Industry Update
Opinion Article 2 July 2020

Unconstrained Voices

Staying Positive in the Face of Adversity

By Klaus Kohlmayr, Chief Evangelist at IDeaS Revenue Solutions

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For everyone whose lifeblood is the hotel industry, the last few months have been heartbreaking. Of course, COVID-19 has wreaked havoc and unimaginable pain and hardship for countless people around the world, but we could never have imagined seeing the entire world stop traveling completely.

I experienced this disruption firsthand while on vacation in New Zealand, having to scramble to find a safe place to "shelter" for an extended period of time, with travel restrictions and flights changing literally by the hour. Despite being trapped Down Under—mind you, I can think of far worse places to be stuck in limbo—my IDeaS colleagues and I held a few virtual brainstorming sessions to determine how we could best help the industry we love so much during this crisis.

One result was the quick development of a new podcast format for my Unconstrained Conversations video series. Spinning up a new podcast in a matter of days can be challenging, but by turning it into a weekly series, we felt we would be better able to provide easy, ongoing access to conversations for hoteliers, by hoteliers. This forum allows them to share what they are doing, how they are coping and create an understanding that we are all in this together.

Following my first several conversations with hotel leaders from around the world, I wanted to compile some of their unique insights. I am so impressed by the capacity for guidance, caring, empathy and stellar communication these leaders have demonstrated during this time. I think you may agree.

A Tremendous Learning Curve

Like so many hoteliers over the past few months, Robert Herr, the general manager of the Bürgenstock Hotels & Resort in Switzerland, had to make extremely difficult decisions for his business. In our interview, he spoke about his team's decision to close two of their properties prior to government mandates and the necessary discussions with owners and investors. Herr explained how this fully integrated, multi-purpose resort saw an early impact to their business. Fortunately, no employees lost their positions, but were put on "short-time" work status, similar to unemployment in the U.S.

His team realized fairly quickly that in two of the three sections of the resort, business would need to be suspended. The third section, which is dedicated to medical and rehab patients, would need to remain open, but was kept at a low occupancy level.

"This has been a tremendous learning curve for me and the entire team," Herr said. "Obviously, our human resources team has been busy dealing with so many employees being converted to short-time workers. Additionally, we needed to update our cancellation policy and terms and conditions and as guests began cancelling, we needed to ensure they understood these new policies. Then there was the issue of the security and safety of not only our guests, but our working employees. Providing a security tour was beneficial to all involved.

"We implemented strategies for communicating with guests and potential guests, but also communication with working and short-time staff at every level. I think one of the important factors in all of this was communication, because the worst thing you can do is leave your employees in the dark. Even though we didn't know all the answers, we still kept the lines of communication open to help them understand the process and updates as they happen."

The results speak for themselves. Herr commented that employees have been supportive and understood fairly early on that it was important to take a step-by-step, day-by-day philosophy. As for what happens next, Herr said, "There is no point speculating now. I believe that health and safety will be the topmost priority. Disinfectants will be here to stay, and we will be taking measures to ensure the safety of our employees and our guests."

Finally, they are focusing on the future. Herr believes getting back to normal in a three to six-month time period is optimistic with a ramp up period in the summertime. "70 percent of our guests have typically come from China and abroad. We will be placing a bigger focus on domestic tourism and we believe that there will be more opportunities as the Swiss population are closer and have strong purchasing power. I truly believe many will want to rediscover their own country, since they won't be eager, or able, to travel beyond our borders. We must have tactics and strategies in place to address this customer segment."

A New York City Perspective

Derek Brewster, director of revenue management for the Lotte New York Palace, took time out of his busy schedule to speak to me from the U.S. epicenter of the pandemic, New York City, where everyone was still on high alert. At the time of our interview, Brewster conveyed the need to stay inside and adhere to CDC guidelines with regard to face masks and social distancing.

With hotel operations temporarily suspended, Brewster spoke about the importance of staying flexible, using the time to expand professional and personal skills, and staying positive during times of crisis.

Brewster said learning how to work from home has been a new experience, and he appreciates the fact that he is still able to work. "Working from home is sometimes more productive, but it is a different type of busy," Brewster said. "The day-to-day demands have completely changed, and I find myself looking for a pulse anywhere to gauge movement in the market. It has forced many of us to learn new lessons as we push through this."

While the hotel suspended regular operations, the Lotte has a unique situation in that it also hosts permanent residents. This has resulted in the need to maintain reduced staff to support those residents; however, sales had been suspended at the time this podcast was recorded.

For those still working, Brewster said the focus has been on cleaning and developing protocols for future health and safety issues. "It has been heartwarming to see the dedication of those who are still working at the hotel."

In addition to the necessary physical cleaning of the hotel itself, he noted that spring cleaning of their technology systems has also been in full force. "We have been able to catch up on projects that we were never able to get to in the past," Brewster noted. He also stated that vendors and service providers have been more able to update their systems during this time.

He went on to say that many data points he would normally take into consideration, such as pace, are irrelevant. "My focus has been more about making sense of the lack of data," Brewster said. "Pickup is more important, and the rate of cancellations. The flattening of the virus curve is similar to the curve we are seeing in our data. Distribution partners are more important than ever, as are comp sets from the rest of the country and STR data has been invaluable. Our weekly calls have had to incorporate the definition of 'What does the new normal look like?' and 'What will our guests be looking for?' or 'What will the new consumer behavior patterns and needs look like in the coming months, and likely years, as they evaluate where they want to stay?'"

Focus groups of top clients have been helpful in determining what this new normal will look like. Once the safety and security of employees and guests has been established, the hotel will need to take cues from the city and local hotel organizations to inform next actions.

