We are all in uncharted water and with an unclear timeline on when our industry will get back to anything near normal. But, when it does, return – and it will – we want to be prepared.
Being prepared for the future is on most hoteliers minds and is the main theme of the latest Mews webinar, “Hospitality and the Coronavirus: Accommodating the unpredictable”, which really got us thinking. A panel of speakers, including Thibault Catala, James Lemon, Kevin McCarthy, Philip Niemann and Kevin Machefert, answered some of our industry’s most pressing questions, from “What are we all doing as hospitality professionals during lockdowns?” to “How do we get ready for what we hope will be the coming boom in our industry?”
Understanding where we are
Kevin Machefert, director of sales, marketing and technology at the Machefert Group speaks about trying to put this into phases, which he outlines as follows:
- The Crisis Management Phase – Taking care of customers (making sure guests’ get home, etc.), employees and shutting down the hotel ensuring they are secure while they are closed
- Idle Optimisation - Optimising every revenue stream you can, getting help from the banks, managing cash flow, remodelling your 2020 business plan
- Getting back to business - How can you make an opportunity out of this crisis, optimising your strengths and anticipation of recovery
If you would like to hear what Kevin has to say about each of these phases in more detail, you can still access the webinar recording here. Many experts agree, though, that the industry is currently finalising phase 2 and starting to think about phase 3. However, figuring out how and where to get started while still in uncharted waters can be a bit daunting.
With this in mind, we had a chat with Charli Maggs, revenue and reservation manager at Cirrus Inns, to find out what her outlook on the current situation is.
Charli is not optimistic about business travel, saying “I think the corporate market will decrease as people close down their offices and have more staff working from home.” Gavin Came, proprietor of the Historic Pig and Whistle Inn and former marketing executive of a large listed company agrees, “During this international Covid-19 crisis, domestic and international corporate travel will reduce dramatically as businesses take their staff out of harm's way, comply with lockdown legislation and preserve their shrinking bottom lines.
“As the effects of the virus dissipate, two trends will emerge. Some companies will find that their need for face-to-face meetings (and the travel costs associated) was never justified and will permanently move to online interaction. Others will realise how important team building and interaction in their businesses is, and will review their incentive and celebratory functions travel budgets accordingly.”
However, Charli is cautiously predicting a fairly quick recovery for the leisure and visiting friends and relatives (VFR) market, telling us: “Looking at our bookings and enquiries now, I think that September and October could be really busy months, as we will have more people wanting to go away, plus there are a number of people who have moved their bookings and weddings to this time.”
The recovery may even come with something of a boom later on, “I think there will be more business on the books next year further out, due to the weddings that have moved from this year to next, and this is an important thing to remember when looking at pace etc. to be able to forecast.”
"All hoteliers, whether at a chain or an independent, now need to decide ‘What do you want to get done during this downturn?’ because a lot of people will be talking about a fast recovery, but what does that really mean, is it going to come, and frankly, will we have done what we wanted to do by the time it comes."
– James Lemon, CEO, The Growth Works
Although it can be tempting to try to coax any business you can through the doors at any cost, Charli cautions against reducing room rates at this time, “I think it is important that everyone remembers to not drop their rates. Dropping rates doesn’t cause demand, and sometimes that is easy to forget. Undercutting a competitor is fine, but there is no point dropping rates for the sake of it and it will then take time to grow the ARR back up again as guests will see you at that price point and returning guests won’t want to pay more.”
This means that marketing during the down time should not be neglected, as many leisure travellers stuck in lockdown will likely be browsing the web dreaming of the travelling they will do as soon as they are allowed to. “I think this is a key time to still market your product so you are at the front of everyone’s mind when everyone can go away again”, says Charli. “Also don’t close off your reservations, let people still book now for the summer months and if we have to cancel them, we have to cancel them, but there shouldn’t be any hurdles along the way.”
In general, the outlook is one of tempered optimism, and James Lemon, CEO of The Growth Works, suggests that hoteliers don’t lose focus: “All hoteliers, whether at a chain or an independent, now need to decide ‘What do you want to get done during this downturn?’ because a lot of people will be talking about a fast recovery, but what does that really mean, is it going to come, and frankly, will we have done what we wanted to do by the time it comes. What’s going to make sure that we’re not in panic mode again when markets start to recover?”.
