Accor Pacific Chief Executive Officer, Simon McGrath.
Accor Pacific Chief Operating Officer, Simon McGrath.

The COVID-19 pandemic has allowed the hospitality and wider tourism sector as a whole to reset and design new fundamentals to power on into the next decade and beyond, Accor Pacific Chief Operating Officer Simon McGrath says.

Speaking to more than 1,200 registrants of an online webinar and teleconference hosted by CBRE Hotels about the Road to Recovery for tourism, McGrath referenced the silver linings emerging after the challenges of the 2008 Global Financial Crisis and levels of international investment from Europe, Southeast Asia and the Middle East which ultimately strengthened the sector overall.

“I think it’s quite an exciting time and so much of this period is about setting up the next decade. Yes, we need to deal with the crisis in this six-month period. We’ve then got to deal with the operational pressure for the next 12-18 months but our fundamentals are setting up the sector for the next decade and there’s no way we won’t benefit from that.”

McGrath praised the handling of the crisis by different state and federal governments, adding that domestic tourism will be the strength which helps the industry recover faster while it waits for international borders to reopen. Businesses have learned to cut costs more than ever before, with as much as 60% of the industry’s workforce resorting to government assistance programs such as JobKeeper and JobSeeker in order to survive.

Accor’s Simon McGrath said the JobKeeper program saved the company from furloughing many staff.

McGrath said at one point, Accor was “alarmingly” looking to offload up to 60% of its workforce but that the introduction of JobKeeper had alleviated this concern.

“As we look to reopening, there is a degree of excitement and enthusiasm around that,” he said.

McGrath added that moving forward, hotel owners and operators would be designing innovative new cost structures to secure their businesses both through the recovery and onward as normal life resumes. Banks and investors would be watching the industry closely as it grows into a Tier 1 global sector as the public’s enthusiasm for travel remains undiminished.

“The innovative cost structures that are now being developed by all operators and owners is a good thing. All costs have gone to base and some hotels have never seen base costs before.

“We’ve had seven years of revenue management growth and a positive sector, and we’ve all enjoyed that as we should.

“Importantly, we now see a level of costs that have been stripped back to bare and every cost that you’re laying back on is going to be something you’ll appreciate and value,” McGrath said.

Other speakers on the CBRE webinar included Tourism Australia Chairman, Bob East; hotel owner Dr Jerry Schwartz and Wayne Bunz from CBRE Hotels.