandemic has impacted the lodging market worldwide and devastated the hotel industry. It has affected the cash flow and other such aspects that affected the operation of the hotels. High fixed expenses with low demand made various hotels curtail their services. As a result, most of them must temporarily close their occupancy while some were on the verge of sale. Several public spaces were closed down in the early parts of the year, and around 10% of these were hotel rooms.
Since then, various hotels have started their operation by taking advantage of the demand for national lodging. With the opening of hotels, it started providing shelter to the workforce population and reduced the market by 70%. However, the hotel owners have motivated the low supply of residential units for the workforce population. However, it would help if you did a lot to balance demand and store in the housing sector.
- Evaluate market location
Of all the factors that a hotel owner must bring under consideration while converting hotel rooms into affordable workforce housing, location is the most important. Maxwell Drever reveals that hotels located in urban city centers and highly dense gateways are the best options for benefitting the corporate sector. On the other hand, hotels in suburban areas will not get an easy flow of guests because the workforce requires shelter in the city centers.
- Explore hotel positioning
Hotels with full-service and a viable number of guest rooms and meeting spaces are the most appropriate option for conversion. Vast full-service hotels need a significant base for generating occupancy, supporting heavy staff requirements, and meeting expenses.
- Improving labor structure
Hotels with a vast amount of labor can ensure better operation and flexibility. If you have limited operational flexibility, you cannot procure revenues. The high cost of the structure with other aspects will not help you get the profit you desire. Remember that the conversion process requires time and money. Hence, Maxwell Drever states that the status quo will get gravely affected if labor power is not there.
- Management and load of the brand
Unencumbered hotels by management or brand are subject to redevelopment. However, there are drawbacks to brand management. Lack of operational facilities and high fees need consideration.
The structure is likely to affect the hotel in the long run. If your hotel does not have the advantage of brand management like a robust loyalty program and sales platform, it will be difficult for you to drive profit.
Hotel properties can get repurposed into residential units by paying attention to the zoning and legal restrictions. Converting rooms into a rental apartment is not a one-day activity. You have to pay attention to the legal aspects to play a significant role in real estate. Hotel owners must also work on a proper layout and building structure. You must know the gross building arena, which may transform into rental apartments. New construction is always a costly process. Hence, proper use of resources for repurposing the hotel rooms into the residential unit is better.