How New Castle is responding to the pandemic

HALIFAX, N.S., RIDGEFIELD, Conn. — New Castle Hotels & Resorts (NCH) is among countless small businesses across this nation and the world that have experienced a rapid and steep decline in business as a result of the coronavirus health epidemic. The hospitality industry is among the most heavily impacted sectors in the global economy, with revenues declining over 70 per cent in most major markets, constituting the largest decline on record.

In response to this unprecedented crisis, beginning two weeks ago, NCH took decisive action to reduce staffing levels on property and at their corporate offices, including a 20 per cent wage cut across all management and senior leadership positions. Guido Kerpel, NCH’s chief operating officer, noted that the “cost containment initiatives we have executed across our organization have been extremely painful,” however, “the camaraderie and commitment demonstrated by our furloughed associates and remaining colleagues has been incredibly motivating. We are all in the same boat and we will survive this crisis because of how we look after one another and work as a team.”

NCH’s portfolio constitutes 18 properties (seven hotels in Canada and 11 in the United States), including the dual-brand Courtyard / Residence Inn, currently under construction in Jekyll Island, Georgia, and scheduled to open in Spring 2021. With the exception of the Westin Jekyll Island, which closed last week for the month of April, the balance of NCH’s portfolio remains open for business.

Sales teams get creative to source business

“Our sales teams have gotten very creative and tenacious to source business in this challenging environment,” stated Don Urbahn, VP revenue management at NCH. “We have adjusted our pricing models to meet the needs of the current traveller, which includes many first responders, healthcare providers, government employees, national guard and, military members, other essential employees that require 14-day quarantines.” In addition, NCH’s sales effort is focused on re-booking group blocks for the end of 2020 into the first half of 2021, as well as capturing a new wave of bookings emerging from alternate demand segments, including manufacturing, education and ‘drive-to’ destination travel.

“The biggest wins are in the form of the support and appreciation we are able to show the communities in which we operate”, emphasized Julian Buffam, partner at NCH. “Our company is giving back wherever possible, including offering preferred rates to first responders and healthcare providers portfolio-wide, housing individuals experiencing homelessness in Saratoga Springs, New York; providing shelter for cancer patients in Moncton, New Brunswick and potentially even repurposing ballroom space for the production of face masks that are in short supply in Halifax, Nova Scotia.”

Each NCH property has launched initiatives to support their local communities by providing those in need with care packages and curbside food pickup services, and messages of support. Last week, NCH set guestrooms alight at their flagship Canadian property, the Westin Nova Scotian, and the Fairfield Inn & Suites New Orleans Downtown to display a heart and the word ‘love’, which shone brightly across the cities to support first responders and healthcare providers who are risking their lives to fight this epidemic on the front lines. Additionally, the Westin recently became the temporary home for crews of the Royal Canadian Navy, who began a 14-day sequester as they prepare for potential deployment to assist with domestic COVID-19 response.

Over the past several years, NCH has made significant investments to upgrade its technologies and build out additional shared service departments, including in Revenue Management and Reservations. Julian Buffam emphasized that those decisions “have paid dividends during this crisis.” NCH’s new human resources platform has freed up the time for our general managers, who are relied-upon now, more than ever, to ensure guest safety and carry the weight of several departments.”

Moreover, Buffam stated that by allowing NCH to have “full control over our platform of services, our properties have not been left without the necessary level of support due to brand furloughs.” Marriott International, along with most of the industry’s major franchisors, have furloughed up to two-thirds of their corporate and above-property staff in the United States and even more in Canada.

Algonquin Autograph Collection increases conversion ratio

The results from NCH’s initiatives speak for themselves. Through the direct hiring and training of reservationists at the Algonquin Autograph Collection Resort in St. Andrews by the Sea, New Brunswick, NCH increased the conversion ratio from 30 per cent to nearly 70 per cent, while adding $C20 in ADR by upselling suite product and packages. “This infrastructure will be critical to support a more immediate ‘V-shaped’ recovery as individuals and corporations start traveling again,”emphasized Kerpel. “When they do, our partners will have the benefit of our in-house reservation service, which yields a higher conversion ratio and rate at a lower cost than the brands can offer.”

With every crisis and challenge comes opportunity, and while the hotel and restaurant business model has been devastated by the strict measures taken to combat the novel coronavirus, innovation abounds. At NCH, full-service properties are offering curbside pickup from their restaurants, with a recent ‘Easter on the Go’ initiative that generated over 100 bookings in Halifax. NCH’s in-house Digital Marketing & eCommerce team is identifying opportunities for targeted digital advertisement spending in the wake of COVID-19, which achieves far greater outreach and engagement at a lower cost.

“In a nutshell, there’s less digital noise now compared to pre-coronavirus, making it easier and more affordable to be in this space,” stated Denise McNeil, regional director of revenue at NCH. “We’re definitely seeing lower cost per impression, in addition to far greater reach then we would typically see otherwise.”

Employees are our “secret sauce”

Other key initiatives undertaken by NCH in response to this crisis include ensuring furloughed associates continue to feel connected to and supported by the greater NCH community and their respective property teams. To achieve this, NCH is in the process of rolling out the communication tool Speakap company–wide.

“We will be utilizing this social platform to encourage engagement throughout our organization and keep our furloughed associates fully informed of the latest developments concerning COVID-19 and our hotel operations,” stated Kerpel. “A key component to ensuring our properties rebound quickly and successfully is to take care of our associates through this difficult period. They are and will always be the ‘secret sauce’ of our success.”

“As we focus on the health and safety of our guests, associates and families, we also look towards a brighter future, one that is not dictated by fear of contagion but rather the joy that travel, hospitality and human interaction brings,” stated Julian Buffam. “When that day inevitably comes, we will be ready to welcome back our loyal associates and guests with tremendous gratitude and a newfound appreciation for the incredible resiliency of our industry and its people.”

About New Castle Hotels & Resorts (NCH)

NCH is a fully integrated, industry-recognized hospitality investment, development and management company that has built its reputation executing complex operational turnarounds, historic redevelopments and new-build construction. NCH consistently ranks among the top 100 US hotel management and development companies and is frequently recognized as a top employer in Canada. The company has earned preferred status and partners with the industry’s leading brands.