Resilient Leadership Helps Chicago Hotels Weather the Pandemic

By: Deborah Popely, DBA, Associate Professor and Chair of Hospitality Management, Kendall College at NLU Michael Krause, C.H.A., CHIA, MEd., Assistant Professor, Kendall College at NLU

The impact of the COVID-19 pandemic on the hotel industry has been well documented in industry reports and popular media. With declining travel and local lockdown orders, STR year-end data indicates the U.S. hotel industry logged unprecedented lows in occupancy, ADR, and RevPAR in 2020. The industry surpassed 1 billion unsold room nights, eclipsing the 786 million unsold room nights during the 2009 recession. According to Ted Mandigo, hotel industry consultant and Kendall Professor Emeritus, room revenue losses neared $3 trillion with nearly 100,000 rooms lost due to suspension of operations and closures.

Amid the turmoil and uncertainty, some hotels have fared better than others based on a variety of factors such as size, service level, local market dynamics, and clientele.  One factor that hasn’t been fully explored in the hotel industry is the “R-Factor”: that is, the resilience of the leader and the resilient environment he or she creates within the operation. We wondered how important the “R-Factor” could be in hotel survival and recovery and what it might mean for the future of the industry. Partnering with the Illinois Hotel & Lodging Association, we engaged with a panel of 16 Chicago hotels between October 2020 and January 2021 during the city’s second lockdown in response to a resurgence of COVID-19 cases. Through in-depth surveys and interviews, we discovered that the majority of the hotels exhibited characteristics of resilient leadership in their management practices and processes before the crisis, and that their overall resilience increased as a result of the pandemic.

Some of the topline findings are summarized below:

Crisis Management:  Before the pandemic, the hotels were mindful of how a crisis could affect them. Most of the hotels had fairly robust crisis management plans and associated training, but a health event such as the pandemic was not very high on their radar. As a result of the pandemic, crisis planning became more proactive with longer planning horizons. Preparedness for biohazards is now at a much higher level and has become embedded in the training program for the future. Participants noted that managers became nimbler and were more flexible, making tougher decisions more quickly.

Leadership: The pandemic was a true test of leadership and these hotels were candid about the challenges they and their team members faced. The need to lead by example was already high on participants’ agenda before COVID-19, but received more emphasis after the pandemic. Leaders’ ability to project optimism and hope was tested by the pandemic and most reported that despite their best efforts, morale suffered as a result of continuing layoffs, furloughs and operational reductions.

Communication:  The pandemic forced managers to evaluate and re-evaluate the ways they and their parent companies communicated with employee teams and their guests. The frequency and scope of communications increased, aided by technology and social media. Hotels instituted hotlines, started Facebook pages and used videoconferencing to open a dialogue and provide ongoing support for retained and furloughed employees.

Teamwork and Collaboration:  Existing levels of teamwork and camaraderie increased as the crisis generated a “lifeboat” mentality within hotels. Organizations became flatter, silos were eliminated, teamwork and collaboration were encouraged, and front-line staff were empowered with the direction, knowledge, and tools needed to solve unexpected problems. Due to the consolidation and paring of staff positions, cross-utilization became a central strategy for maintaining services and keeping people employed.

Creativity and Innovation:  New levels of creativity and innovation were unleashed, with hotel staff finding new ways to protect the health and safety of employees and guests, offer amenities and meet the needs of the surrounding community. While most participants rated their organizations highly in innovative thinking prior to the pandemic, rewarding “thinking outside the box” became more prevalent for sustaining operations during the pandemic.

Partnerships and Community:  The hotels involved in this study had a relationship with their local industry advocacy group, but grew closer to the association and to one another as a result of the pandemic. Hoteliers focused less on competing and more on collaborating to save the industry.

Capital Structure and Resources:  Most of the hotels felt they had sufficient resources to absorb some unexpected change, but the scope and longevity of the crisis pushed them into uncertain territory. A sentiment was expressed throughout the interviews that the pandemic would cause hotels to be more discerning about resources in the future. 

On the whole, the resilient leadership served the hotels involved in this study well, making them more aware and better prepared for the next crisis, as well as more agile, collaborative and innovative than before.  Leadership skills were enhanced and communication became more open and inclusive to the benefit of managers and frontline staff alike.  As a result of the disruption, the hotels are more engaged with their industry and with one another in ways that will help bring the industry back after the prolonged crisis. The leaner operating style of doing more with less appears to be the prevailing management approach that is likely to extend beyond the current crisis. 

As hospitality management educators, the faculty at Kendall College is committed to providing reassurance of the value of pursuing careers in hospitality and ensuring a pipeline of well-prepared, adaptable and creative individuals are available when employment rebounds for the industry.

The full research report is available at https://digitalcommons.nl.edu/kc/1/.  Note on limitations of the study:  Conclusions are based on a small, self-selected sample of primarily upscale hotels that may not reflect the experience of other hotels across the Chicago region or in other markets. Susan Tinnish, PhD, an independent leadership coach and consultant, contributed to the research and co-authored the report.