Although each one of us hopes for the situation to improve at the earliest, a quick reality check points to something inevitable – Covid-19 is here to stay for the next few months, at least.
If you own or run a hotel, it’s time to prepare for a changing world. Soon, you’ll need to work harder than before for a hotel reopening after Covid-19. When the government and health services finally give the go-ahead, it will be time to get back to business.
As things improve, the market will regain its footing, ensuring you get good business in the latter part of the year and throughout next year.
While a lot of businesses are struggling to remain open, some are focusing on ways to maximise the time available during the ‘Great Lockdown’. Though usual marketing activities have taken a hit, hotel owners and managers can still consider several action plans to prepare for recovery.
Once the demand starts to improve, these businesses will have a strong head start and better control on the situation. Understanding customer behaviour, adopting safe and healthy practices, and focusing on implementing clear-cut strategies will be key to turning things back in your favour.
Have the Right Protocols in Place
In all this, the most important step is to check government guidelines about reopening certain businesses in your region. Each business category has been receiving different directives. Once you have all the information, be ready with a ‘Prevention Plan’, and communicate critical Covid-19 information to guests and staff.
Implement Protection / Distancing Protocols
Since Covid-19 is here to stay for at least a few months, you need to implement certain measures to keep people on your property safe. Social distancing, i.e., maintaining a distance of 3 meters from anyone, is a critical step in preventing an outbreak.
It’s important to find the right set of tools for efficient and seamless implementation. For instance, ALICE launched a free checklist tool , which helps hoteliers with the recovery process.
Needless to say, your local health organisation’s protocols should be displayed in all guestrooms and public areas. It would help people focus on critical steps to be taken for health and safety.
Guests and Staff Health & Safety
With changing times, hoteliers will have to focus on the health and safety of guests and staff members. In the post Covid-19 period, it will be critical. Your property needs to have all measures in place to protect staff and guests during interactions with each other.
It will be important to keep inventory of masks, gloves, sanitizers, and special cleaning equipment. Also, you’ll have to arrange for frequent Air-conditioning service and maintenance tasks to prevent infection spread. If possible, it would be a good idea to conduct temperature checks on guest arrivals.
You will need to reduce points of contact but people entering your property should realize that you care about their health and safety. Demonstrating proactiveness in this regard will not just keep people safe but take your reputation a long way in the travel community.
All in-house guests need to be informed – at the point of check-in and during the stay – about several 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.
Review Your Financials
A pandemic is wreaking havoc around the world. It’s creating a completely unprecedented situation. As such, every plan is out of the window, and you’ll have to start afresh.
With new strategies, plans, and actions, you need to factor in the changing times and consumer behaviour. Also, if things get worse, it would be good to have a Covid-19 exit strategy for hotel business.
Assess the Impact
There’s no doubt that we’ll come out of this stronger. But the road is going to be bumpy. According to CBRE research, it has been predicted that the US hotel demand will take about 6-10 months to recover since the beginning of the outbreak in January 2020. It will take further 12-16 months for RevPAR and ADR to recover. Now more than ever, you need a hotel recovery strategy, and should focus on setting realistic expectations and KPIs.
It’s possible that you’re already trying to come up with new financial plans. Don’t forget to check on how your local government is trying to help.
Here are some links that could be useful:
Please feel free to email us the most relevant links for your country.
Have a contingency Plan Ready
It’s possible, if not likely, that if you rely on tourists, you will see your occupancy hitting rock bottom until next year. Drastic approaches will be needed to ensure business continuity. You could consider a few steps for an effective contingency plan.
The most important step is to come up with an accurate revenue forecast for the coming months. What’s the estimated downfall? -20%? -40%? -60%? It will allow you to set realistic expectations.
Depending on estimates, you’ll be able to:
- Review and reduce non-essential spending
- Freeze hiring new positions and schedule vacations accordingly
- Reduce labor cost and operating hours
Optimize Expenses Wherever Possible
It’s time to get back on the phone and contact your suppliers. Just talk to everyone to negotiate new contracts, deals, payment plans, extensions, etc. The road ahead is going to be long and difficult. You need everything to work in your favour:
A lot of vendors have already started offering discounts. Some of them have even suspended charges during the lockdown.
Also, this is the right time to make the move to 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. More on this later in the post!
Get hold of a good marketing agency, and make sure you get the best deal possible. This is the right time to create content, so you have a few promotions lined up once things start getting back to normal.
Start negotiating new contracts with your suppliers in every sector regarding ‘Food & Beverage’, ‘Housekeeping’, etc. “Cut the fat” in all your processes, both with the day to day, like at the reception, and behind it with the more administrative tasks.
Finally, look at temporarily reducing your staff costs if necessary. To put it bluntly: getting a temporary pay cut is better than losing employment.