From the hotel perspective, with regard to being fluid, Brewster noted that making decisions as a team on a day-to-day basis has been helpful. "Revenue and sales must be the most informed and that hasn't changed. Different data sources and different information has been important, as opposed to yielding and demand data.

"From a personal and professional level, I have found that I wasn't as sharp as I should be with regards to digital marketing, so online classes have helped me to better understand what it should look like at our property. But the biggest opportunity for us is revenue generation, as opposed to revenue yielding, and looking at it as we are in this pause situation. Expanding out from revenue management to generate and drive demand is critical.

"Trying to stay as positive as possible during this time is one of the most important aspects, from both a personal and professional level. Our mental state is key. Keeping your mind active and finding ways to engage to grow and develop will be essential in staying connected and maintaining balance."

A New Mindset to a Solid Recovery Strategy

"America loves a comeback story, but few are in love with the process and perseverance required for it to become reality," Sloan Dean, CEO and president of Remington Hotels, said. "What the world looked like yesterday does not matter. If your question is 'When do we get back to February 2020?' then you are not armed for success in these times."

Remington Hotels is currently rated as the top hotel management company on Glassdoor. Founded in 1968, the hospitality group has grown into a strong, industry-leading service provider and today manages 86 hotels in 26 states across 17 brands, including 12 independent and boutique properties.

With 90 percent of their associate workforce currently furloughed, taking care of employees in these trying times is a priority and Mr. Dean, who is of a like mind to Mr. Herr, highlighted the fact that during the worst of times, clear, frequent and open communication is key. This includes telling people the truth about how bad things will get.

As Dean expressed it, there is nothing worse than coming back every week telling people it is actually worse than previously thought. He made a point of stressing to his teams throughout the crisis that things will get worse before they get better. To accommodate this thinking, Dean has made it a point of holding online meetings twice a week with his teams.

With webcasts every Tuesday and Friday, Dean noticed moral was slipping. Many thought it would be a sharp V-shaped recovery. But as time went on, it was obvious it would be more of an L-shaped recovery. Dean said, "If you deliver even bad news in a candid and transparent fashion, people take it better."

To provide his team with insight, he likened the situation to a reverse hotel opening. "We are effectively back at day zero for at least 90 days," Dean said. "Having that mindset and analogy of a reverse-engineered hotel opening arms people with new expectations. When you can frame a situation as a worst-case scenario, and then the situation becomes even worse, it creates stress, emotion and sends most people into a dark place. If we can empower them to be more motivated, that today can be better than yesterday, we can provide them with a sense of motivation.

"The 'day zero' scenario seems to help them manage the crisis as we move forward with daily efforts to gain ground from low occupancy to when business will begin to come back. Reverse engineering the hotel opening has been a saving grace for many of our employees struggling with the bad news. Lead with the bad and you can only go up from there."

Dean created a list of things he thought he could learn as a leader during this crisis. Then he created a separate list on how his team could be strategic and make this a long-term, beneficial event for Remington itself.

"This allowed me to think in a positive fashion," Dean said. "What can I personally learn and what can the organization learn during this time? Make sure you are staying emotionally connected. As social distancing has taken away from our normal day-to-day activities, small things matter the most. Whether its employees who remain working or are on furlough, Remington and its executive team have maintained balance and communication with all staff and will continue to do so."

Turning Adversity into Opportunity

At the end of February, New Zealand noted the first case of COVID. Accor had recently stepped up to help during the brush fires in the region. This inadvertently helped the company prepare for the crisis as the pandemic moved across the country, leaving 200,000 tourists stranded. To make matters worse, citizens of New Zealand trying to return were told they would need to quarantine at a hotel for two weeks before returning to their homes.

Iain Ganner, regional director of sales and marketing for Accor New Zealand, Fiji and French Polynesia, shared how his team managed to partner with the New Zealand government in their fight against the coronavirus.

Through foresight, teamwork and perseverance, Accor lined up all stakeholders, including hotel owners, general managers and the corporate teams. When the call for assistance came from the New Zealand government, Accor was ready to jump in and provide much needed aid to quarantine the many New Zealanders returning from overseas and shelter tourists waiting for repatriation flights home. This amazing story is not necessarily unique to Accor New Zealand; however, it demonstrates that even in the face of the worst global health crisis in 100 years, opportunities exist.

"Executives at Accor began having discussions about how to not only help the stranded, but also to help the government in crisis response," Ganner said. "Then we asked the general managers and the sales and marketing teams to report about any interaction from the government and what they may need.

"This intelligence gathering helped us assemble the signals coming in and respond as a unit. We were then able to better communicate with district health boards and other agencies to understand where the needs were and how big the response from the government would be."

Ramp up came fairly quickly, and the insight into how the government was thinking allowed Ganner and the executive and management teams to come together to develop a coordinated response. The swift response among the Accor teams gave a signal that they were ready to assist, buy-in was complete and they were willing to go the distance in assisting in the efforts.

From there, each hotel had to make a decision about their willingness to take in COVID-positive patients, self-isolation guests, as well as healthcare and government employees who needed a port in the storm.

Clear commitment, even without knowing the need, was key, as well as ongoing communication. Ganner noted, "The general managers of the individual properties went above and beyond in this effort, sharing empathy, care and love that helped Accor gain the respect of not only returning citizens, but also outside tourists."

As a result, Accor was an integral part, along with other hotel chains, in helping the country manage, mitigate and quickly overcome the pandemic.

Future Conversations

The Unconstrained Conversations podcast continues as the industry and the world slowly recovers, with plans to check in on some of my earlier guests for an update on their progress. Future episodes will continue to feature real-world stories and actionable advice in revenue management, total profit optimization and driving a connected commercial organization from some of the world's most creative hotel industry thought leaders. Stay tuned.


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Klaus Kohlmayr

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