The rules of the game have changed. Thanks to the COVID-19 crisis, we’ve entered a new world order, and those who are best prepared will have the biggest advantage.
Although we’re still trying to navigate the global storm that hit us at the start of this year, now is the best time to put together a new strategy and plan so that your brand can bounce back fast.
When I say fast, I don’t necessarily mean in the next few weeks. This is something that will take you at least the next twelve months (or more) to implement fully, and we know recovery of the hotel industry will also require ample time as travelers slowly regain their trust.
I asked expert hoteliers from around the world their perspective on what you can do and what you should be focused on to help your company survive and ultimately thrive again. The insights shared were invaluable.
After gathering all the different data, these are the top responses that resonated most with me. If there’s one thing I’ve learned from all the hoteliers gracious enough to share their advice, it’s that COVID-19 might be an unparalleled crisis for the hotel industry, but these individuals are resilient and persistent enough to forge a path forward and demonstrate authentic leadership amid uncertainty.
If I had to settle on one piece of advice, it would be “Stay close to your people in the time of crisis.” The COVID-19 crisis has shown for each of us the value of relationships. We miss to meet our friends, to visit our families or to socialize with our colleagues.
Human connection has gotten a whole new value because it is taken away from many of us. Already before the crisis, one of the major challenges in the hospitality industry was to maintain a strong and motivated workforce. Countries like the United Kingdom are, for example, heavily dependent on the outside workforce, especially the hotel industry.
This crisis allows each of our businesses to foster relationships and even stabilize our workforce for the future. People will remember how you have treated them in tough times.
Do you help them survive financially? Do you speak to your team? Do you care?
To maintain a strong team throughout the crisis will enable us to kick-start our businesses much quicker after the crisis. Just remember how it is to open or re-open a business. The success of the first weeks is heavily dependent on the strength of your team.
On the other hand, we need to stay close to our guests too. This applies even more to small and medium-sized hotels or restaurants, which mostly rely on regular or local guests. I said that relationships count these days, and many communities have already shown strong support for their neighborhood hospitality business.
My suggestion is not to wait until the crisis is over. Stay in contact now. Offer an online voucher sale, offer affordable home delivery or a daily lunch take-away. Use media to stay in touch, i.e., home cooking videos on YouTube of some of your beloved recipes could remind your guests how great your food tastes. With minimum cost, we can maintain this relationship with our guests, and again they will remember after the crisis.
To stay close and keep this human connection to our teams and guests in the times when it is highly difficult will benefit our industry most.
The degree at which Hotels will make a comeback hinges on consumer confidence and disposable income after the pandemic is contained.
Usually, corporate travel starts trickling in, followed by leisure and group segments. Savvy hotel leaders would have had their sales teams connect with their key accounts even during the virus outbreak for continuity’s purpose. Marketing campaigns will have to revolve around creating a feel-good factor and boosting confidence in travel.
According to all speculations, Business post-COVID-19 will be different, and for sure, hygiene and safety will take big focus. However, one thing hotels need to do is to go back to basics and the core of our industry to focus on guest experience and services. Take the opportunity with our associates being hungry to get back to work, and motivate them to do their level best for the guest.
It will be necessary to flex all rate’s rules and regulations, for example, no advance deposit, no penalties for changes or cancellations, and throw in some added value to the guest.
Things like complimentary upgrade upon check-in (based on availability) include an activity that’s usually sold as a gift (e.g., on-site tours). Offer complimentary turndown services with a small amenity. You can also promote F&B outlets by giving the first complimentary drink and a discount on orders from the restaurant’s menu.
Personally speaking, the performance of the hotels will be based on three fundamental aspects.
Firstly, the hotel’s image should be positioned as a safe and appealing place for travelers, inspiring confidence, and ensuring that all hygiene protocols are effectively met.
Secondly, cancellation policies should be reviewed and made more flexible in order to stimulate demand and inspire confidence when booking our hotel with a special focus on national demand until the borders are open.
And thirdly, the hotels that during the pandemic have offered their help and carried out solidarity actions will show themselves as socially responsible companies that will give them a good reputation and will be more appealing to future customers.
As the number of new cases steadily decreases, all governments need to take measures to protect civilians. Most of the countries’ Aviation Authorities have announced the extension of the ban on incoming international flights worldwide.
In my case, the hotel didn’t close completely (like our competitors) because we continued to have 600 workers on site undertaking construction work. Our hotel was amongst the first to implement various safety precautions that generated positive local media coverage.
The main points to cover within your strategy during such a crisis is your cost containment, recovery plan, and cash flow.
In my case, I would add the construction project as well. I would think about my Key cost reduction in Q1 and how this affected my EBITDA? And I would consider things like:
• Reduction of the number of permanent colleagues.
• Reduction of the number of temporary colleagues.
• Freeze hiring permanent positions.
• Cancellation of all extra manning.
• Cancellation of all colleagues’ activities.
• Salary deduction.
• Voluntary unpaid leave.
Once colleagues are back on duty, special tasks and projects should be assigned, including supporting the Engineering team for repair and maintenance works. If you carry this out, make sure to list what they’ve done and place value that so you can cancel it from Capex.
Another thing I prioritize at my hotel is that it must be seen as the market leader, ensuring a safe environment with excellent health and safety procedures.
What measures should be in place at your hotel to manage health and safety risks? Here are some basic examples to consider.
• Prominent visibility of back and front of house hand sanitizer.
• Temperature checks at every hotel entry point.
• Training and communication for all colleagues.
• Personal protective equipment enhancement for colleagues.
• Installation of decontamination shoe mats.
• All minibar items are sanitized prior to the guest’s arrival – marked with a sticker.
• Swab tests carried out in the room before the guest’s arrival – results provided to guests if requested.
• Face masks and alcohol pads part of in-room toiletries.
• A limited number of guests in the gym at any one time.
• Use of thermal imaging cameras.
The recovery plan.
How many scenarios have you put in place? For example. Worst case scenario: i.e., No revenue for April through to August and reduced revenues from Budget in Q4.
Forecast: Reflects a slowdown in business through to July with revenues returning to budgeted levels from July through to December, which includes substantial cost containment measures implemented through to end of June.
And finally, a current forecast, with your most up-to-date assumptions.
Those scenarios will or will not run to negative operating cash flow. In my case, I had to understand what options we had for further additional loan drawdown requirements for operations and other projects. Running different scenarios have helped to identify when I shall break even again.
Regardless of your situation, make sure your team is entirely hands-on with a detailed statement of the Sales & Marketing Business Recovery Plan. For example:
• Creating staycation packages.
• Promoting “Pop-Ups.”
• Leveraging Meetings packages with video conferencing.
• Targeting remote- digital meetings.
• Direct contracting for group series business.
Most of your recovery will rely on the local market. For example, develop a staycation package focusing on driving F&B revenue. You should expect less covers due to social distancing measures.
Plan to offset the impact. Include organizing themed pop-up events, promotion of home delivery, in-room dining (available to outside guest at no additional cost), and virtual catering delegate package. Ensure your spa focuses on the local market with an aggressive rate reduction to cover high fixed costs.
I hope this perspective of Asia has helped, and I’m looking forward to hearing from others.
More expert advice can be found on my site. Don’t forget to share your ideas and support the hospitality and tourism industry post-crisis.