Nacho Gozalbo, commercial director of Spanish hotel company Palladium Hotel Group, reveals the impact of the coronavirus pandemic on the business
Palladium Hotel Group has 48 hotels and more than 14,000 rooms in six countries; Spain, Mexico, Dominican Republic, Jamaica, Italy and Brazil. It operates 10 brands: TRS Hotels, Grand Palladium Hotels & Resorts, Palladium Hotels, Palladium Boutique Hotels, Fiesta Hotels & Resorts, Ushuaïa Unexpected Hotels, BLESS Collection Hotels, Ayre Hoteles, Only YOU Hotels, as well as licensed brand Hard Rock Hotels in Ibiza and Tenerife.
The company’s commercial director Nacho Gozalbo assesses the impact of the pandemic, and his views of the UK market which accounts for around 50% of the group’s sales for Europe and 8% for the Caribbean.
How has this pandemic impacted Palladium Hotel Group?
For 2020, so far, we have lost about 85% of our business in Europe and about 65% in the Caribbean. It has been a horrific year for the hotel industry and of course we have had to evolve and respond as best as possible. This has meant responding quickly to a whole raft of government guidelines, often with little or no prior notice. We have had to concentrate our efforts on fewer hotels and bring forward the end of season dates in areas where there just is not a sustained level of visitors.
How have you pivoted your sales actions given the evolution of the pandemic?
We have had to pivot our actions constantly based on government regulations in our main source markets such as the UK and Germany. In recent weeks, we have focused heavily on the domestic Spanish market and thankfully we were able to recoup some business given the fact that the Spanish customer tends to book later than those from other countries. Luckily for us, the recent time frame corresponded with the Spanish holiday period. That said, as these holidays have now ended; we are having to close some of our properties earlier than expected and turn our efforts away from Europe and towards our properties in the Caribbean.
Although we have always had very flexible cancellation policies, this was something that we have further focused on in recent months; both ensuring that policies are highlighted to customers at the time of booking and strengthening these policies to give customers and agents the confidence that they need to make a booking in a period of such great uncertainty.
How has Palladium responded to the crisis?
In the last few months, we have invested a huge amount of resource to enable our properties in the Spanish islands, the peninsula and farther afield to open in a safe and secure manner and to ensure that all required measures in terms of social distancing are adhered to. In July, we started to offer free medical assistance insurance to every guest staying at our hotels across Spain to cover them for any eventuality related to the current pandemic for the duration of their stay. This is now being rolled out for stays in the Caribbean too.
We created new health and safety protocols implemented in partnership with SGS – the global leader in inspection, verification, analysis and certification – and we also have been recognised by a number of reputable organisations and bodies around the world for our unwavering commitment and compliance to leading global standards, health and safety. All of this work behind the scenes demonstrates that as a hotel company, we make no compromises when it comes to customer and staff wellbeing and safety.
What are your thoughts on the UK’s travel bans and quarantine restrictions?
I would endorse a two-test travel policy on departure and arrival. The blanket travel ban is devastating for the hotel and travel industry and other countries have proved that a testing policy can work. I would also endorse a more nuanced policy when it comes to travel restrictions. We understand that certain areas may need to go back into lockdown but the coronavirus infection rate in Spain varies considerably from region to region. Safe travel corridors should be established in areas with lower infection rates.
What are forward bookings looking like?
Bookings for the winter season and for 2021 are looking strong. That said, we are currently in the process of establishing exactly what percentage of these bookings are rebookings due to Covid-related cancellations this summer. This analysis will give us a better indication on how business is faring. There’s no denying that it has been a tough year for us and for the entire hotel sector.
What have you learnt from this crisis and what are your predictions for the future of the hotel industry?
We have all had to adapt rapidly to the new scenario. This situation illustrates how quickly things can change; one minute you are closing new deals with partners, your hotels are winning awards and the company is experiencing huge year on year growth. The next, you are forced to reorganise your entire business and shut hotels that usually operate at almost full capacity. It has been a huge learning curve for all of us. Moving forward, sadly we will see more travel casualties along the way and we also expect to see more hotels on the market due to the need for financial liquidity and a concentration of assets by investment funds.
Personally, I am grateful for the smaller things. I have had the chance to spend more time in my home island of Ibiza; without the tourists and like others, revaluate my priorities.
We continue to be optimistic and we look forward to visiting our friends and partners in the UK as soon as we are able to do so; as well as welcoming them back to our properties.