Author: Rafael Gómez / 5 minutes read.
As far as international borders and flights are open, we face the possibility to reopen hotels and being able to walk towards the new reality. Although we have several scenarios, at least until summer 2021, tourism is not expected to recover entirely.
There are additional economic factors slowing down the possibility that, after the arrival of a vaccine, tourism worldwide will return to its starting point.
On the other hand, hotel investments must be sustained, and therefore, after recurring questions about how to deal with the reopening of the hotels, from RevenueResort.com we mention the 10 key factors to deal with the openings:
- Safety and hygiene protocols: Update the protocols applied in the establishment if necessary after opening according to the additional suggestions received. We are not going to mention the well-known measures to be applied by hotels, however we do want to focus on the agility to adapt these protocols once the hotel is open, in order to ensure social distancing and hygienic measures. One thing is the hotel strategy regarding social distancing and safety and security protocols without clients, and a different one the real operation once the hotel is open.
- Updating the web page: It is crucial to inform the measures in place on the web site and also inform about the services that are not available due to the impossibility of maintaining social distance, all considering the security factor for the client. Online reviews are more important than ever, since a bad comment on security measures will surely affect future reservations. Nobody at this time would go to a hotel that has negative comments in this regard. This aspect is now the most important decision factor for the customer. Share proactively the measures also to all distribution channels to show what you are doing. It is possible that, without realizing it, the Hotel’s website continues to show images of traditional buffet with tables closed to each other. This is a recurring issue when looking at web page content that are not usually taken this into consideration. If images have not been changed for a long time, it is time to update them showing the new protocols. These factor not always considered in hotels, are very important and creates trust to our clients.
- Change the sale parameters: Making the cancellation conditions more flexible will increase reservations. Allow changes to the reservations, offer vouchers and flexible conditions, this will make customers not afraid to book. However, be aware of possible increase of cancellations because there are clients who book multiple dates due to this flexibility. Monitoring cancellations has always been a good practice to establish a correct overbooking strategy. Although now it will not be for this reason, it will be for forecast estimations to mitigate the cost impact for hotel operation.
- Think about the direct channel: Although the impulse could be to sign contracts with redistributors who could cannibalize the direct segment, do not lose all the work done. Regarding customer behavior, nothing has changed, if a client finds a lower price in a metasearch, will not hesitate to book it, and the hotel will pay the bill (commission or net price). Use all tools to increase your direct sale, google recently developed very interesting products that may help you.
- Analyze the general hotel strategy by department: It is time to rethink and change some of the hotel strategies to generate additional revenue opportunities. Each hotel department must be studied in an analytical and critical way to make the necessary changes in order to increase revenues (upselling actions, cross selling, loyalty program…), or actions looking to reduce costs (processes simplification, regrouping operational task, administration efficiency…). Economically speaking, the GOP growth always comes from increasing revenues or reducing costs.
- Look at your competitors: The market reacts naturally, or, in another way, “you cannot stop the rain from falling”. At a time when supply far exceeds demand, as per current situation, there are always hotels that think that a drastic drop in price helps them recovering earlier in the market. In reality, there are studies mentioning that once the market is stabilized, the long-term price recovery is more difficult for the hotels that reduced more the price. This is a clear example of “bread for today, hunger for tomorrow”. There is no choice for discounting, this is clear, however, tactical discounting could be done for certain segments or market niches that do not penalize the hotel’s general pricing
- Long Term thinking: By default, there is a tendency to look at the low occupancy during the first weeks after opening and adjust costs to the maximum in the short term not to impact the GOP. When we often talk about global vision at Revenue Resort, we do so considering factors that are not easily measurable, however they do impact the results in the medium and long term. An example, before the reopening of the hotel, many Reservation department resources are very limited to handle the volume of reservation changes, cancellations, new requests, prepaid arrangements, etc. This situation delays the response to the client, and consequently, property loss future reservations caused by a lack of proper resources. Well, these losses of future bookings due to lack of resources are not reflected in any report, as current staff expenses do. From experience, we can say that focusing on the long term by reinforcing short-term resources, will make the hotel stronger to face the business recovery. Therefore, reducing staff, such as F&B (food and beverages) and not being able to provide an adequate service due to the new measures that must be implemented as a replacement of the traditional buffet, can leave a bad image and make the client not to choose the hotel in the future. It is also worth mentioning, a fact that is not in any future report, which is the impact of possible compensations for poor service. It could happen, and it must be analyzed, if the value of the compensations exceeds the cost of additional staff to provide the service efficiently avoiding complaints. In summary, thinking about all the variables that are not reflected in reports is a fundamental strategy analysis to ensure a successful long term. In other words, “Let’s work for the present to guarantee the future!”
- Check-in: Empathy is another factor highly valued in tourism that is sometimes not considered. It is crucial to put ourselves in the shoes of our clients to know what they think and what are their expectations are when staying in a hotel. One of their main concerns is social distancing and security during the registration process. For this purpose, facilitating a check-in before arrival, ideally digitally, will create more security for customers. Large hotel companies have online check-in, including keyless systems to open the door with the mobile device, without requiring a key. At Revenue Resort we talk about “blue thinking” or “open mind” to be innovative within the available resources. For hotels not having this technology, a “pre-stay message” template could be used requesting customers’ data and take the opportunity to ask key factors such as arrival time to make sure everything is ready upon arrival. In addition, we can also take advantage of “upselling” strategy to offer a higher category at a lower price to increase last minute hotel revenue.
- Create loyalty: It seems that talking about the emotional side in tourism is over, but the truth is that many hotels continue to look at their customers thinking in their contribution to the financial results. It is true that we are looking carefully the GOP to be able to obtain a correct EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), based on budget. Well, in addition to this, which is true, we must create loyalty with our clients, make them feel special by offering a unique emotional experience. The emotional part when interacting with guests is crucial. I always mention that facilities available cannot change from one day to another, however, the human touch must be exquisite, and will create loyalty to our guests, making the difference in comparison to our competitors. This will undoubtedly create loyalty and will guarantee the future.
- Let’s be positive: Last but not least important, in regards to the demand inelasticity in tourism. We need to have holidays, and although we cannot say that it is a basic need, the vast majority of surveys certify that we need to travel and we will do it as soon as we can. It is also true that the economic impact produced by this pandemic will slow down the return to recover 2019 figures, however we will shine again, and soon. Positivism helps motivation, something very important that we all need after the strong impact of seeing our hotels closed, something that has never happened in recent world history.