Electrostatic spray guns and germ zappers may be coming to a hotel near you

©Miami Herald

Measures to contain the spread of the coronavirus continue to shift — and so do responses by investors, developers, builders, banks and buyers. To track the impact, we spoke to Ezra Katz, CEO and founder of the Coconut Grove, Fla.-based investment firm Aztec.

In 1994, Katz established Mayan Properties, a real estate investment merchant bank and asset management team that invests in existing projects nationwide, including Berkowitz Development Group’s Aventura Commons Shopping Center and TPG’s Marriott Fort Lauderdale North. Mayan has invested in over 60 hotels and continues to hold ownership in over 30 hotels, including the Hyatt Centric Brickell Miami and AC Hotel by Marriott Miami Midtown.

Q: How has the pandemic influenced the local hospitality market?

A: COVID-19 devastated the hospitality industry quickly and in many ways, including causing suspension of most hotel operations; those resulted in the furlough of over 95% of the workforce. The related businesses and services, such as food purveyors and restaurants as well as suppliers to cruise ships and airlines also ceased their operations. In addition, the virtual elimination of travel-and-leisure visitors caused a significant impairment in hotel and business loans of over $20 billion that failed to meet their interest payments; this put severe stress on local and regional financial institutions. Our dependence upon tourism and the related industries that disappeared overnight also accentuated our lack of diverse economic drivers.

Q: What trends are you seeing from developers, investors and owners?

A: Developers are shelving projects that have not commenced construction as financial institutions are cutting their loan allocations to new projects generally and to hospitality projects specifically. Investors are focused on recapitalizing distressed assets. Owners are preserving their cash positions to fund the capital required to maintain ownership of hotels, which are losing significant money every day. Many hotels will fail to meet their financial obligations to their lenders and suppliers resulting in foreclosures and bankruptcies.

I dare not predict the depth of the problems that all in the hospitality space face. No one can provide us with a sense of certainty as to when a vaccine or antidote for COVID-19 might be developed. Regardless of these issues, the road to recovery will surely depend upon the availability of financing and investment funds via financial institutions and the capital markets.

Q: What strategies is the hospitality industry employing to stay afloat?

A: The actions of every hotel owner fluctuated; some closed completely and others retained minimal staffing. Minimizing expenses was the first step. Thus, senior staff undertook multiple responsibilities and performed all duties, including checking in and out guests, cleaning rooms and covering multiple shifts. Hotels are offering reduced housekeeping services and thorough cleaning at checkout.

Each hotel owner had to ask his lender for a deferral on interest payments while eliminating all capital expenditures. Several hotels were able to access business via government-related lodging while continuing to attract the limited local demand.

Q: How are hotel owners redesigning their spaces as a result of the pandemic?

A: Hotel owners will face a new paradigm in selling the public on safety during and post pandemic. The design of new hotels and modifications to existing facilities will focus on a variety of safety measures, such as electrostatic spray guns, germ zappers and adjustments to room-cleaning products. Shields will be required at all points of contact with required guest separation at all common areas. Food-and-beverage outlets will be minimized by eliminating self-service buffets and instead providing grab-and-go bags or … la carte offerings. And (there will be an) implementation of touchless technology for several services, including check in and check out.

The most notable design changes will take place in the heavily trafficked areas such as the lobby, restaurants, fitness center, elevators and corridors. These areas and amenities will be the main redesign focal points as hotel brands will look at guest perceptions of safety to measure the viability of gaining their repeat business. I also expect to see significant attention to designing new methods of air circulation and easier-to-clean fixtures.

Lastly, we can expect greater emphasis on outdoor experiences, including larger balconies.

Q: What changes do you expect in new construction?

A: Expect to see a variety of new designs to meet and exceed the guest’s expectations and experiences relative to safety of interaction with other people. Those might include breathing air from a newly designed ventilation system, sleeping in a room with minimal fingerprints from a housekeeper and leaving the hotel with less anxiety or stress about exposure to germs than one would experience in their daily routines.

The creative marketing of a hotel with ‘state-of-the-art’ safety designs or redesigns will be the key to a competitive edge needed to succeed in the future.

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©2020 Miami Herald