Industry Update
Opinion Article30 March 2020

COVID-19 Hotel Resource Guide

By Ahmed Kabani, Vice President Investments - Senior Director at Marcus & Millichap Kabani Hotel Group

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Given the uncertain times that we are in, we at Kabani Hotel Group have compiled a guide for hoteliers, to cope with the current state of the hospitality market.

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Although an economic recovery date remains uncertain, previous crises have taught us that the hospitality industry is resilient. Max Starkov, a hospitality and online travel technology strategist, and founder of NextGuest, believes that global tourism will recover quickly due to the growth of the global middle class. By 2030, this class is expected to reach 5.3 billion people, and middle-class spending is expected to grow from $37 trillion in 2017 to $64 trillion by 2030. Hereby, an additional 2 billion will enjoy increased purchasing power from today, translating into more disposable income, better education and ultimately a stronger urge to travel and explore the world. [1]

It is important for hoteliers to mitigate the impact from this pandemic, and properly prepare their investments for when the market starts to recover.

Managing Cancellations

Hotel revenue leakages are significantly affected by the number of room cancellations. Because of the multitude of travel restrictions and deterrence, hotels should focus on retaining existing business. The phrase dominating the minds of marketing reps in the event industry "postpone, don't cancel" should serve as motivation for hotel sales employees. Train your staff to incentivize a potential canceller into postponing their trip or offer them a generous credit to your brand.

In a recent survey by Longwoods International, only 28% of American travelers with travel plans intend to cancel completely, with 58% intending to postpone, and 22% switching from international to domestic travel. This bears good news for hoteliers especially as the latter group will be searching for domestic accommodation. To capture that market, hotels will need proper sales, marketing and revenue optimization strategies in place. [2]

Training and Managing Staff

"We spend so much time working in the business, we don't have time to work on the business. This is the time to work on the business" - Cindy Novotny, managing partner, Master Connection Associates.

During this time, it is a good idea to develop your hotel's strategic plan and human resources. Touch base with all clients, review your business plan and financial statements. Perhaps this is the time to attempt an innovative marketing approach? Ensure that your staff stays informed on the current status of the hotel, as with the uncertainty facing the industry, many may be anxious regarding their financial stability. Be transparent with them. However, if you have quality talent in your workforce, furloughing or terminating them could be more costly to your business than keeping them, if you are able to support them in the short-term. "Your sales, marketing and revenue optimization professionals are just that; professionals. Now more than ever, you need to take full advantage of their expertise." [3]

Moreover, it is of utmost importance to adequately train staff to meet the concerns and needs of customers arising from this sickness. Fisher Phillips have developed an excellent 8-point plan for hotel employers, following is an excerpt of important measures:

  • Ensure strict and regular sanitation methods. Increase measures for doorknobs, elevators and other common areas.
  • Require housekeeping and back-of-house workers to wear gloves.
  • Place hand sanitizer strategically throughout the hotel
  • Implement a no-touching policy (no handshakes, hugs or close contact)
  • Stop all self-service food buffets

Train Your Staff to Address the Following Issues:

Is it appropriate to ask a guest questions to determine if the guest has the coronavirus (COVID-19) or has traveled from an affected area?

It would not be appropriate for an employee to ask a guest if they have the COVID-19 virus. Employees should not make any assumptions that the guest has COVID-19 or any other illness.

Refusing to accept a guest who exhibits symptoms of COVID-19 or who informs the hotel they may be sick

Politely and sincerely inform the guest that they are not able to check in for the safety of other guests and employees, and that they should seek medical help. Ensure that your staff has appropriate medical and emergency contacts to distribute to these individuals. [4]

On a final note, we recommend viewing the following webinar:

STR - US Hotels and Covid-19 Impact

We hope that the resources presented in this guide will prove helpful to you, our valued client. In times like these, the hotel leader's response could be crucial to the future prosperity of the property. We are experiencing a market which holds significant uncertainty. Thus, it is important to educate yourself with the ample resources available online and tweak your approach. Be cautious, educate yourself, and most importantly stay safe. This will all be but a chapter in a history book.

References:

[1] https://ec.europa.eu/knowledge4policy/foresight/topic/growing-consumerism_en

https://www.linkedin.com/feed/update/urn:li:activity:6645348703664123905/

[2] https://global.hsmai.org/insight/hsmai-perspective-why-cutting-sales-marketing-and-revenue-optimization-is-short-sighted/

https://longwoods-intl.com/news-press-release/covid-19-and-travel-sentiment-survey

[3] https://global.hsmai.org/wp-content/uploads/2020/03/HSMAI-AsiaPac_RateGain_Study_COVID-19_And_The_Hospitality_Industry_reduced.pdf

https://global.hsmai.org/insight/hsmai-perspective-why-cutting-sales-marketing-and-revenue-optimization-is-short-sighted/

[4] https://www.fisherphillips.com/resources-alerts-8-point-plan-for-restaurant-and-hospitality

Ahmed Kabani

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