This article was first published in Glion Institute of Higher Education Blog.
In the second part of our interview with expert faculty and hospitality consultant Jonathan Humphries, we try to place COVID-19 in context of other recent crises that have struck the hospitality industry.
In times of crisis, experience counts. For the global hospitality industry, the current business interruption due to COVID-19 is of an unprecedented scale and depth. However, it is not the first time a seismic shock has been delivered to the industry. As such, those who lived and worked through the ‘Dot-com bubble’ and Global Financial Crisis periods have perspectives worth listening to.
They include Jonathan Humphries, who heads our BBA specialization in Hotel Development and Finance, while also lecturing to Master’s students. Outside of Glion, Jonathan is Chairman and owner of the consultancy HoCoSo, which creates new hospitality concepts for clients across the world.
Jonathan was in the hospitality business during the recessions which followed both the Dot-com crunch and the financial crisis less than a decade later. Where does he see echoes – and differences – between those times and today’s situation?
“I went through the bursting of the Dot-com bubble in 2000 when I was working at a consulting firm in London; and I was at Marriott during the 2008 financial crisis,” says Jonathan. “I think what’s notable about the COVID-19 crisis is that it is something of a combination of those previous events – both a sudden market shock and a broader economic crisis.”
Thinking back to the aftermath of the 2008 crisis, Jonathan remembers a sharp decline in corporate travel, as companies laid off staff and reined in others’ business expenses. At the same time, leisure travel also suffered, as people worried about employment prospects opted not to spend money on overseas holidays. That said, the declines in business were nothing like the sudden stop many hotels have suffered, as COVID-19 lockdowns forced them to close their doors entirely.
Hopes for the future
The comparison to 2008 is not entirely negative for Jonathan, however. He continues, “The difference between now and 2008 – for now at least – is that the financial crisis ate away at the heart of the global economy. The banking systems, their networks and investments – that was all destroyed. It meant that the center of the global economy was unwell; and it needed to be rebuilt through all the bailouts and austerity that followed.
“What’s different this time, at least at the moment, is that the structure behind the economy remains intact. Banks are still functioning, there’s still money in circulation, governments haven’t gone bankrupt.”
As such, the optimist in Jonathan believes that once the world has got to grips with the pandemic – or better still, has found a vaccine – the present ‘artificially paralyzed’ situation will be replaced by an uptick in economic activity.
“The only question that remains unanswerable at this stage is what’s been the economic destruction in the short-term,” he adds. “Obviously a lot of businesses have been hit, with many employees furloughed or laid off. Nobody really knows how long it will take for everything to pick back up; but for sure it will pick up. That’s definite.
Serving the hospitality ‘community’
For Jonathan’s own business, HoCoSo, the crisis has temporarily put the brakes on developing new hospitality concepts. However, he and his team have certainly been keeping busy, with much of their work focused on preserving the industry’s future health.
“We can’t create concepts at the moment. About one week before the crisis hit us, two of our clients won awards for best hospitality concepts. We can’t do that stuff anymore. But what we can do is apply that creative thinking to helping others; providing some solutions for what’s going on at the moment and also afterwards,” he says.
“We switched our focus from being active on projects to being active with our clients in terms of constructive dialog. The first thing we did was offer all our clients free consulting, free advisory. From day one, as soon as this crisis hit, we sent out a note saying ‘you’ve been our client for years, and we just want to let you know that, during this crisis, you’ve got free advisory with our team. You can pick up the phone, we can join a meeting, we can have a brainstorming session with you, but we just want to be there for you’. That was the first thing we did.
“The second thing we did was create a forum and a network of people that we thought were some great minds that we wanted to find; to try and provide some insight and solutions to the broader industry. We wanted to get some of those papers and insights and just allow people to have access to them. Maybe they can use it, maybe not; but it’s basically free.
“I think it’s just all about being relevant. We’re trying to keep things simple. We’re trying to build a community. We’re trying to, consequently, stay relevant. That means staying relevant for our clients as well.”
HoCoSo are advisors with a difference.
We create tailor-made and innovative solutions for clients’ hospitality-led projects by bringing together the optimum team of sector specialists.
Jonathan Humphries, Chairman and Owner of HoCoSo, and his direct team specialize in the extended-stay, co-living, and hotel-alternatives hospitality market; luxury, lifestyle and boutique hotels; and resort developments in Europe, the Middle East and Africa (EMEA). Our strengths lie in the following core services:
- Product & Concept Creation, for portfolio & individual asset developments.
- Strategic Development Projects with a focus on new-market / new-concept business expansion planning, operator selection, market and financial feasibility studies.
- Transformative Asset Management for brand re-positioning, asset re-evaluation and concept re-structuring.
- Hospitality Education for companies and academic institutions, with a focus on bespoke course development, training and teaching.
- Workshops, Keynotes and Conference Moderating for boards, leading international conferences and incubators.