The effects of the COVID-19 crisis have drastically impacted the hospitality industry. Recent events have lead to changes in consumer behavior, travel trends, hotel operational restrictions, and even new ways of evaluating hotel performance such as GOPPASR vs. REVPAR. Increased concern for the safety of guests is now part of the new normal for the Travel, Tourism and Hospitality industries.
Hotel owners are re-evaluating new “break-even” points prior to re-opening. A once typical 40% break- even occupancy rate will be difficult to achieve during these times; locations such as convention hotels will not returning anytime soon, so they will pursue new businesses they had not considered prior. These efforts will add additional pressure upon ADR for all other hotels in the market. As a result, it is crucial to make a paradigm shift in the way we sell and market travel.
The Survey Results Are In…
In the past, the hospitality industry had been slow to adopt new trends, but the current climate is forcing radical changes. Recent consumer sentiment surveys show a slightly more confident attitudes towards travel, but confidence has not been fully restored. Many are taking a “wait and see” approach to determine what the early experimenters of travel will find.
Others are waiting to see how personal family finances are affected during this economic downturn. Millennials and Gen Z’ers are more likely to be the firsts to book flights, with Gen X’ers closely behind. Many different factors are at play for those involved in travel marketing, more than ever before. Advertisements must convey a message safety and security while simultaneously not raising anxiety in potential clients. Honesty in marketing is more important than ever.
Travel surveys by Destination Analysts and The New York Times Coronavirus Travel Sentiment Index research present a look at the future of travel. They claim that the outbreak will undoubtedly change how we think, act and travel, at least in the short term.
At the onset of the pandemic, many ownership groups had no option but to lay off and/or furlough their entire sales teams. Luckier owners did not go to that extreme, however, all are still faced with huge cost challenges coupled with reduced demand while having to make decisions to bring some of their teams back on. Now, more than ever, it is essential to have a dynamic and nimble sales strategy in order to gain strong traction on the reentry.
Preparing for Your Re-Entry
Now is not the time to “dust off” old sales playbooks and just let sales teams return to doing business as usual. Technology is now more important than even before and every member of the sales force must be well-versed in hosting online/virtual walk-throughs, site inspection and using many other professional tools available to showcase the properties, the destination and their services.
Despite the more important than even need to enact “Sales 101” procedures such as phone calls, relationship building, etc, virtual site inspections may become the norm for a while and the hotel and/or destination will need to have ample video content, 360 tours, photography and floor plans depicting the new alternative menus and set ups. A perfect example of how some hotels and destinations are bringing themselves to the client are the Faroe Islands, destination which has rolled out “Remote tourism” virtual tours conducted by locals and where individuals can actually “control” where the locals go and what they visit on the islands, virtually in a set up similar to that of a video game.
Not only does this technology allow the viewer to actually experience the destination, but it also provides the destination the opportunity to create an affinity for their brand, open up the lines of communication for future messaging, establishing trust, ad well as allowing for the opportunity for the viewer to become more comfortable with the destination and their brand.
Consumers are now very accustomed to video telecommuting and video conferencing. While these tools, if used correctly by a hotel’s sales team are great cost savings efforts, they should run a side-by-side as part of a physical relationship; video site inspections that create a more tangible relationship if you will. Hotel teams should incorporate snail mail as a follow up or before holding a video site inspection to build trust and confidence as video conferencing replaces “traditional handshakes” and until planners are able to conduct site inspection in person once again.
The Importance of Business Partnerships
Now more than even it is important to be true partners with Convention Bureaus and Destination Marketing Organizations (DMO’s) as well as State-run Travel marketing organizations as consumers have expressed a greater dependency and trust in such organizations. Important conversations on how to yield higher returns under the current environment and measuring that ROI is key. And speaking of exposure and reach, are we all going to go back to third party OTA’s to yield 30% of our business or are we going to spend our hard to come by dollars on strategies that focus on direct consumer vs. a third parties? Now is the time to consider all options and redirect strategies to support our decisions.
In addition to the need for all sales team members to be fluent in various technologies and platforms, we must also consider the fact that the markets will behave differently, that the leisure demand will likely return first, the different demographics for those customers willing to travel now, that the group business that you are able to capture now will most likely be limited in size due to capacity restrictions, and that it will more than likely be social in nature vs. corporate.
Understanding Your New Market Segment
This shift in market segmentation, the decline in business travel demand, potential new government mandates and forecasted declines in rate in most markets will no doubt result in different percentage mixes between pre-pandemic hotel segments and post-pandemic reality. You must audit those market segments that are likely to produce, and shift your customer-facing marketing to target these first. I am not saying that you will need to walk away from group larger group sourcing platforms since group is likely to return later, but rather to optimize presence in platforms targeting social business, and to focus sales team efforts on those which are likely to return the faster ROI.
It is likely that a lot of the contacts that the teams used to speak with have changed due to furloughs or terminations and that an entirely new relationship may need to be forged with even past clients. The fact that some owners may only be able to partially re-hire some of the sales team members and/or concerns with payroll costs and having a team with blended responsibilities for the sales may also yield a different problem.
Changes in Staff Deployment
Staff deployment should also be re-imagined, in order to solicit those market segments offering the best short-term revenue opportunities. Alongside the collateral and website updates, group contracts should reflect changes and past repeat groups should be informed of new policies in order to reset expectations to this “new normal”. Contracts should be reviewed for new cancellation terms, deposit clauses revised and provided flexibility for health-related issues and/ or government ordered shut-downs.
