To say the travel industry has been hard-hit by the Covid-19 pandemic is an understatement. Around the world, some airlines and hotels have been decimated by the total halt of international travel, and the industry is struggling to stay afloat. However, Swire Hotels managing director Dean Winter is confident that the industry will weather through. All that is needed is a combination of agility, resolve and open communication with staff and stakeholders alike.
In May, holiday home rental platform Airbnb laid off 25% of its staff — about 1,900 people — as a result of the Covid-19 pandemic. This is in addition to the pay cuts taken by the top executives and founders. Yet it was not enough to halt the near-total decimation of the immensely popular travel accommodation website, a staple of budget and luxury travellers alike.
Across the world, the travel industry is facing an unprecedented shock to its system.
Airlines’ passenger revenue is estimated to plunge by US$314 billion ($433.1 billion) in total — down 55% from 2019 levels — according to the International Air Transport Association. Not only that, job losses in the travel industry could reach more than 100 million this year, according to World Travel and Tourism Council estimates.
All this spells truly bad news for an industry that has seen an incredible rise over the last decade, as budget airlines took off, making travel more accessible and affordable than ever before. Websites like Airbnb provided even more options to travel on a budget, offering up stays in strangers’ homes for far less than conventional hotels. Even with that model, Airbnb — a company which reported a gross revenue of US$4.3 billion in 2019 and a year-on-year growth of 21% — could not withstand the onslaught of the pandemic.
Yet, not all is doom and gloom, and managing director of Swire Hotels, Dean Winter — a 25-year veteran of the hospitality industry — is clear-eyed and cautious about the future of travel.
Swire Hotels is a part of the Swire Properties group, a Hong Kong Stock Exchange-listed company based in Hong Kong, with investments focusing on mixed-use developments in the Chinese mainland, Singapore and the US. Launched in 2008, Swire Hotels oversees Swire Properties’ collection of urban hotels in various cities, namely: The Upper House in Hong Kong, The Opposite House in Beijing, The Temple House in Chengdu, The Middle House in Shanghai and EAST in Hong Kong, Beijing and Miami.
Baptism by fire
Winter, who came into his role just recently, laughs as we point out that his transition into the role (from Group Director of Operations previously) was indeed a baptism by fire. However, Covid-19 is not Winter’s first brush with tough times.
The London-born Englishman has lived and worked in Asia for over two decades, and has been with Swire Hotels since 2006, mostly in the development and operations role, and was integral in the opening of the properties currently under the stable of Swire Hotels.
Winter, who began his career as a chef in London (as he puts it) “before Jamie Oliver and before being a chef was considered cool” packed his bags when he was 25 and moved to Hong Kong in 1992. “I had itchy feet,” he says, “and I thought, well, I did not have any dependents or debts so I’m just going to travel while I still can.” Hong Kong was an easy choice, he says, being a British colony and while there, he “knocked on doors and was fortunate enough to join the Mandarin [Oriental].”
“It was a very adventurous part of my life which I look back on very fondly. I never thought I’d have stayed as long as I have. I sort of told my mum I’d be back in a couple of years, and by the time I did go back, I’d had married a Hong Kong Chinese wife and had children,” he adds, laughing.
Prior to Swire Hotels, Winter spent about 14 years in various roles with the Mandarin Oriental, mostly in Hong Kong; and for a few years (between 1992 and 1997) was also in operations at what was then known as the Oriental Hotel in Singapore (now known as the Mandarin Oriental). His decades in the hospitality industry in Asia has certainly stood him in good stead: He had weathered through both the 1997-1998 Asian Financial Crisis and the SARS crisis in 2003 — both events which had also heavily impacted the travel industry, though perhaps not with such severity as Covid-19.
However, Winter admits that Covid-19 has been drastically different to SARS or even the financial crisis.
“It’s so different, and we thought, naively, back in February that this will be over in a month of two once the weather gets hot; like it did with SARS. But it’s extremely different, and there’s a feeling that we’re really not out of it. The glimmer of hope from maybe five or six weeks ago, is gone again, and it’s depressing and worrying.”
Hong Kong’s battle with Covid-19 had seemed to be won about a month ago when it relaxed its social distancing measures. However, in just a span of two weeks, cases have risen again, with over 700 new infections, with concerns of a third wave seeing a return to strict social distancing measures.
“And it doesn’t matter how you try to remain optimistic and positive, or sugar coat it to the employees — there’s no there’s no way around it as it is, and it [Covid-19] will be here for a while,” he adds. Future planning As such, planning for the future of Swire Hotels is no easy task.
With all the uncertainty surrounding the virus, and with little hope for normal travel to resume at least until 2021, Winter is conservative in his planning. “As we plan for the next financial year for the group and look ahead, we’re being extremely conservative about when we can expect with [what we see is] the ‘three waves of travel’,” he says.
Winter predicts that the first of the three waves of travel coming back to life will be travellers from mainland China coming through the Hong Kong-China border which, although not happening yet, is easy enough. “There’ll then be the Southeast Asian and Asian markets which we work very closely with — Thailand, Vietnam, Singapore, South Korea, Japan, and Taiwan — all big markets for us, and in both leisure and business travel. And then the third, of course, is the international travel and that latter piece is probably some 12 months away.”
