Industry Update
Opinion Article 5 January 2021

Hotels Hotels Hotels - and a different 2021

By Sharad Kapur, Revenue & Distribution Strategist

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Kapur

A facility like no other

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Hotels for me have always been an enigma. At the forefront, there is glamour, lifestyle, beautiful and functional spaces, interiors which one wishes in their own homes and a space that lets you be; And behind the scenes, it is a factory swarmed with people busy conducting various chores like a clockwork. While not as glamorous as the front of the house, they are buzzing with activities, aiming to achieve a common and a very simple goal. 'Serving the Customer'.

They are a place for people to unwind, to connect and to conduct businesses, to network, to be seen and to have experiences which take them on a culinary, festive, relaxed journeys. It lets their guests make joyful moments become a lasting memory. While not always a perfect experience, it is the endeavour of each hospitality worker to provide genuine and caring service.

But 2020 changed a lot to it. Anything said towards the year gone by will be an understatement in itself, as the world and humankind at large have grappled with realities of the pandemic. While economies and businesses have suffered alike, one of the oldest industries in the world, 'Hotels' and Hospitality, in general, continues to have a tough time.

Hotels have generally borne the brunt of most economic crises in the past as travel reduces and companies and individuals scale back expenses. But this time around it has been very different. With lockdowns and closure of borders, hotels have been shut for too long yearning to come alive.

During my recent travel, a deserted airport, shut shops and practically no open food and beverage outlet was not a pleasant experience. Hotels running record low occupancies is a grim reminder of what has been the cost of the pandemic.

As borders opened in some geographies and as lockdowns eased, many hotels were able to open their doors and welcome customers with beating drums, big and warm smiles and creating a safe and healthy environment for their guests. This is an inherent trait of the industry, 'Welcoming and Caring'.

The resilience and feistiness of the hospitality industry has always pushed it to come through for its customers, and I believe that the industry will shine again like never before.

My sincere hope and wish that 2021 becomes a year where customers line up to recreate those experiences at hotels.

So, what will stand true in 2021 and beyond. My take on a few key elements

Hygienic yet Experiential

Pandemic days led hotels to get certifications for using the highest levels of cleaning products and develop processes to provide a safer and much more hygienic environment for its customers. Hotels will need to keep spending more on its housekeeping as their customers will continue to hold them to a higher standard, even after the pandemic. Today is the new standard and Hotels have a responsibility to uphold this promise at all times to appear more competitive than the alternative accommodations.

The SOP's created for hotels by various government agencies during the pandemic period should not deter hotels to build on their expertise to create memorable experiences for their guests. Such safe practices may continue well into 2021 and hotels must bank on their competency to serve the customer, let their associates continue to create real human connections, and deliver high levels of service at all times despite restrictions. Remember, people want to travel and when they do, irrespective of the prescribed safety standards they would want to recreate beautiful memories once again

Pricing

There are deals all around. Not only the prices are at an all-time low, but the rate-driven restrictions that were either considered value add or protection against no-shows have disappeared.

The mantra is 'Total Flexibility' and that may remain the norm well into 2021-2022

However, when everyone fights for the same piece of business, it usually leads to a hyper-competition that results in price wars. Such drastic reductions in prices may have served the purpose at the height of pandemic to deliver cash flows to a certain extent, but can such practice continue to build on losses?

It would serve hotels well to build on a pricing strategy that helps to alleviate dwindling profit streams and assure hotel owners that the business turnaround will not be a 5-year process.

A price correction that reflects the change in segments and customer's geographic base is understandable, but hotels are well-advised to hold on to their positioning and promise of the right experience which they will be able to deliver at the right price.

Customers also have a role to play. Cannot expect quality if they are shopping for a highly discounted rate

Talent

Hospitality workforce have been affected along with other industries due to the pandemic. There have been layoffs, salaries have been reduced and it has pushed aspirations of people behind by 3-4 years. Too much experience has been lost and the cost of it is high. There is enough talent out there for hotels and companies to pick and choose when the demand returns. Uncertain planning that comes with the Pandemic does not help but what would help is to ascertain needs when the demand is back. You don't want your guests to bear the cost of ineffective services and experiences

While it may take more time for consumer confidence to return to previously enjoyed levels, here is a strong wish for 2021 to be the year of recoveries, connections, joys, and mindful existences

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