Implement Practical Revenue Management
While ensuring the health and safety of everyone around you is important, you also need to make some rational decisions to maintain business continuity.
Firstly, it’s crucial to analyse data correctly: this is the perfect time to audit your revenue management operations.
Don’t Go Too Low with Room Rates
Going ahead, you’ll need to constantly review your rates and most probably lower them. You will need to be reactive, flexible and level headed: there will be swings in prices because some competitors will panic and you need to be ready for that.
While it’s the right time to offer discounts and promotions, you shouldn’t go too low: think about your hotel positioning and make sure you don’t damage your brand.
Demand will not 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, which obscure your rates with add-ons and extras: include a ‘Free Breakfast’, or offer a ‘pay for 2 nights stay for 3’ package.
Again: lowering prices won’t drive additional demand and it could lead to more hardships in the long run. This is not a price war and your competitors are not your enemies: you’re in this together because of the virus. We all are!
While the option to crib about the past is always open, consider this to be an opportunity to adapt and succeed. There’s tremendous power in innovation, technology, and determination. Try to focus on new methods and take a holistic approach to Revenue Management.
Improve Your Pricing Management
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.
Compared to the ‘normal’ days, this is a good time to start using a Revenue Management System. It will help you manage pricing automatically, and should automate several aspects of revenue management. If you aren’t already using a Revenue Management System, here’s our list of the top 10 tools.
Update Your Distribution
While most OTAs have leveraged ‘Force Majeure’ 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. Now more than ever it’s clear that OTAs are not your friends and that you should invest everything you can in more direct channels.
Update Cancellations Policies
In 2020, flexible policies are the new ‘normal’. In this unprecedented situation, you can’t blame the guests for wanting transparent and flexible cancellation and modification policies. In order to maintain ‘Cash Flow’, you can create 2 different products:
- Advance Purchase – Pay now, 10-20% discount, with a fully flexible modification policy
- Book now / pay later, and cancel up to 1 day before arrival
Finally, make sure you encourage a change of dates rather than full cancellation of the stay.
Review Your OTA listings
It’s important to maximize your distribution channels. You need 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 guest-friendly policies. Your OTA rates should maintain parity with the official website!
OTAs weren’t really your best assets before the crisis, they won’t be either going forward. Make sure to do everything in your power to reduce reliance on OTAs: make sure your Direct Channels provide guests with the best offer.
Whether it’s the offers you create or the facilities you provide, proper communication is the key to building guest loyalty. Give your guests compelling and clear reasons to book directly on your own official website.
Here’s our full guide: 10 ways to increase direct bookings and pay less commissions.
Communicate, Communicate, Communicate!
In such uncertain times, the natural reaction is to pull back on marketing budgets. On the contrary, now is the time to ramp up your marketing efforts. It will allow you to focus on brand awareness and attract more guests into the ‘Direct Booking’ funnel.
With affordable CPC and targeted marketing, you can reach people already planning their next vacation.
Just remember that you need to be:
- Transparent : to build and reinforce credibility,
- Truthful : to gain public trust,
- Timely : to be authentic and accurate.
Make a New Marketing Action Plan
There will be a time when you reopen, but everything will be different. You need a completely new ‘Marketing Action Plan’ with new strategies. We’ve got you covered! Here’s where to start: How to create a Hotel Marketing Plan
Once you’ve set up a ‘Marketing Action Plan’, you need proper implementation to make sure everything is communicated clearly to potential guests.
Update Your Website & Online Presence
- Update FAQ page – and if you don’t have one, it’s a great time to start!
- Revisit website copy for relevance, value, and brand voice
- Communicate with ‘Top of the page banners & pop-ups’
- Update Google My Business, Facebook, Instagram page
- Update business hours online, remove temporarily closed notices on Google and everywhere else.
- While you’re at it, review your SEO
Build a Communication Strategy
Get Back into PPC Advertising
Double up on Google Ads, Facebook, and Instagram. Whatever works for you!
When properly managed, a Google Ads campaign can be very effective as a targeted, measurable and cost-effective solution, allowing you to focus on a set of audience to maximize ROI. Make sure you have the right strategy! You can find some more information about running a Google Ads Campaign in our Learning Center.
Find new Guests
The ways of the world are about to change! Your business strategy needs to adapt to a changing market. Whether you used to cater to leisure travellers or built a property suitable for business executives, you need to find new guests to keep business going.
There will be an awkward period after the lockdowns where the economy will reopen little by little and start to recover. International leisure 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.
Focus on the Right Customers
While leisure travellers will be keen to get on their next vacation, the same can’t be said for business travellers. With video conferencing tools and other digital solutions, the business community will look to travel less and work more.
