I don’t know about you, but I am a little bit jaded hearing the ‘C’ word and the ‘F’ word and for those who may have been living under a stone, they are of course ‘COVID-19’ and ‘Furlough’.
NB: This is an article from Right Revenue
Both very depressing words in our industry right now and a worrying time for everyone.
There has been much written about what our future might look like and do any of us really know the answer? My best guess is no, but I think what we do know for sure is that the world will change and our guest’s behaviour will also change. So what might that look like and what should we be (at the very least) starting to consider…
Hotels will very probably not open to full capacity right away or for some time. We are already seeing this as ‘probable’ rather than ‘possible’ in Ireland and it is a real possibility for the industry as a whole. Let’s look at the facts… our guests will be nervous about travelling in general; they will be nervous about staying among lots of people they don’t know, and the fact is that we just don’t know how this virus will play out, so restricted access to any large gathering of people may be a real possibility for quite a while.
So what does that mean? Staggered room availability for sure and we have to understand that this also means – new budgets; forecasts; ability to price; lead times; flexible rate policies; marketing; sales, distribution, packaging; contracting; OTA’s, Book Direct strategy, CRM, Guest Communication – I could go on…
And to continue on the theme of what the new normal might be operationally, then we need to consider our bars and restaurants. Even if the Government doesn’t force hotels to re-look at capacity, then I can guarantee that our guests will. You need to consider less seats in your outlets; more spacing between tables and of course the impact this might have on revenue. Our Room Service menu might also need a shake-up as we may find eating in our rooms another new normal.
For those hotels with spa facilities or wet areas, you may well need to consider a very ‘long-tail’ come back for your very valued guests. We need to consider that guests will be wary of being touched at all by your wonderful therapists and it might well be a while before anyone is venturing into a pool or a hot tub!
Another absolute consideration should be a spend allocation for a re-furb. I know hotels that are budgeting for painting and carpet changes but at the very least, you will need to budget for a change in fabrics and bed-linen. Ramp this up by x100 if you are a hotel that is open for NHS staff or patients. Now we all know that on paper this may not be required but you can bet anything that our guests will insist on ‘clean’ like never before.
And how on earth are we going to staff our ‘new normal?’ Lots of our migrant workers have returned home. Many of our existing teams may have taken the Government’s new relaxation on furloughed workers and gone and got a second job which they may not return from. Heck, we know that not all of us are here because we are passionate about hospitality. Some of our teams might find easier jobs with better working hours and better pay – definitely something else to consider.
With regards to rates, I think we all need to stop and understand that 2020 is now written off. We may open (staggered) by the summer but there will be zero corporate and zero tour business this year and if we are all fighting for ‘staycation’ then there will be few winners.
2021 will not behave as you thought. It won’t even behave like 2020. In fact my guess is that you will be lucky (very lucky) to come out of this even close to 2019. The fact is that it could be 2022 or 2023 before you are back to even 2019 figures.
So you need to:
1) write a normal budget for 2021 so that you can measure the impact that COVID-19 will have when you get your figures ‘actualised’ (that is if you are brave enough to want to understand your losses)
2) write a new budget for 2021 taking COVID-19 into consideration
3) write a new budget for the remainder of 2020
4) allow your Revenue Managers to analyse all of this
Now for goodness sake, go back to your data. The days of aggressively setting rates have gone. Normal lead times have gone. Normal booking patterns have gone. Normal pricing has gone. Normal buying behaviour has gone.
If all of these things are a huge unknown, then it beggers the question, ‘why are so many of our Revenue Managers on furlough?’ Honestly, if you have a Revenue Manager on furlough at the moment then I beg you, yes actually beg you, to reconsider. This is a time when you need them most!
And honestly, if you don’t already have technology to do the ‘heavy-lifiting’ for you, then please seriously consider investing. Now is the time you need technology most.
You need to be on top of your data. You need to be preparing for new trends; new segmentation; a definite shift in buying behaviour. You need the strategists to understand what the new strategy might be. Let them get under the hood now. The panic needs to end and it needs to end today. Hotels must start planning for a way out of this and let your Revenue Manager and your Revenue Management System work for you.
