How Hotels Can Adjust Their Strategy to Get through a Crisis

The hotel industry is often exposed to a number of inevitable crises. It’s important to appropriately handle critical situations, like the current coronavirus crisis, to prevent damage to business and catch up after the crisis ends.

McKinsey, in its report, COVID-19: Implications for business, predicts, “Some sectors, like aviation, tourism, and hospitality, will see lost demand.” And, this forecast comes as no surprise, given the present-day global travel restrictions and the overall sentiment in the market.

Even though the hotel industry seems to be heading for a standstill right now, there are some strategies that can help you optimally minimize the commercial impact of the coronavirus crisis. We, at trivago Business Blog, will help you keep up with those strategies, based on the predictions and insights from crisis communication and hospitality experts around the world.

To start with, we bring to you the most basic aspects of hotel marketing and management you should take into consideration at the moment. Read on and also, keep checking this space to find out more useful content around this topic.

Rethink Modification and Cancellation Policies

Nations around the world are trying to contain the spread of coronavirus, due to which several travel restrictions and bans have been introduced globally. As social distancing is one of the best practices to stop the spread of infection, travelers are canceling their trips, both domestic and international.

With travel plans being bumped all over the world, you need to rethink your booking policies. This is the time when you can build positive customer relationships and ensure guest loyalty so that your guests choose you when things return to normal.

Give your guests options to modify their bookings by offering them vouchers for flexible travel dates. If certain guests don’t feel comfortable with future travel commitments, provide them with full refunds. To get some ideas on how to work around your booking policies, read this article from Business Insider that lists current hotel policies at the time of the coronavirus crisis.

Strengthen guest relationships

In light of the worldwide coronavirus outbreak, travelers around the world are confused about their travel plans. While most of them are canceling their plans and waiting to get refunds or vouchers, many are contemplating going and are worried about their safety.

If your destination has already started seeing the impact of coronavirus, chances are you might not be expecting guests anymore. In this case, follow our above-mentioned tips on how to adjust your booking policies to delight guests and prompt them to book a future stay with you. It’s important to inform your guests via email or social media of any changes in your policies. You can also ensure seamless guest communication during this time, via a Property Management System, to boost engagement.

On the other hand, if your hotel is at a location that is minimally impacted, you should still communicate with your current and future guests. Inform them of any changes in your booking policies, and your safety and prevention plan. Share brochures or send out emails to inform them of the virus situation at your destination and provide tips for their upcoming stay. This will put your guests’ minds at ease.

Reduce the risk of coronavirus to employees

As a hotelier, you must ensure the wellbeing of your employees, especially the ones who are actively working for you amid the crisis.

First and foremost, share the official advice within your region on prevention and safety from COVID-19 with your employees. Additionally, acquaint yourself with basic protective measures against the new coronavirus recommended by WHO and make sure that you support your employees with the same. For example, the WHO recommends everyone to wash their hands frequently. In this case, make available facilities for regular and thorough handwashing.

At this unusual time of crisis, also make sure that you reconsider your sick leave policies. Make them as flexible and consistent with public health guidance as possible. Also, make sure that your employees, especially everyone in management, are aware of these policies.

Manage your room rates

Hotels usually slash room rates when occupancy drops in order to spur demand and achieve maximum occupancy. It’s natural for you to consider this tactic this time as well. But be aware that price isn’t a factor why you have low or no reservations during the coronavirus crisis. So, avoid the knee-jerk reaction of lowering room rates right now as people aren’t simply traveling.

Instead, keep rates at a normal level so that it’s easy for you to resume business when the market bounces back. In the meantime, study your market, look for signs of recovery, know your segments, and be ready to market your property to them when the time’s right.

Adjust your costs

At the time of crisis, hoteliers have to reassess various hotel costs, including marketing, payroll, and fixed costs. It’s essential to develop a comprehensive plan to address the issue of cancellations or modifications, low reservations, and distribution channels.

To start with, don’t stop marketing altogether but rather, curb your marketing spend. As mentioned above, study your market and segments, and plan your marketing for the right time. When it comes to distribution channels and costs, rethink your whole strategy. Phocuswire reveals that being accurately showcased on as many booking channels as possible, with as much information as possible is crucial for hotels’ future success and fight for survival. This means having full control of the distribution network, being more visible online, and hitting the right balance between indirect and direct distribution channels.

Governments around the world are planning to help national and regional economies sustain by delivering support for business investment and cash flow assistance for employers. Make yourself familiar with such schemes in your region or country so that you can take advantage of any subsidies on payroll costs and fixed costs, like property tax.

Your plan to adjust your costs should also include collaborating with your suppliers after assessing your needs and demand for a particular item or service, like housekeeping personnel, food, and cleaning materials.

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Please note that every property is different in terms of its size, location, and impact of the crisis. Thus, we recommend closely monitoring the latest developments before making any drastic change(s) to your business.

Featured image: Geralt on Pixabay