How can hotels stand ahead of the curve when demand returns?
— 14 experts shared their view
According to Bloomberg, over 300 million doses of COVID-19 vaccines have already been administered; President Biden said the U.S. expects to vaccinate every adult by mid-May, and 53.7% of Israelis has received the first dose of the coronavirus vaccine. We are still not out of the woods, but things look brighter than they did just a few months ago. It is likely, therefore, that travel demand will slowly return in 2021, and we're already seeing some destinations with a decent pickup for the summer. With these first signs of hope, it's quite predictable that hotels will fight hard for market share, especially during this unstable year. In this particular situation, how can your hotel stand out from the crowd and stay ahead of the curve?
Commercial Leader | Marketing, Revenue Management, Sales |
"No battle plan survives first contact with the enemy" (H von Moltke, German military strategist). In our western business culture, there is often a reliance on detailed plans to bend reality according to our desires. This desire is also apparent during COVID-19 and corporate offices, ownership groups are trying to get hotels to create plans to benefit from the eventual recovery.
At the same time, nobody has prior experience with a near-complete shutdown of worldwide travel, nobody knows how consumer behavior will shift, when vaccines will keep the population relatively healthy and when governments will ease internal restrictions and open international borders. Nobody has a crystal ball to get accurate information - all these plans are therefore based on assumptions with a high degree of uncertainty or simple a wild guess
Some destinations have repeatedly changed "opening" dates, governments are fickle in their approach to the matter and vaccine roll-out has not gone smoothly in some parts of the world (especially EU). While detailed tactical action plans may be an illusion, there are a few fundamentals a hotel can and should implement to be prepared for the return of business:
- Retain / Hire your staff early: many colleagues in the hotel industry have been forced to accept positions in other industries. Quite a few will not return to hotels and properties will be faced with a shortage of labor and management talent a few months after the start of the recovery. Having guests travel and a bad experience on their first trip will have negative repercussions on review scores
- Maintain contact with "old" existing guests: Hotels have gone mostly silent in the last year and very few have reached out to guests to keep in touch and update their customers on developments in the destination and the property. Now is the time to start reaching out to guests again. If the hotel does not have a CRM, now would be the time to look into this option
- Focus on shifting share rather than shifting channels: Even after travel starts to return, not every destination will immediate experience the same demand as pre-COVID. Using OTAs to move demand into a particular hotel rather than trying to shift business from OTA to direct bookings will be a more successful strategy for independents and even branded hotels. Let's face it, OTAs have reached out to consumers and they have gotten stronger after each market disruption. Hotels can use them to capture more of the limited demand. Explore options to shift share with volume accounts
- Be flexible: Do not rely on one particular plan or on pre-COVID market knowledge. Booking window, geographic sources, market-mix.. they all will be very different going forward. Everyone starts with a blank slate. Don't expect your 1-year budget you made in September to be accurate in April
- Review your product and marketing message: Leisure business will recover quicker than business travel; large conventions will not come back as soon as independent travel; short-haul holidays will be more popular than inter-continental vacations and drive-to business will come back faster in many areas than fly-in business. Advertising the size of the convention space and proximity to corporate offices may not be the best USP at this time. Find what your hotel can offer to these new guests and update your marketing materials
- Take advantage of automation in Revenue Management Systems (RMS): Excel is a great tool and still useful, but in 2021 there are systems available which can process data so much faster and more accurately than any human being. These systems will also be able to react much faster to changes in demand and make adjustments.
- Take care of the Fundamentals of the Business: Friendly staff, clean rooms, a safe environment, good quality food, knowledgeable Concierge or Sales people, answering the phone when someone tries to reach Accounting - all these will make the guest appreciate their stay and become an advocate.
- Be the "squeaky wheel", if part of a brand with several hotels in the destination
- Don't micro-manage the recovery process: If you are an owner or large corporation, trust your General Managers and Commercial Leaders to make the right decisions to capitalize on opportunities. After all, they are on the ground talking to customers and you hired them because you saw their talent. Telling them what to do or requiring a timesheet of their actions is not empowering or directs time to non-productive activities.
- Fish where the fish are: your sales team should focus on building/ strengthening relationships with accounts that have potential rather than being asked to engage in shot-gun sales blitz type of activities.
McKinsey predicted that a full recovery for the travel industry will not happen before 2024. Some destinations and countries will recover faster - places which are considered safe and healthy, have less business travel, less reliance on air access and are strong in the domestic markets. Every hotel needs to determine which type of destination they are in and set their strategy accordingly.