Make the most of market segmentation
“This is a good opportunity to look at your market segmentation split”, says Philip Niemann, group vice president for APAC at Duetto. Making sure that you have prepared marketing and specials during this downtime for your different market segments can be a great way to ensure you hit the ground running. We don’t know which segment will recover fastest, so it could be best to prepare for them all and make the most of what you can.
“You might not have a full-fledged RMS or a CRM, but you’ll have a PMS and you would have collected data and information on your customers. What I would do is pull all this information, and the first thing I would do is look at the markets [...] that are big visitors in your area or for your properties, and I would look at marketing to those.”
– Philip Niemann, group vice president APAC, Duetto
Questions to ask yourself:
- Which market segments were the biggest you catered for before the crisis started?
- Will there be an opportunity to cater to different segments at different times after this is over?
- Will staycations be something that you will see more of as people look for a change of scenery?
- Can you utilise the different aspects of your property like restaurants and spas to get quick wins, for example with vouchers that can be redeemed later? (As mothers working from home during lockdown, you can be sure we will both be looking forward to a spa day and a few glasses of wine as soon as we’re allowed out!)
Finding the necessary data will be easier for some hoteliers than others, depending on what technology you’ve had in place, but all hospitality professionals should be able to do this to some extent. “You might not have a full-fledged RMS [revenue management system] or a CRM [Customer relationship management system], but you’ll have a PMS and you would have collected data and information on your customers,” says Phillip. “What I would do is pull all this information, and the first thing I would do is look at the markets [...] that are big visitors in your area or for your properties, and I would look at marketing to those.”
As this is an area of particular expertise for a CRM company, we asked Nigel Allport, chief commercial officer at For-Sight, to take a look at the webinar and gives us his perspective.
“Hoteliers planning for life after coronavirus will be required to be prepared, be agile and to be strategists,” Nigel asserts. “Being prepared will ensure that you are ahead of your competitors and ready to react as soon as the government loosens its ‘stay at home’ guidance and consumer confidence begins to return. Being agile is needed because the timing of the recovery is unknown and your traditional markets might need to change, at least in the short term – we all know that corporate travel will be that last market segment to come back!
“Formulating a strategy for the inevitable ‘bounce-back’ will be key to future success. Leveraging your guest data and understanding your market segments will underpin your recovery strategy and the key will be the ability to identify past guests residing in close proximity to your hotel as this will be the market segment that returns first.”
“Hoteliers planning for life after coronavirus will be required to be prepared, be agile and to be strategists”
– Nigel Allport, chief commercial officer at For-Sight
Kevin agrees that now is the time to invest in your relationship with the immediate area, and his “Sauve ton hôtel” initiative in Paris is based on this. “The idea is to really rely on your neighbours, and get them to understand that your hotel is just like any other business in your area, and it’s actually the first door to your neighbourhood or your city – and it’s promoting your city […] hotels are extremely important for tourist-oriented cities.” Philip also feels that marketing closer to home is a wise early move, “when things start returning to this new normal that's currently taking place, those closer geographic sources of business [...] are probably the ones who are going to travel first.”
Nigel’s key piece of advice? “For those hoteliers operating a CRM – use it like never before! Identifying past guests’ individual interests as well as their historic spending patterns will give you a head-start and help ensure you re-enter the marketplace with clear competitive advantage.”
You could look at creating different landing pages for different market segments, suggests Matthijs Welle, CEO of Mews. This way you won’t need to change your website too much, but will still be able to provide the right information to the right types of guests. Alternatively you could reach potential guests on their preferred social media channels – as Kevin says, “everyone’s attention right now is on their phones”.
Bury the hatchet with OTAs
It may be worth putting past grievances with online travel agents (OTAs) aside in the current climate, as the OTAs’ enviable marketing resources mean that these will probably be the first websites the world population will use when they start planning trips and places to visit – you will need your shop window to shine. If your OTA listings are sub-par and you’re not driving direct bookings, then the possibility of a longer recovery time is quite likely.
Thibault Catala, managing director at Catala Consulting’s recommendation was “I believe we should play by the rules and play as a partner with the OTA, but we still need to control them carefully, to use them but control them where we want, not the way they want.”
Go through your OTA listings and check the following:
- Are the images up to date and do they show off the aspects of your property that your guests love?
- Are your property descriptions detailed, accurate, up-to-date and engaging?
- Have you introduced or updated any amenities that could be included on your listing?
- Have you added videos wherever possible?
