What is your take on the coronavirus and its impact on our industry?
— 22 experts shared their view
Hospitality Net introduced a live timeline with relevant and industry-specific coronavirus news, resources and external updates. We asked our contributors to share their professional opinion with you.
Founder & President, Tim Peter & Associates
I'm no medical expert and can't tell you when these challenges will pass. But here are three big "don'ts" to think about not only during the current coronavirus COVID-19 situation but during any economic disruption.
First, don't cut your rates. Anytime business softens, an easy "fix" is to offer deeply discounted rates to your guests. The theory behind this action supposes that you can use lower rates to attract attention and steal market share from your competitors. Except that most of the time it doesn't work. Research from Cornell and STR shows that hotels that maintain rate — even at the expense of occupancy — make more money both during and after downturns. Think instead about how you can include value-adds such as spa or dining credits, tickets to an event, or a round of golf to attract interest and action while still holding firm on rates.
Second, don't cut your marketing. Again, plenty of research shows that hotels that continue to invest in marketing during a downturn outperform competitors during and after economic disruptions. You absolutely need to monitor which marketing channels produce returns and pull funding from underperforming efforts. But drastically cutting marketing altogether is a formula for continued challenges even once the current crisis ends.
Finally, don't let sick employees come to work. Exposing guests and other hotel staff to illness creates more problems than it solves. Be upfront with guests that you value their health and that of your employees during this situation. While it's difficult to run a property with reduced staff, your guests will typically appreciate your focus on your team's well-being and will usually give you a pass for any reduced service they may receive.
Coronavirus COVID-19 is a deeply unfortunate situation. But it's neither the first crisis the hotel industry has faced nor the last one ahead. Offer guests value adds instead of discounts, continue to market judiciously, and take care of your staff as well as your guests. You'll do fine.