Your hotel needs to adopt a strategy to cater to various customer segments depending on your location, property type, amenities, etc.
Reach Out to Regular Guests
Engaging with your existing and valuable clients is now more important than ever. It’s time to build rapport! If you had put in the effort to build close emotional relationships with your regular guests, they’re likely to reap benefits now.
You should offer them ‘Advanced Purchase’ discounts, and communicate clearly your health and safety practices.
With trust and credibility, they’ll be more likely to stay in a place that cares about their well-being.
Touch Base with Your Partners
Use the time on your hands to nurture partnerships. After all, we’re in this together! Reach out to partners and vendors via email or calls. You could even conduct face-to-face virtual meetings.
You should offer the possibility of new contracts to your favourite travel agencies and local businesses. When business picks-up again, you should be the first one they call.
Develop Domestic & Sustainable Trade
In the coming months, staycation will bring most of the business. For the time being, people will want to avoid travelling long distances, and would instead support the local economy.
Once again, your cancellation and modification policies need to be flexible. All your guests should feel safe and appreciated. Positive words go around for a long time.
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 bring in a lot of interest.
Provide Assistance to Your Community
Right now, it looks like Covid-19 is unfortunately going to stay around for a while: we will have to do with it going forward, hopefully with as little impact in our daily life as possible – if possible.
Healthcare workers and volunteers will be in great need: consider offering an affordable rate or complimentary rooms for those working around the clock and/or need to self-isolate from loved ones. This will help recover faster once we are back to normality. This is not revenue generating now but will pay off later.
Be Ready to Reinvent Yourself
Be as helpful as you can with local authorities, friends, guests or health authorities. It is likely you will face problems you’ve never met before, and you will need to be inventive and strong.
There’s a million ways to keep your business going and it’s going to be key to your recovery. If rooms are empty, you might need to look for completely new revenue streams.
- Offer discounts to health professionals or for people that need to self-isolate from their families
- Switch to long haul stays or medium-term guests
- Open your kitchen to online delivery services
- Offer your rooms to the local government. Here’s a good initiative from Cloudbeds – also one of the top ranked all-in-one PMS in our Marketplace – called: Hospitality Helps.
- Contact the local chamber of commerce and see how they can help
- Contact local charities and see if they need help, etc.
Focus on Automation
Upgrade your technology stack! It’s the right time to start afresh on a new and better PMS system. Now is the best time to break existing contracts.
Make sure your processes are as efficient as possible: from getting a new guest through your website to the check-in process and the post stay email, there should be as little steps as possible.
Consider fully digital check-in options with pre-arrival web check-in or by getting a kiosk at the reception. The guest journey should be smooth, convenient, and pleasant. This will greatly reduce day-to-day friction and you will be able to allocate staff to more important tasks.
You could look at implementing an instant communication chat system to enable your staff & guests to easily communicate with the same efficiency of an in person conversation.
A chatbot could be a great way to increase your website’s productivity: Asksuite for example is a nifty solution that could help you answer travelers’ questions automatically on your website – worth mentioning here as they are free for all 2020 to help with COVID-19!
You should also look at Revenue Management Systems to help you price rooms based on real time data without relying on last year’s numbers. It’s a good way to save costs and increase sales at the same time!
Algorithms are here to help you handle day-to-day adjustments, and allow you to focus on the big picture strategy and manage by exception. Take advantage of the situation: one of our favorite RMS solution: Roompricegenie is completely free for new users during this crisis and until further notice.
Think outside of the box! Could automated locks prevent contamination? Yes! What solutions can you implement today in your hotel?
Stay Calm and be Flexible
The economy worldwide is being hit hard. It’s likely that countries and areas relying on tourism will have a terrible year, and that recovery won’t happen until next year. You need to prepare for the worst and hope for the best.
Things change fast! Lockdowns might continue for months, but things could go back to some kind of normal quicker than you think. You need to be adaptable, dependable.
For thousands of years, human will has overcome obstacles. If there’s one thing history has taught us, it’s the fact that we will overcome this, sooner or later.
It is critical to have confidence in the future. A positive attitude, more often than not, leads to the right decisions. Combined with the right intent, it will help you become an integral part of an evolving and whole-hearted hospitality ecosystem.
While you wait for the recovery, this is the time to be ready with a well thought-out ‘Digital Marketing Action Plan’. At the same time, you need a solid communications strategy. It’s more important NOW!
Only the fittest will survive this battle. As a business, you want to be ready. Trust us, there will soon be an end of Covid-19 lockdown for hotels and people will start to travel again. In the meantime, you need to make the right choices:
- Expand your marketing budget,
- pick up the phone and reach out to vendors,
- get in touch with your OTA managers,
- and build a contingency plan.
Don’t just sit idle! Plan ahead for better times.