Current developments according to Max Luscher, B&B Hotels (budget hotels)

Max Luscher knows the hospitality industry like the back of his hand. He talked to us about how he and his B&B budget hotel chain experienced lockdown, what things have changed since then and his views on the future of the hotel industry.

What was your experience of lockdown? What is the way forward for the hotel industry?

It was a completely surreal situation. Like a bad dream with a black swan slowly floating past you and, just when you think it’s gone, the next one comes along. We had to make unimaginable changes within the space of hours and days. On hindsight, I’m incredibly proud of how well the entire team has coped and is coping with the situation. These are times when I feel and encounter humility on a daily basis.

A tough process of market consolidation is definitely on the cards. Many of our competitors will be going out of business and that means a lot of vacant hotels. Concepts that were successful in the past are going to become obsolete because there will be no more demand for them. Hotels that can’t adapt their products will lose out. On the other hand, there are opportunities associated with every crisis. The budget hotel sector will be the new heart of the hotel market. I’m sure of that. Niche concepts for other products will continue to exist, but they’ll account for a very small market share.

What things have changed since the pandemic for your and B&B HOTELS?

The work format has changed. Many of the offices at our headquarters in Hochheim are empty because we still have a flexible home working model in place. The health of our employees and guests is our top priority. One big difference that I miss sometimes is personal interaction with the staff. For me, having a coffee together and chatting in the corridor are valuable opportunities to talk to people that just aren’t the same online. We have to prepare our teams for the changes ahead. The process that has already begun won’t be over any time soon and the crisis is a catalyst for irreversible change. But it certainly isn’t all negative.

How digitalised is the hotel industry right now?

People have been asking us that question for years and the answer hasn’t changed much. Not a lot has happened. Many hotel operators lack the basic framework for digitalisation, and by that I mean fibre optics, open systems and the right employees. In other cases hotels have gone over the top – and often in the wrong direction – by introducing digital gadgets that neither improve the guest experience nor reduce costs. I think room service robots and light control touch pads are unnecessary gimmicks that don’t contribute to the hotel’s bottom line. Very few of the ideas out there are genuinely innovative and easy to implement. Too few. And that’s unlikely to change in the foreseeable future because most hotel operators have no money to invest at this time.

What are the factors of success for future hotel concepts and what role will digitalisation play?

Successful hotel concepts will have a clear focus. Hotels with cost-intensive full-service offers, large MICE areas, and generally everything that isn’t accommodation related, will struggle. Big hotels are also on their way out. Those with 400 and more rooms will be scrapped because they don’t have a commercially viable future. Two smaller hotels is a much better option. Hotels standing empty as a result of this change will be repurposed. The owners will have to decide whether demolishing and rebuilding or converting their hotels is the more profitable choice. Strong partners will be more important than ever before. Solvent tenants and empowered landlords will be able to position and maintain successful concepts in the market.

Another essential aspect of any successful concept is the reduction of personnel costs to the minimum. Digitalisation can be very useful in this respect. There have been staff shortages in the hotel and restaurant sectors for years and now the operators also lack the money to pay for staff. A rethink is unavoidable.