Terrible Times for Hotels – What Might our ‘New Normal’ Look Like?
These are terrible times for hotels, maybe even the worst of times… After terrible tragedies such as 9/11, the London bombings or even the 2008 recession, we all had reference points to work from.
NB: This is an article from Right Revenue
We all knew roughly what might happen and for how long. But COVID-19 is unprecedented and few of us could have been prepared for it (despite what Bill Gates might have said back in 2015). However, there is an end in sight and we absolutely will get through this, but we do need to be prepared for what will inevitably be ‘a new normal’. So what might that look like:
#1: Business Travel – We all know that the first market to be affected and the last market to come back is Corporate. Whether that is pure business travel or C&I or M&E, corporates are normally slow to recover. We need to be prepared for this. Companies will be wary of staff travelling Internationally and a whole new culture of ‘stay at home’ working has been born. So if your market was heavily out-of-state corporate / events / C&I then you need to have some fresh thinking. What other markets support you? Review your segments and be prepared to pivot. But what does pivot mean exactly? I can’t profess to have a crystal ball but perhaps companies who are now used to ‘at home’ teams might want to hire monthly meeting rooms where they get their teams together once per month for an ‘all hands’. Maybe you need to re-think your AV and make sure your WiFi is the best it can be. Perhaps we need to think about a new way of servicing those clients who choose to work more remotely. But what you can be doing (if not right now, then very soon) is to ensure your Sales Team is contacting every meeting & event organiser and see if you can secure cancelled business for future dates. Have your team super-charged and ready – who has cancelled? when for? at what price point? from which segment? What can you do to get these customers back?
#2: Communication – On that note, communication is key. Make sure that you have open and honest communication with all your customers but especially your key clients. Keep them in the loop and informed. This is a time to treat your customers well. Whether that be with refunds, flexibility or just a helping hand, do what you can now and you will reap the rewards in the future.
#3: Group Business – I would go as far to say that we should all just forget about group business in whatever guise that takes for the rest of 2020. Tour business won’t come back this year and even the CEO of Marriott is expecting at least 50% wash for any new group business in 2021, so Revenue Managers need to take that into consideration.
#4: Staycations – The domestic market is likely to come back first. Let’s face it, who isn’t working out how to strangle a loved one as we speak! (or maybe that is just me!!!) but we all predict that local leisure will return first. People will not be able to travel abroad or at the very least, will be wary of travelling, so the local market will spring back first. So you need to be ready with great packages and a strong Book Direct campaign. My personal advice is not to drop your package prices yet. We all realise that there will be a large portion of the market who will come out on the other side of this with severe financial problems but for many, the need to experience something reaching normality or special will be too hard to resist. So expect local business. Work on your PPC campaign strategy now so you are ready to turn that on when necessary. Hotels should make their packages enticing. Please, please stop with the 2 night B&B titles on your website and descriptions such as ‘this rate includes 2 nights stay and dinner on one evening’. Please wake up! Your customers always deserve emotive descriptions and now more than ever.
#5: Influencers – I am not a huge fan of people who call themselves influencers but some clever people in our industry are saying that now might be the time to consider using influencers to entice back your local market (as soon as isolation is over of course). Be wary and be careful but if you have someone that you know well and who has a proven track record, then this might be the time to experiment.
#6: Flexibility – Travellers will be wary (and rightly so) of booking anything that can’t be cancelled or changed. So, reduce all of your pre-paid options right down for now and make staying with you as easy and trouble-free as possible.
#7: Buying behaviour – This will change and we need to be prepared. Customers will be wary of too many touch-points with staff, so now might be the time to look at your check-in experience. Maybe now is the time to go mobile. There are lots of companies out there that provide mobile apps which allow for mobile check-in and just a huge shout-out to Julie at Criton as her team do a wonderful job in a total mobile guest journey https://www.criton.com. But over and above that, now might be the time to review your room service menu or even the distance in seating in your restaurants. You might find that for a while, guests may not want to sit with 100 people at breakfast, so how are you going to solve that problem? Customers will want to come back to hotels but they will want to come back safely, so be aware and start planning now.
#8: AirBnb – this was a threat to us all before but will what might be seen as a ‘safe option’ for travel be more of a threat to us when this passes? What can you do now to mitigate that threat? How can you communicate and prove to your customers that you are a safe and welcoming place to stay?
#9: New thinking – I am advising the hotels that we work with to think about their hotels as a new opening. What would you do with your hotel if you were opening for the very first time? What segments would you want to attract? What pricing would you put in place? What kind of guest service would you want to offer? Now is the time to step back and re-think everything. Everything, after all, is brand new…
#10: Data – finally, and perhaps most importantly, now is the time to learn from your data. If some or all of the segments above affect your business, then what are you going to do if these customers don’t come back as you expect? Use your Revenue Manager; use your Revenue Management system; lean on the data. Look at what segments (and they may be completely new ones) might work for you. Understand how much it might cost you to gain share within those segments and how much business you might expect. Now is the time to be a strategist.
If this crisis has taught us in hotels anything, it is to think the unthinkable. Only a few short weeks a drop in RevPar might have been our biggest concern. This has turned our world around in so many ways. What I hope we learn from this is to be kind. Be kind to your people and by that I mean, your team, your customers, your suppliers, your friends and your family.
This crisis will see many fall and those that stand must be ready to change. It is always through crisis that we see great leadership, vision and innovation. We are absolutely all in this together.