Since Coronavirus (COVID-19) outbreak, the world has come to a complete halt. The effects of the virus are disturbing every aspect of people's daily life. Social distancing, travel bans, closing of schools and universities, working from home and forcing the cancellation of events. These also have a dramatic impact on hospitality industry. Hotels key performance indicators like occupancy rates, ADR, and revenue per available room continue to decline globally.

However, according to a research by Knight Frank in April 2020, the return of demand of the UK hotel market including London and Edinburgh are likely to recover faster, and possibly be able to attain a full recovery by Q4 2021. If the lockdown is to be lifted by the end of June in 2020.

Knight Frank states that it "forecasts a V-shaped, stepped recovery, with occupancy growth beginning slowly in Q3 followed by substantially stronger growth in Q4 as travel confidence returns. This will then help to drive the ADR growth, leading to an overall recovery for the UK hotel sector. Q4 is also expected to see a surge in investment volumes. The speed at which the UK hotel market has recovered following major events in the past, such as the economic downturns in 2001 and 2009, SARS and Brexit" These findings provide some hope for a rationally instant return to positive growth numbers, notwithstanding there are still many unknowns ahead.

So, what hoteliers should do during COVID-19 crisis? We will discuss about how to maintain consumer relationships in hospitality sector throughout this hard time. As well as how that will leads to better image on the hotel brand post-COVID-19, when eventually the market is anticipated to slowly recover by next year.

The following is a powerful tool for hoteliers to prepare for the recovery after the coronavirus pandemic crisis:

Customer Relationship Management (CRM) is a business strategy to select and manage the most valuable customer relationships. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales, and service processes. It is a set of strategies, processes, programs and systems to develop loyalty and repeat-purchase behavior among the customers. It helps to grow a relationship with the customer from the first introduction and throughout the entire client's lifecycle. They are the backbone of hotel industry, maintaining the relationship with them always leads to positive outcome. Increase in customer retention and satisfaction will increase repeat business and word of mouth.

The CRM Process are shown below:

Source: Farazad Group Ltd.Source: Farazad Group Ltd.
Source: Farazad Group Ltd.

1. Collect Customer Data

  • Customer database, transactional information and recording of interactions. Big data helps hotels deliver a personalized proper CRM Programs

2. Analyse customer data and ID high value customers

  • Understand and analyse all types of information:
    • Behavior (Length of stay, types of service in the hotel such as spa or dining)
    • Characteristics (Age group, small or large group)
    • Needs (Event space, meeting room, group booking)
    • Expectations (Wi-Fi, complimentary breakfast, concierge)

3. Develop CRM Programs

  • Create loyalty program - but make sure the program is simple and transparent. Higher tier customers tend to be more loyal and they want to be rewarded for that. They tend to place more value on customer service than prices and promotions.

4. Implement CRM Programs

  • Many CRM systems combine email, SMS and other forms of communications. While hotels are closed and people are not allowed to travel, staying connected to the existing and new customers via the above mentioned are great way to drive booking when travel demand rises, as well as attract new upcoming customers. Some examples of CRM programs to fuel growth are as follows:
    • Keep your hotel website updated. Share recent policy, prevention plan and announcement regarding COVID-19. Updates on when hotel is planning to open for new reservation with special offer/promotion and exclusive experience package.
    • Allow flexible cancellation policy assuring customers feel at ease during this uncertain time.
    • Launch an email campaign offering courtesy bonus or extra perks to incentivize cancelled reservations to rebook and purchase.
    • Create personalized opportunity. Using data based on preferences of your existing customers, you can present them with free room upgrades, spa or dining experience. For corporate customers, it can be offering a tiered selection of meeting-room snacks in the hotel restaurant.
    • Automated marketing campaign for birthday or anniversary of the past guest's stay encouraging them to rebook and enjoy the great experience.

In conclusion, CRM is a crucial management tool that hoteliers can use to achieve more revenue and maximize the value of the customers. Hospitality sector's greatest assets are the data and knowledge of their clients. They can use this asset as the key competitive edge to retain these customers who represent the highest lifetime value and profitability.

Korosh Farazad
Founder and Chairman of Farazad Group of Companies
Farazad Group Ltd.