Already, says Winter, the occupancy rates of their properties in China have begun to pick up, as domestic travel within the huge Chinese market returns. Ultimately, however, to weather through the crisis — which no one has answers to as to when it will end — is to focus on building resilience, trim away excess fat, and keeping staff motivated and in-the-know.
“We’re very fortunate that we’re very well resourced by our owners, who are long term thinkers and really value the hotel business as part of the Swire Properties mixed-use business model and we’ve had some very sensible discussions about the medium term and how important the people part of our business is,” he says.
Indeed, the human capital of the business, says Winter, is key to getting through these times.
With help from government subsidies, the business has implemented a hiring freeze, and implemented job sharing, or ‘switching’, so to speak. “Up until recently, we had empty rooms but busy restaurants, so we moved people around the hotel and restaurants to keep them busy, and to avoid bringing in casual labour. By moving people around, it’s definitely helped, but that’s a very different way of working.
“But in order to do that and do it well, it requires a lot of communication, a lot of town halls and being visible in management and being visible in the hotel so that you can be there for the team, and all the kind of common sense management things that you need to do in order to get teams through difficult times like this,” he adds. This means showing up and being open in communications with staff, says Winter.
“Frontline employees don’t have access to alignment meetings, for example, and they’re probably wondering, how long is this going to go on for? And so the only way to give them a sense of where [the company] is heading is to just keep communicating with them.”
It is the resilience of the people in the industry, Winter feels, which will see the business through. Admittedly, morale was “touch and go” in the early months of the pandemic.
“I remember in the China properties during Chinese New Year, we had guests arriving at some of the hotels from Wuhan. And our general managers would call and ask, how do we handle this? And we realised we had to just get on with it, that if the guests are not showing symptoms, we can’t refuse [them].”
With this in mind, the management has given their staff the training and ‘equipment’, as it were, to proactively promote social distancing, to work differently and treat guests differently within their hotels. “I sort of speak on behalf of my leadership colleagues in the hotels, because they’re the ones who are, you know, with the teams [on the ground]; but morale really comes from your ability as a leader to be visible and be there for people, to listen and empathise and take the pressure off people by just reassuring them and being around,” he says.
“I think as a business leader, if you’re not around, then I think people will start to worry.”
“When we were at a period where we had no paid leave like most of the industry, we had a big town hall when we talked about that, and there was a lot of buy-in to that, because people could understand it was necessary, but then when we stopped it, which we did at the end of May, that was a morale booster,” he adds. “And as we move ahead into the second half of the year, all you can do really is just be with your teams. And if they need to express their concerns, that’s okay.” T
here have been moments where you can see on people’s faces that they are concerned about it, Winter says. No effort has been spared to ensure the junior members of the teams are not affected too greatly, and it is upper management that has been volunteering to take a bulk of the pay cuts.
“That, I think, has sent a very strong message; because morale is really important. At the end of the day, you are also asking them [the staff] to continue to meet people and greet people and serve people,” he adds. “But,” says Winter, “[The staff] are not demanding much from you, are they? They just want to be kept in the loop and, and they want to know that you’re around and if you can do that in a sincere and genuine way, I think then that’s fine.”
“We’re obviously learning how to do things differently with reorganizing, and trimming any fat that’s lying around, trimming where we can,” he adds.
Still, Winter is under no illusion that the industry is out of the woods just yet. If occupancies do not return to the levels which would be sustainable, even when entering into the first quarter of the next year, then it would be quite worrying.
“Then I think [the industry] will start to really worry about how much longer can we see these red numbers for how, and how the resilience of the industry will withhold in the long ride? I know I do. Although we’re a small business in comparison to the big international brands, we still employ close to 3000 people, and that’s a lot of people. And you do think about that; you think about your responsibility as an employer. And you hope that we will, as an industry, be resilient.” “I think our resilience is going to be tested and unfortunately, I do not think it’s been fully tested yet,” he adds.
But one thing on the public’s mind is what travel will look like post-Covid-19. Consensus seems to be that it will be drastically different to what we have been used to, and what we expect from the hotels. To this, Winter has a surprising answer.
“I’ve been asked that question a lot in the last couple of months. I speak to my industry colleagues a lot in various parts of the world, and my sense is, after reflecting on that question for the last eight to 10 weeks is that: I don’t think we’re going to see huge shifts in the proposition from hotels."
“There may have been a time where people were thinking, aeroplanes are going to change and the number of seats are going to be reduced; or how hotel operations and how they engage [with guests] is going to change,” he says.
“I actually don’t think it is going to change that radically. I think you’ll find what will be normal will be, say, easy access to sanitising products and that it may be as common as say a bottle of shampoo in your hotel room, or frontline employees continuing to wear masks, but you’re going to see a lot more discreet ways to do thermal imagery for example, so you can stop sticking a temperature checker in your guests faces.”
“Because I think there’ll be a bit of fatigue around things like that. Whilst on one hand, you want to be able to demonstrate that you’re being considerate, responsible and protecting people. But on the other hand, it’s a hotel, not a hospital — and I mean that with the greatest respect. I just don’t think that the industry needs to reinvent itself [entirely],” he muses.
It would not change the fundamental proposition of a hotel, he says. “I think at the end of the day, let’s fast forward 18 months to, you know, beginning of 2022 for example, when we sort of put this all behind us, hopefully. I think people will want to get back to what travel used to be like and what staying in a luxury hotel used to feel like. And they won’t have a lot of tolerance for too much interference in that experience,” he suggests.