Some US hotels have found a creative way to boost their cashflow by turning to their customers for finance instead of the banks.
The hotels are selling ‘bonds’ for future purchases and offering ‘buy now, stay later’ credits to boost cashflow during lockdown.
LondonHouse hotel in Chicago is selling bonds for guests to buy for $100 each. After 60 days, the bonds are worth $150, which can be used to pay for overnight stays, room service and drinks at the hotel’s bar once the lockdown lifts.
Unlike purchasing a future room stay for a set rate, the bonds are like cash. If the price of the hotel room drops, your bond is still worth $150—which makes it an attractive investment.
“You have to think outside the box in this landscape,” said Juan Leyva, vice president of operations at Oxford Hotels & Resorts—who manage the Chicago LondonHouse property.
“We’re doing it to improve our cashflow so we can keep people working,” Mr Leyva said. “And we want to be front of mind for guests when they start looking to book their travel.”
The hotels are selling their bonds online, on a series of websites popping up, which allow venues to list their bonds or other ‘buy now, stay later’ credits.
“It’s really starting to take off, we launched the site two weeks ago and are up to 80 or 90 properties,” said Wade Breitzke, one of the creators of We Travel Forward—a website that lists hotel’s offers.
Mr Breitzke, who works for a hotel marketing company, created the website as a not-for-profit initiative to help the industry.
“The industry is struggling, so we want every penny to stay with the hotels,” Mr Breitzke said.