COVID-19 will have a lasting impact on the global hospitality industry. As hoteliers prepare for an uncertain future, the most important step they can take in the short term is to implement a comprehensive reopening strategy to optimize any demand as they arrive. But where to stay? What are the key actions and considerations that hoteliers can take to support a successful recovery?
In collaboration with the International Hospitality Sales and Marketing Association (HSMAI), the Hospitality Professionals Association (HOSPA), and the Hospitality Institute (IoH) we have developed a series of e-books on recovery to support hospitality professionals to chart the course to recover after COVID-19. Together, we interviewed HSMAI board members around the world, conducted dozens of interviews with global industry experts, so that we leveraged Amadeus’ internal expertise to collect specific and actionable ways to build and execute recovery plans through marketing, sales, revenue management and operations operations.
In the e-book series, four important tips stand out:
1. Hoteliers need to reevaluate their key customer segments and reference markets
Hospitality providers will need to be aware that their business mix will change. 82% of respondents to the HSMAI survey expect leisure travel to be the first to book again. But they also identified that due to varying levels of impact and regulations across geographies, traditional hotel source markets may change, resulting in the need to shift focus to different regions.
“Previously, New Zealand was not a key market for our property in Australia. Now, it is one of the first markets that will be able to offer reserve potential, we are taking time to understand the behavior of reserves and the type of buyers to build strategies around this, ”Helen Radic, HSMAI Marketing Advisory Board Member, APAC.
For this reason, it is essential to research the latest government guidelines in your area, as well as your source markets. Cross-reference what you find by analyzing what other businesses and competitors are doing locally, then use the information to map how you think travel will return.
2. Unite flexible cancellation with buyback options
Many airlines have announced their commitment to the well-being of customers by allowing cancellation and change of fares in case travel plans should be delayed. The hospitality industry should act similarly by creating a group, corporate and transitional guest cancellation and rate plan with the same flexibility.
Start by giving your future customers of any kind the ability to change their reservation for a later date, but don’t wait for them to contact you. 81% of HSMAI members comment that they are prioritizing their clients’ registration calls as part of their recovery strategy, so consider including your sales team in this process to prevent your clients and groups from going directly to cancellation of your trip. This includes proactively contacting any groups that you have previously canceled to identify what might earn you the business back.
Above all, hospitality professionals should seek to be sincere and flexible with their guest communication strategies to recognize the need for cancellations or changes when necessary.
“We all know that the hotel industry will change. But we know less about how customers’ business will change. Sales teams should investigate and understand how customer business is changing. Sales teams that understand this will win. ” – Holly Zorba, HSMAI Advisory Board Member, North America.
3. Create a flexible pricing strategy while protecting rates
According to our research, only 13% of respondents to the HSMAI survey are confident in their current occupancy forecasts and rates. Therefore, it is essential to focus on finding a foundation that reflects what your employment levels will look like through each phase of recovery – local, domestic, continental and global. Be sure to review the applicable government guidelines to see if there are any occupancy restrictions and be realistic about the volume of guests you think will be booking. Let the prospect help you direct the rates you will offer at each stage of your plan.
In a challenging economy, rate parity can become an obvious topic. In our opinion, it is important to closely follow the rates through all channels and take the necessary actions. Combine your pricing plans with efforts focused on increasing direct reserves to capture the highest possible income, while maintaining a healthy distribution mix. Additionally, resist the urge to lower your property’s average daily rate (ADR). Significantly lowering ADR may be a temporary solution, but it can take much longer to recover from. Instead, go back to basics in your pricing strategy to accommodate each of the possible scenarios.
“Any segmentation strategy that has worked before the crisis will surely be irrelevant now. Hoteliers need to redefine how to prioritize each traveler segment as travel will be summarized in phases. Review your strategy and build a correct priority map based on which segments will restart travel and when, ”- Julien Barre, HSMAI Advisory Board Member, EMEA
4. Evolve operating procedures to address health and safety concerns of both employees and guests
The hotel industry has an enormous responsibility to help mitigate the spread of COVID-19. 38% of HSMAI respondents feel that the most significant and immediate change in traveler behavior as a result of the virus will be a greater focus on health and safety. Gaining the trust of “the Clean Generation” will require a thorough examination of current business processes to prioritize the well-being of employees and guests, through social distancing and deep sanitation, while maintaining the essence of the experience that consumers know and want.
“We must think differently. We must pause what was” normal “and create a” new normal “that still offers the high standards and enjoyable experiences we once knew”, – Peter Ducker FIH, Chief Executive, IoH.
Be sure to reinforce your hotel’s cleanliness commitment to guests and partners whenever possible with open and honest dialogue. Planning for safety and health now – while building a level of trust with guests – will set the stage for building brand equity and customer loyalty in the future.
As the industry slowly begins to reopen business, it is important to remember that we are all faced with difficult decisions and uncertainty in the future. As an industry, we are resilient and will continue to persist through sharing knowledge, assessing traveler intentions and applying best practices, while implementing new policies and procedures.
I hope the information and advice in our Hospitality Recovery Planning series can help kick-start your recovery efforts at your business to bring back to guests all the wonderful things in the industry we all serve.