Covid-19 has had a prodigious impact on the hotel industry globally. The outbreak presents the hospitality sector in Kenya and beyond with a major headache and a challenge that must be surmounted somehow. In the last couple of months’ travel restrictions and social distancing guidelines have had an adverse impact on the industry. According to UNWTO’s Report on Covid-19 related travel restrictions, by 20th April, 2020, all worldwide destinations had introduced travel restrictions in response to the pandemic. About 45% of the world’s destinations totally or partially closed their borders for tourists, 30% suspended totally or partially international flights, and a further 18% banned entry for passengers from specific countries of origin. The overall result of all these travel restrictions was a devastating blow to the hospitality industry worldwide.
Travel restrictions have begun to loosen around the world and therefore hotel brands are starting to see some ray of hope as they open their doors to welcome guests again or prepare for reopening. The pandemic has transformed hospitality and therefore hotels have to look for ways to reinvent the experiences they offer and how they engage with guests.
The conundrum is once things improve, what new expectations might travelers’ and guests have when choosing a hotel? And what can hoteliers do now to prepare for new demands and requirements that will follow Covid-19? In addition, what do hoteliers need to do to get their fair market share post Covid.
Below are some strategies that the hotels would apply to answer few of those questions;
Implement all the Required Guidelines /Protocols
It is critical to check the laid down government guidelines for reopening hotels in your region. Ensure that you communicate all the guidelines to the guests and staff.
Since Covid-19 is here to stay for at least a few months, there is need to implement certain measures to keep people in your property safe. For instance, Social distancing, maintaining a distance of 3 meters from anyone, is an important step in preventing the spread.
Clearly, your local Ministry of Health policies should be displayed in all guestrooms and public areas. This will help everyone to focus on critical steps to be taken for health and safety.
Health & Safety of Guests and Staff
In the post Covid-19 period, focusing on the health & safety of guests and staff will be very critical for hoteliers. It will be important to keep inventory of masks, gloves, sanitizers, and special cleaning equipment. Conducting temperature checks on everyone entering the property is also very important
All in-house guests should be informed, at the check-in point and during the stay about the various measures adopted, procedures followed, and strategies implemented to keep everyone safe. You should also assign an emergency number and a point of reference for emergencies.
Financial Review
The pandemic has wreaked havoc all over the world and created an unprecedented situation. Hotels can therefore not rely on their annual budgets and revenue projections that they had set before Covid-19 happened.
While coming up with new strategies and action plans, it is critical to factor in the changing times and the current consumer behavior. As you come up with the new financial plans, check out how your local government is trying to help. Ensure that your KPIs are realistic when coming up with the hotel recovery strategy.
Draft a Contingency Plan
If you mostly rely on tourists or even residential conferencing, your occupancy many hit rock bottom maybe until next year. Hotels will need to come up with substantial approaches to ensure business continuity.
The most significant step is to come up with an accurate revenue forecast for the coming months. Have an estimated revenue downfall and this will help in setting realistic expectations. With the estimates, you will be in apposition to; review and reduce non-essential spending and reduce labor costs and hours of operation.
Optimization of Expenses
This could be achieved by contacting your suppliers and renegotiating the contracts, coming up with new payment plans e.t.c
Below are some of the areas that can be reviewed to optimize expenses;
- Technology
Many vendors are offering discounts during this season and afew, if any have suspended their charges.
This is the perfect time to embrace automation. Coronavirus impact for the hospitality industry seems inevitable. There will be layoffs, and if that’s the case in your region, automation could help the business survive. From front office tools to in-room cleaning machines, get ready to evolve and reinvent your approach.
- Marketing
This could be outsourced by hiring a good marketing agency, and ensure that they give the best deal. They will help in creating content, so that you have promotions lined up, and ensure that your presence both online and offline is felt.
- Operations
One of the key cost-cutting way here is negotiating new contracts with your suppliers in every department i.e. Food & Beverage, Maintenance, Housekeeping, etc. Also, look at reducing your staff costs if necessary. It is for instance better to get a pay-cut than to lose a job.
Implement Practical Revenue Management
As you ensure that the health and safety of everyone in the property is maintained, there is need to make some rational decisions to achieve break even and eventually making profits so as to maintain business continuity.
This is a crucial time to audit your revenue management operations.
Don’t ‘Kill’ your Room Rates
Going forward, there will be need to regularly review your rates and and at times lower them. You will need to be flexible because some competitors will be ready for ‘price wars’ and lower their rates significantly.
Whereas it is the right time to offer discounts and promotions, avoid going too low on the rates. Drastic lowering of rates may mess your hotel positioning and damage your brand.
Demand will not necessarily be related to prices. People will be travelling only when they must and they will choose their hotels based on other factors than rooms being at the lowest prices.
Try to offer value-added packages, like having add-ons and extras in your rates e.g include a ‘Free Airport Pick Up’, ‘Free Breakfast’, or offer a ‘pay for 2 nights stay for 3’ package.
Extreme lowering of rates could lead to more hardships in the long-run.
Deliberately Manage your Rates
For the next few months, you’ll have to monitor and optimize performance on a regular basis, more frequently than ever. In order to survive, you need to create the right promotions at the right time, and distribute them via appropriate channels.
This is a good time to start using a Revenue Management tools such as a channel manager, rate shopping tools and reputation management tools among many others. This will help you manage pricing automatically, and will automate several aspects of revenue management.
Update Your Distribution
While most OTAs had leveraged clauses at the start of the crisis, some have been respecting hotel policies. Going forward, it’s better to have guest-friendly and flexible cancellation policies to foster loyalty and encourage bookings. OTAs are a great distribution channel but investing in direct channels such as your website/ Booking Engine is the real deal.
Update Cancellations Policies
Flexible cancellation policies are the ‘new normal’ in 2020. During this season, many guests want transparent and flexible cancellation and modification policies. You can come up with promotions that favour you and the guests too. For Example; Early Bird Offer – Book now and pay, 10-15% discount, with a flexible modification policy.
Review Your OTA listings
It’s important to maximize your distribution channels. It is important to keep a full inventory without any restrictions on all OTA channels. It’s necessary to check different channels and ensure they’re perfectly set up with the reviewed policies. The OTA rates should maintain parity with the official hotel website.
Go Direct
Do your best to reduce reliance on OTAs. Ensure that your Direct Channels provide guests with the best offer.
Develop attractive offers for your direct channels and clearly indicate its inclusions, proper communication is the key to building guest loyalty. Convince your guests why they should book directly on your official website.
Review your Segments
Due to the changing times your business strategy needs to adapt to the changing market. Regardless of your target market before Coronavirus, you need to find new guests to keep business going.
As the economy reopens slowly by slowly, International leisure and business travel will take much longer to recover than domestic tourism. It is crucial that you focus on local guests, keep your community engaged, and show that you truly care for people. In order to develop the domestic market, you could consider reviewing your website Search Engine Optimization & Search Engine Marketing to geo-target local guests. A few pages of new content on your website coupled with targeted ads can attract the local guests.
Currently and in the coming months, staycations may bring most of the business. Many people will want to avoid travelling long distances, and would instead support the local economy.
Build a Marketing & Communication Strategy
This may include creating valuable and entertaining content, starting a new social media campaign that resonates with your guests and bookers
You could also feature on Google Ads, Facebook and Instagram sponsored posts to create more visibility.
When all is said and done, we believe that we will overcome this pandemic sooner or later and the hospitality industry will thrive again without the crisis.
“I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” – Jimmy Dean
By Fridah Kariuki | Revenue Manager | Barefoot Consultancy Ltd