Hotels across the globe are facing the highest levels of uncertainty seen since WW2.
NB: This is an article from Proven Partners
As markets reopen, there are no clear paths or timelines to when business travel or vacation travel will return to 2019 levels, with many saying it could be 2023 or after. In some cases, whole segments of the travel industry seem less and less likely to ever revert to where they were, with huge knock-on repercussions for hotels.
Against such a stark backdrop, hoteliers the world over are having to step back and reassess every element of their offering. Such dramatic shifts in operational systems and processes are not common or easy in any industry, but are especially challenging in an industry which has consistently ranked as one of the least innovative.
Some other industries have to embrace innovation and change management as part of daily life. Startup culture in particular is rooted in the need to be lean and agile, pivoting and evolving constantly until traction is achieved. As the tech industry has matured over the last few decades, change management processes have become more refined and integrated into companies of all sizes. With hospitality facing an existential crisis due to such an industry-changing external shock, hoteliers could do worse than look to startups for lessons in adaptation.
Let’s assess a number of the most relevant strategies here.
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BUILD TOWARDS A SPECIFIC INDIVIDUAL
Many hotels focus on a broad target market segment, so their brand has been built to cover the basics yet it doesn’t resonate strongly with any particular group. That worked fine when business was good and you could rely on your location or your pricing to win market share, but in today’s world your hotel needs to stand out.
Startups know that it’s critical to build your brand and products to resonate strongly with specific individuals. In short, bland is bad. Trying to please multiple groups or market segments will result in diluted messaging that won’t ultimately satisfy anyone.
Build your product for someone you know and with their exact needs in mind. Choose your target customer – perhaps a combination of a few of your more loyal existing customers? Give them a name, job, family, hobbies. Bring them to life. These personalities can then inform your decision-making process, from pricing and promotion through to route-to-market. Ask yourself, what strategy would really work with them?
UNDERSTAND YOUR CUSTOMER’S ISSUES
It’s often said that finding the solution is the easy part, finding the problem is the hardest. Take the time to really understand what problem you’re solving for your customer. In today’s world for hotels, the problem your target market is struggling with could be:
- They’re working from home and need a place to get some peace and quiet. This could be an opportunity to offer rooms for daily hire, a concept that’s worked well for certain segments of hotels.
- They’ve had to cancel their international vacation plans and need a staycation in their locality to get a break from daily life without having to fly.
- They don’t feel comfortable dining in a restaurant and would be willing to pay a premium for the space and privacy that comes with a private dining experience that could be delivered in your hotel room, like at this Swedish hotel.
The above solutions may be helpful in the short term, but remember that your customers’ needs will continue to change and evolve over the medium to long term. If you want sustainable success, your offering will need to continue to adapt alongside these changes. Accept that and prepare for it, giving your team the support they need to create new initiatives and keep you on the front foot.
EMBRACE THE LATEST TECHNOLOGY
Tech is built on other tech. As technology has advanced, it’s become cheaper and easier for startups to build their own products and bring them to market, something that in many cases would have been much more expensive 20 years ago. This same embrace of technology hasn’t happened yet in hospitality, with Harvard Business Review ranking hospitality in 20th position out of only 22 industries in terms of digital advancement. This encapsulates the opportunities that are yet to be embraced by your competitors. If you’re open to digitalizing elements of your operation, there’s never been a better time to start.
There are few hotels who couldn’t improve some elements of efficiency by integrating automation and new software solutions. While it might be among the more extreme solutions, the Beverly Hilton Hotel’s newest line of defense against COVID is a three-foot-tall robot named Kennedy. The robot kills the virus by flashing intense, germ-killing ultraviolet light through the room before guest arrival.
Many new solutions carry little to no upfront cost and can cover their ongoing cost almost immediately, yet in normal times, who has the time to assess and integrate?
ASK YOUR TEAM FOR HELP
Project Aristotle, a study released by Google in 2017, showed that the company’s most important new ideas came from B-teams comprising employees exhibiting a wide range of skills including: equality, generosity, curiosity toward others’ ideas, empathy and emotional intelligence. These teams may not have had the top scientists, but when team members feel confident speaking up and know they are being heard, great ideas are born.
It’s likely that hoteliers have had to deal with staff cutbacks, and your team are working longer hours than ever under stressful conditions. So it can seem sensible not to distract them from core focuses. Despite that, times of extreme change are an opportunity to strengthen team bonding. Inviting feedback from those who sometimes are not involved can build a tighter sense of community and breed support and unity. You don’t know where the next great idea could come from, so what do you have to lose?
EMBRACE ONGOING REFINEMENT
The chances are you’ll need to make multiple ongoing changes to your product offering before it will click with your market. Ongoing experimentation and an openness to create are cornerstones of tech companies as they scale, and could be critical to hotels survival and future growth. Your team needs to hear this in clear terms.
When pressure is on and the chips are down, it can be tempting to “play it safe” and revert to the traditional playbook, which is exactly what you don’t need. Your organisation needs a clarion call to creativity, which means you need to be supportive even when things don’t work out. The important thing is that you’re testing and learning, improving your processes and products as you move forward.
Product change doesn’t mean you constantly need to redesign your suites, but it may mean restructuring your pricing and inclusions, changing your guest communications or adapting your food and beverage spaces to meet the needs of this new world we’re in.
DEVELOP FEEDBACK MECHANISMS
Your market feedback is so critical, yet often goes unnoticed or ignored. You have access to feedback, but it needs to be valued and planned for in advance. Look more closely at some tech companies to find examples of what you could be doing:
- Your social media is an ideal medium to hear what your customer is saying. Social listening can be a far more valuable use of these mediums than simply focusing on the number of likes from a general audience.
- Your sales team members are naturally very client focused, yet they’re the ones who receive market feedback on an ongoing basis. They need to be invited into the conversation and listened to, so you can get real time feedback from the field about what’s working and what’s could be changed.
- Your operations team is seeing any problems with the product and hearing the complaints and compliments from your guests / prospects in real-time. These have to feed back as they’re critical to your commercial success.
- Finally, your guests themselves need to be given every opportunity to tell you about their experience. Software such as GuestRevu offers great opportunities to survey your guests and identify what aspects of their stay really stood out, and what elements may have let them down. This feedback can help you address any issues while also protecting your online reputation.
When market conditions change abruptly, you lose traction. To get momentum back against such a steep external shock, you may have to reassess everything you thought you knew. Instead of fighting to get back to where you were, maybe it’s time to evolve again and find a new fit.