Since you may not have all your “experts” on staff, you will need to ensure that your group seller knows how to maneuver within the wholesale market, for example, that your Leisure sales manager understands how to submit RFP’s and counter-proposals for business travel(not all do and yes, the business travel RFP season is about to begin), and that if you only have group sellers for example, that they are able to and understand the marketing machine, as not all may have grown up in the industry having experience in all of these segments, not to mention handling wedding blocks, which require a different style altogether.
While we are on the topic of weddings, those larger wedding blocks are not something you want to miss out on when being booked since these are typically booked six to 12 months in advance. In short, just because you have someone in sales does not mean that they are the best fit for a particular market segment, so a lot of training and a lot of patience will be necessary.
In addition, due to the forecasted “W-style” recovery may further prevent from re-hiring, so white-label and remote sales options, saving payroll taxes and benefits may be a good consideration as there will be a higher value for the dollar. Hiring a task force style team by days, hours or on a per client basis will keep hotels top of mind from the customer standpoint, will allow continued focus on relationships vs. selling now, so that they are part of the shopping list when there is the appetite for travel again.
Additionally, it allows for the opportunity to scale services and costs as revenues begin to grow and not a moment before. It is also very likely that properties will be receiving a higher number of direct phone calls from guests asking about specific cleanliness and hotel operation specifics, particularly those that book via OTA’s and/or other third parties, therefore, the need for team member staffing for guest service will increase and options to reduce costs for those positions should also be considered.
Another possibility as it relates to group business is that a lot of the programs are likely to include some type of hybrid virtual vs. in person aspect. Many meeting planning organizations and industry associations including MPI have already started conducting surveys trying to understand just how much this trend will affect the comeback of the meetings industry. Virtual meetings will never replace in person events, however, hybrid options may become more common in the near future as stability returns to the market.
In addition, a lot of event planners that historically organized only in-person programs are now diving into the virtual world, so many hotel sellers will need to provide assistance to these partners as they too learn to navigate in these new seas.
Changes to Online Marketing
As it relates to social media, special care should be paid to optimize social and digital media presence to surpass those of your comp set. Now is the time to grow social media numbers, refine strategy and hone your target audience in order to optimize. It is all about the share of voice and market share game now- grab a larger piece of a smaller pie in the post-covid world. Guests should also be invited to communicate feed-back on what they feel is important and create greater engagement and brand affinity.
Content will be key. No long messages from the CEO, simple edible pieces of content that inform, educate and create awareness of your new normal policies.
New Hotel Design Trends
Stakeholders should also engage their partners in Architecture, Interior Design and the related design professions who can convert hotel spaces to this new reality. By trade, design professionals find future formulas that provide timely, innovative and successful solutions and these should be considered.
Start the welcome experience pre arrival. How to re-image your brand with refreshing touches to touch the guests’ heart? With the help of the VR and AR technology and of course complimentary to the complete package of safety measures, visually showcasing newly programmed spaces and amenities will be far more convincing. A well-produced video clip on the lobby and how it has been transformed, for example, could be the first “hello” before guests even start their journey.
And how do you create a new arrival experience without a physical touch? While online check-in and digital key access provide minimum personal interaction, it also leaves the Front Desk, Lounge and bar areas barren and lacking personality. Sense of community and our innate need for personal connection must be incorporated. The sense of belonging may need to be translated more in terms of providing different options: some may be open minded to accept the less crowded gathering amenities such as a bar or cafe, others may want to hide away from the crowd in a pocket space feeling more protected.
Bringing natural elements such as water and landscape with real materials plus digital media may enhance the arrival experience presence and may provide the necessary social distancing requirements, make guests feel more at ease and offer a more fiscally acceptable solution. With technology such as UV-ray scanning and motion sensors becoming even more important, it still necessary to provide positive and personal guest experiences that convey relaxation, rather than making guests feel like they are becoming part of clinical experiment.
The Guest Experience
Further, there are many ways to transform the existing guestroom experience while still achieving a sense of safety and comfort. Virtual digital assistants such as Amazon’s “Alexa” have become second nature. By reaching out to even 20% of the existing loyal hotel guests to deeply understand their personal preferences to understand expectations, some features can be pre-programed into a digital guest profile and be connected to the guest’s cellphone or other digital devices such as I-pads or Apple-watches upon check-in.
We all know that nature is a great source of therapy; for minimal cost, hotels can use warm natural materials, bring natural sound, color and smells that enhance the freshness of an existing space and create a sense of wellbeing.
And while we are on the topic of wellbeing, perhaps you want to consider including a “telehealth” component into your existing resort or facility fee, if you are even charging such a fee. Hotels with Resort or Guest Amenity Fees may want to remove these fees temporarily as many of the amenities will be limited in capacity (Beach, pool, gym, exercise classes). Nickel and diming guests to death with fees may draw more negative attention than ever. There will be many opportunities to tweak pricing and there are countless ways that properties can utilize the systems and tools already in use to provide added value to potential guests; re-think everything.
Last but not least, working from home has become a new normal. Twitter has announced that it will no longer hold office space, as have many other companies, and many have realized during the pandemic lock downs that it is possible to work remotely. Perhaps prior to re-hiring your former teams, the opportunity to hire remote partners in less expensive geo markets should be considered. Remote access to different talent pools may enable for remote contractors and/or employees at a lower cost.
Additionally, a lot of companies are planning on working in shifts and/or only certain days of the week but most are not bringing staff all back all at once, so perhaps staffing and sales deployment should consider some of these trends according to assigned market segments. A more robust IT support model and overall flexibility for schedules and needs will be key. It is indeed a new era for all things Sales & Marketing in the hospitality industry.
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