The global hospitality industry has been through every perceivable calamity over the past decades: earthquakes, tsunamis, tornados, major floods, terrorist attracts like 9/11, SARS, global recessions, epidemics and pandemics like SARS, MERSA, ZIKA, swine flu and now COVID-19.

After each crisis the industry came roaring back and I believe it will recover very quickly after the current COVID-19 crisis and prosper like never before.

Naturally, each region and destination has had and will have its own decline and rebound curves as far as hotel occupancy, ADRs and RevPARs are concerned. Recovery post COVID-19 will also be unique to each region, destination and property and will greatly depend on a) the underlying economic conditions in each region and destination, b) the preparedness of each property for the post-crisis period, and c) the lingering impact of short term tactics employed in each market during the crisis.

This down time of low hotel occupancies or property closures is the perfect time for POST-CRISIS planning, revenue optimization action plan development, product and marketing campaign ideations.

The question to the Revenue Management community is, which specific action-items SHOULD be included in a hotelier's Post-Crisis Top Three Revenue Management Action Plan? In addition, please suggest one creative, OUTSIDE-THE BOX idea... something we may not have seen yet in revenue management. Just an idea... big or small.

Damiano Zennaro
Damiano Zennaro
Director, Global Advisory Services at IDeaS Revenue Solutions

It's true that the hotel industry has been through many storms. However, it has never seen a black swan event like this one. As the leading brands expect revenues to decline by an unprecedented 70% or more, millions of people are out of work and we are still 3-6 weeks away from the peak of the crisis. Depending on the country or region, it's difficult to discuss actions to take for a recovery which might not start to happen in earnest until Q4 2020 or beyond. I do see some common plans you can pursue independently though, based upon where your hotel is located or when the recovery will take place:

  • Because domestic and local travel could be the first area to recover, consider how you'd engage with these travelers. Are you ready to welcome them? Are you regularly communicating with potential local guests? What are you doing to address safety concerns from guests staying in your hotels?
  • Be creative in offering added value packages. People will look for short distance leisure destinations that provide good value for the money. While customers will be price sensitive, they (we) will all look forward to spending some time and money out of the house after weeks of quarantine.
  • While it's very tempting, stay away from aggressive requests of inventory availability and pricing cuts. Rethink your distribution strategy and avoid heavy dependency on third party channels. At the first sign of recovery, they will certainly come running to offer many incentives (not always to the benefit of the hotels) to “stimulate demand” and “help you drive occupancy.” However, the time is now to lay the foundation to drive direct business. Make sure all your marketing assets are ready to launch when restrictions are lifted, you have a sound social media engagement strategy and are focusing on direct business first. Make sure you stay engaged with prospective guests/markets throughout any hotel closures.

Creative idea: Pursue and aggressively court government, health authorities and emergency-related business to see you through the next few months. We have seen some very successful initiatives with hotels getting significant room nights for a variety of purposes, including isolating returning citizens, providing accommodation to stranded tourists and/or quarantine measures. 

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