Alison Guillot
Originally published on Amadeus Insights
COVID-19 will have a lasting impact on the global hospitality industry. While hoteliers prepare for an uncertain future, the most important step they can take in the near-term is to implement a comprehensive reopening strategy to make the most out of any demand as it returns. But where to start? What are the key actions and considerations hoteliers can make to support a successful recovery?
In partnership with Hospitality Sales and Marketing Association International (HSMAI), the Hospitality Professionals Association (HOSPA), and the Institute of Hospitality (IoH), we’ve developed a series of recovery eBooks to help hospitality professionals chart their course for recovery in the aftermath of COVID-19. Together, we surveyed HSMAI board members worldwide, conducted dozens of interviews with global industry experts, and leveraged Amadeus’ internal expertise to compile specific, actionable ways to build and execute recovery plans across marketing, sales, revenue management, and operations.
Across the eBook series, four significant pieces of advice stand out.
1. Hoteliers need to re-evaluate their core customer segments and feeder markets
Hospitality providers need to be aware that their business mix is going to change. 82% of HSMAI survey respondents expect leisure travel to be the first to start booking again. But they also identified that due to varying levels of impact and regulations across geographies, hotels’ traditional ‘feeder’ markets might change, resulting in a need to shift focus to different regions.
“Previously, New Zealand was not a key market for our property in Australia. Now that it’s one of the first markets that may offer booking potential, we are taking the time to understand booking behavior and buyer personas and build strategies around this.”
– Helen Radic, HSMAI Marketing Advisory Board Member, APAC
For this reason, it’s critical to research what the latest government guidelines are in your area as well as feeder markets. Cross-reference what you find by analyzing what other businesses and competitors are doing locally, then use the information to map out how you think travel will begin to phase back.
2. Pair flexible cancellation with options for rebooking
Many airlines have announced their commitment to customer wellbeing by waiving cancellation and change fees in the event travel plans must be delayed. The hospitality industry should act similarly by creating a cancellation or rate plan for groups, corporate, and transient guests with the same flexibility.
Start by giving all types of future guests the ability to switch their reservations to a later date, but don’t wait for them to contact you. 81% of HSMAI members say they are prioritizing customer check-in calls as part of their recovery strategy, so consider engaging your sales team in this process to keep customers and groups from outright canceling trips. This includes proactively reaching out to any groups who previously canceled to find out what it would take to win their business back.
Above all, hospitality professionals should strive to be sincere and flexible in their guest communication strategies to acknowledge the need for cancellations to rebook when the time is right.
“We all know that the hotel industry is going to change. But we know far less about how our customers’ business will change. Sales teams must go into investigative mode and understand how their customers’ business is shifting. The sales teams that understand this are the ones who are going to win.”
– Holly Zorba, HSMAI Advisory Board Member, North America
3. Create a flexible pricing strategy while guarding rates
According to our research, only 13% of HSMAI survey respondents feel confident in their current rate and occupancy forecasts. Therefore, it’s critical to focus on finding a baseline for what your occupancy levels will look like throughout each phase of recovery – local, domestic, continental, and global. Make sure to check applicable government guidelines to see if there are any restrictions on occupancy and be realistic about the volume of guests you think will book. Let that perspective help drive the rates you offer in each phase of your plan.
In a challenging economy, rate parity can become a glaring issue. In our opinion, it’s important to track rates closely across every channel and take action as necessary. Combine your pricing plans with focused efforts to encourage direct bookings to capture the highest revenue possible, while maintaining a healthy distribution mix. Additionally, resist the urge to slash your property’s average daily rate (ADR). Significantly dropping ADR may be a temporary solution, but it can take much longer to recover from. Instead, go back to the basics of your pricing strategy to adapt to an ever-changing landscape.
“Any segmentation strategies that worked before this crisis will most likely be irrelevant now. Hoteliers need to rethink how they prioritize each traveler segment because travel is going to resume in phases. Revisit your strategy and build the right prioritization roadmap based on which segments are going to resume travel and when.”
– Julien Barre, HSMAI Advisory Board Member, EMEA
4. Evolve operating procedures to address health and safety concerns from both staff and guests
The hospitality industry has an enormous responsibility to help mitigate the spread of COVID-19. 38% of HSMAI survey respondents feel the most significant and immediate change to traveler behavior as a result of the virus is a greater focus on health and safety. Winning the confidence of ‘Generation Clean’ will require a thoughtful examination of current business processes to prioritize the wellness of staff and guests through social distancing and thorough sanitization, while maintaining the core of the experience customers know and love.
“We have to think outside the box. We have to put on hold what was ‘normal’ and create a ‘new normal’ that still delivers the high standards and enjoyable experiences that we once knew.”
– Peter Ducker FIH, Chief Executive, IoH
Be sure to reinforce your hotel’s cleanliness commitment to guests and stakeholders at every chance possible with open, honest dialogue. Planning for health and safety now – while building a level of trust with guests – will pave the way for building brand equity and guest loyalty tomorrow.
As the industry slowly begins to reopen for business, it’s important to remember we are all facing tough decisions and uncertainty in the future. As an industry, we are resilient and will continue to persevere through knowledge sharing, gauging the intentions of travelers, and observing best practices, while implementing new policies and procedures.
For more details, the full eBooks are available for download here.
About the research
Amadeus conducted research in partnership with IoH, HOSPA, and HSMAI and their senior advisory board. Extensive interviews with 49 HSMAI senior board members, hospitality experts from Amadeus, and senior industry leaders took place in May 2020. A global survey was also sent to HSMAI members of which 117 responded with their insight.