“Booking.com will also come back fighting for market share when there’s an uptake here so I wouldn’t suggest to any hotel that they try and switch off or neglect that channel”, says James. “When demand comes back a lot of consumers will be shopping for value, they will be trying to have a look at the market in particular locations, they may even be fairly flexible on what location they go to.”
Look at how you increase and drive direct bookings in the future
Take time now to look at your guests’ journey and the touchpoints you have with them – from your search presence to your OTA listings (mentioned above) to your website to your post-stay communications. Where can you improve this communication or what can you do to personalise it?
At GuestRevu, we know it’s good practice to send a “Thank you” email once a guest has responded to the hotel’s guest feedback questionnaire. A lot of the hoteliers we work with use this email as an opportunity to link their guests back to their website. Some even have a code for guests to use to receive a discount or free perk on their next stay, which helps foster customer loyalty and drive repeat bookings.
Look at it like this: If you get a guest booking a repeat stay via an OTA, you could be paying as much as 18% in commission. Instead, why not offer repeat guests a complimentary room upgrade when they book direct – the guest is happy and walks away thinking they got a great deal, and you walk away still having made nearly 22% more on that booking.
Portmeirion Village saw an 8% increase in direct books within three months of implementing this strategy. “We can see that our special offer clicks on TripAdvisor have increased by 98% and our Direct Referral Clicks have increased by 8%” explains Gareth Jones, online sales manager at Portmeirion Hotel.
Review and upgrade your tech stack
A silver lining to the complete drought of business is that you now have a perfect opportunity to examine your current tech stack, learn more about the products you're already using and have a look at new solutions and get them implemented.
As James pointed out:
“I would urge any hotel team right now to be thinking: 1. What do we want to get done, and 2. Who is going to help us? Because I think getting time with people who you probably wouldn’t have thought of picking up the phone to before – whether that be revenue management experts, whether that be a technology business, whether that be, you know, a management consultant who you’ve kind of been putting on hold – guaranteed, your team won’t have all the answers. And that’s why I think now more than ever, make it your goal to chat to one new person each week from a new technology business or a new area of the guest journey or pick up your phone to someone from one of your distributors you’ve not spoken to [for a while]. And so it’s really about picking the right partners to go on that journey with you. Who are the partners that are going to be running tech as you come into the upturn?”
Has this crisis made you wish you had cloud-based solutions that can be accessed from your home or anywhere? If you have the capital, now is undoubtedly a perfect time to implement a new system.
“What I'm seeing with some of my clients that I'm working with right now is definitely an approach of ‘stay positive and let’s crack on’” as Kevin McCarthy, principle consultant at McCarthy Consultancy B.V told the webinar viewers. “I have one client in particular that sees this as the best time possible to do a system shift. We're working on the project plans to actually just tear out a huge system for a lot of hotels. They have unprecedented access to all these staff, people that would potentially be laid off, experts from hotel level that they can now actually bring into HQ and start building up a system in half the time that you would if you were in normal circumstances.”
Where do you start to even compare the abundance of online hospitality tech? As always, online reviews provide a great indication of client satisfaction, so check out Hotel Tech Report – they have all the information you need to compare what you have with what you want.
Should we really be planning for a rebound?
As we can all only guess when the market will recover, it’s imperative that you are prepared. When the rebound happens you want to be positioned to make the most of it and start to drive revenue.
Kevin suspects that for many hoteliers, it’s going to be like relaunching your property, and advises the industry to ensure they “have a bit of working capital left for this period of time – which will probably last between June and September – in order to launch again, because it will almost be like launching a business again.”
Launching or re-launching a business isn’t cheap, and any capital you can retain will need to be used in multiple areas. As Kevin points out, “think of your new marketing, new sales strategy and when you have to start paying rent again, paying taxes again and obviously when you have to pay your different loans again whether it’s interest only.”
The message all around is be prepared, be ready and keep looking ahead. Your marketing teams can be creative with new ideas that make you stand out from the competition. There are a lot of consultants that are offering their time for free, to talk through problems and solutions; more and more webinars to watch and learn from (all of the ones that we have watched have a positive outlook towards a boom in the future); and plenty of downloads and ebooks being made available to the industry. If only someone would offer the use of a crystal ball that would take out the guesswork!
If anyone wants to chat through anything related to guest feedback or online reviews, let us know as we are also here to assist and offer insights so that when the upturn comes you can make the most of it.