The COVID-19 pandemic is The Black Swan that we stubbornly denied could exist, catching us all flat-footed, now trying to manage a crisis that could not be predicted beforehand, and no business plan was prepared to deal with. Hoteliers, understandably so, have been forced to analyze expenses and make drastic cuts to sustain at least the necessary foundation of a business worth saving. However, while we were all caught flat-footed with the coronavirus, we need to accomplish everything in our control not to be victims again, this time from our ill preparation of the inevitable rebound.
In the first place, we need to understand that the market will not be the same this year because our customers will not be the same. They have changed. It is not that they will not want to travel, take a vacation or stay at your hotel… they will want to… but they will be afraid. We need to understand this and be conscious of their fears; otherwise, we will be unable to understand how our product and services should be adapted. “The coronavirus event has caused disruption and uncertainty and is also changing short and long-term demand expectations,” said Apostolos Ampountolas, an assistant professor of finance and revenue management at Boston University’s School of Hospitality Administration. We can expect demand will return, however, to a new normal, and he added, “the industry can be prepared for, by forming risk assessments and building robust expectations on different demand phases.”
In our communications (website, social media, ads), we need to think about how to best address their fears of what the new “reality” will look like in the next 2-3 months, as well as 2-3 quarters. “There is no doubt that industry professionals around the world will have to reevaluate their marketing or pricing strategies during the coming months,” said professor Ampountolas. As long as the current situation is fluid and uncertain, you cannot urge customers to commit to a booking fully. Preferably, communicate flexible reservation and cancellation policies, concentrating on “limited time” offers for bookings made now, with 100% no-strings-attached refunds, even for peak-season and traditionally black-out dates (until that time of course, when yourselves start to believe that there indeed will be a peak-season). You can, in addition, not require full prepayment, instead only collect a nominal deposit (in the order of $50-$100 depending on the booking), thus ensuring the guests do not book recklessly while at the same time offering them the security of a lower risk. Lastly, you could offer hotel bonds (purchase a bond now, which matures in 60-90 days at a 50% premium), either creating your own or joining the leading “Buy now, stay later” program created by Lion & Lamb Communications. This provides a significant incentive to your guests, and it minimizes their risks as the bond does not have to be pre-assigned to a specific date/booking, and most importantly, it allows you to bring in “guaranteed” revenue now.
Guests will, of course, be afraid to book as they won’t know what the exact situation is like in your area. Share with them as much information and as frequently as possible, such as local health resources, restrictive measures in place, etc. Guests will be nervous about booking because they will not know what to do in the case that they are exposed to the virus. According to market research consultancy Magid, only 42% of consumers trust hotels to take the necessary steps to ensure their health and safety.
Describe in detail the necessary precautionary measures your hotel is undergoing, such as using alternating floors (booking even-numbered floors and leaving odd-numbered floors empty), alternating rooms (every other room is assigned unoccupied.), booking buffers (leaving rooms unoccupied for 48-72 hours between bookings), reprogramming elevators to allow for a single party, single stop rides, and any other procedures and/or products that will place them at ease. Accordingly, let your customers know about all the new strict hygiene measures you are implementing with regards to food preparation and delivery to build trust further.
Most importantly, let them know how you will support them in the event that they need help. This trust will overcome their fear… and the booking will follow.
Based on the most recent report from STR, the U.S. industry continuously reported negative YOY results. Both segments, mainly the group business and secondary the transient segment, will continue to experience a significant decline. However, professor Ampountolas “foresee the transient segment will return fairly quickly, but for groups, it will take a long time after the threat has passed.”
For those guests that have stayed with you in the past, you already have the essential foundation of trust which you should capitalize on. This should be the first audience you target, as persuading them to book, will, in turn, bring in their friends and contacts. Hopefully, you have their email address, and if not, make sure you look into tools like Zoottle that help you capture the email address of 95% of your guests. Build custom audiences on Facebook, Instagram, and Google ads by targeting the corresponding messages to focus only on your customers from previous years. Build a landing page with updates you want to make for COVID-19. If you have a blog, you can simply make a #covid19 tag and use the link from your blog’s tag to the newsletters – Facebook – Instagram, etc. This year you need as much as ever your partners who are engaged in communication, and work together to see how you can communicate, correctly configure the right messages, make a 360-marketing plan both online and offline and make the most of the marketing budget available to make a difference.
Finally, once they are on the property, you need to focus on two things. The first is to use tools, processes and the trust you have earned to increase your ancillary revenue and maximize TRevPAR (They trusted you enough to stay with you, it should be a no-brainer to get them to spend money at your restaurant, spa, etc instead of going somewhere that does not have their trust). The second, and quite frankly the most important….now that you have their trust, do everything in your power to keep it because in this post COVID-19 era, we will no longer sell rooms and services, but instead will be selling TRUST.
Keep safe & keep planning.