Corona and Hotels

The Dorint Hotel 'chain' came up in the news over the past few days.  Around Germany and Europe, this group runs around 60-plus hotels, and known as a quality hotel operation....meaning that they are highly regarded.  Since the late 1950s....they've been around, but it's in the past fourteen years that they really surged ahead.

So Welt had this article over the hotel chain.  What the management group says is that Corona has harmed the chain in significant ways, and it might take 15 to 20 years for a full recovery to occur.

Here's the thing about hotels in general....not just the Dorint....they all rely upon travelers from not just Germany, or Europe, but from across the globe.  If you stage a situation where people are fearful, then they don't travel.  A four or five star hotel, with 25-percent occupancy going on for a year or more?  It typically doesn't survive.  It'd go to a sales routine.  But the problem here....who would be crazy enough to pay top price or even a reasonable price for an operation that won't be profitable for a minimum of five years?

I would speculate here that various real estate people with deep pockets and high highs would walk in....offer 50-percent of the real value, and the hotel might be desperate enough to accept.  The speculation folks would simply shut the hotel down for a year, and market it for another chain, in hopes that the price would go up 10 to 20 percent. 

But long-term....what if you reach the third or fourth year of this speculation game, and it doesn't work? 

It wouldn't surprise me in a year if you went into a city like Frankfurt, and found a quarter of the supreme hotels (the nicer places) up for sale but unable to find buyers with the pockets. 

There are hundreds of economic problems associated with Covid-19, and this is just one out of the group.