3 Strategies to Plan Your Hotel’s Post-COVID Recovery
If you own or run a hotel, it is time to prepare for a changed world. When the go-ahead to re-open borders are given, hoteliers will have to be prepared to quickly get back to business. While a lot of businesses are struggling to remain open, some are focusing on ways to maximise the time available during the lockdowns.
Once the demand starts to improve, these businesses will have a strong head start and be better prepared to receive guests with proper planning in place. Understanding customer behaviour, adopting safe and healthy practices, and focusing on implementing clear-cut strategies will be key to turning things back in your favour.
- Have the right protocols in place for guest and staff health & safety:
Post Covid, hoteliers will have to increasingly focus on the health and safety of guests and staff members.
The most important step is to check government guidelines about reopening businesses in your region. Be ready with a plan to prevent spread of Covid-19 and communicate critical information to guests and staff in timely manner.
You may be keen to reduce points of contact with your guests, but people entering your property will still need to be informed on how you care about their health and safety. All in-house guests need to be informed – at the point of check-in and during the stay – about several measures adopted, procedures followed, and strategies implemented to keep everyone safe.
Guest health and safety protocols should be displayed in all guestrooms and public areas. Solutions like Tapendium’s Digital Concierge double up as in room guest communication devices as well as digital media signs around your hotel property. This solution allows you to customize and display up-to-date health and safety information across your property from one central tool.
- Review your financial plans & adjust your approach:
According to CBRE research, it has been predicted that the hotel demand will take about 6-10 months to recover since the beginning of the outbreak in January 2020. It will take further 12-16 months for RevPAR and ADR to recover. As such, every plan is out of the window and hoteliers are looking at their financial plans afresh. With new strategies, plans, and actions, you need to factor in the changing times and consumer behaviour.
It is a good time to check on how your local government is trying to help. The Australian Government, for example, is providing an instant asset write-off for businesses of up to $150,000 for assets purchased between 12 March and 31 December 2020.
The most important step is to come up with an accurate revenue forecast for the coming months. What’s the estimated downfall? -20%? -40%? -60%? It will allow you to set realistic expectations. Depending on estimates, you’ll be able to review and reduce non-essential spending and reduce operating costs.
Hence, now is the right time to optimize your expenses where possible. This is the right time to make the move to automation. From front office to in-room guest experience management tools, get ready to evolve and reinvent your approach. Tools like Tapendium’s digital concierge and in-room guest experience management solution allow hotels to streamline operating costs, reduce staff contact, maximise guest experience and grow in-room F&B revenue multifold.
- Streamline your Revenue Management
While ensuring the health and safety of your guests is important, you also need to make some rational decisions to maintain and grow your revenue. A few pointers that other hotels are adopting during these tough times are:
a. Don’t Go Too Low with Room Rates: While it’s the right time to offer discounts and promotions, you shouldn’t go too low; think about your hotel positioning and make sure you don’t damage your brand. People will choose their hotels based on other factors than rooms being at the lowest prices. Try to highlight your increased focus on guest health & safety, or offer value-added packages which obscure your rates with add-ons and extras like including a ‘Free Breakfast’.
b. Improve Your Pricing Management: For the next few months, you’ll have to monitor and optimize performance on a regular basis, more frequently than ever. In order to survive, you need to create the right promotions at the right time and distribute them via appropriate channels.
c. Update Your Distribution: While most OTAs have leveraged ‘force majeure’ clauses at the start of the crisis, some have been respecting hotel policies. Going forward, it’s better to have guest-friendly and flexible cancellation policies to foster loyalty and encourage bookings. Now more than ever it’s clear that you should invest more in building direct channels. Build a pipeline of new guests, and reach out to regular guests directly with offers like ‘Advanced Purchase’ discounts.
d. Update Cancellations Policies: Post Covid, flexible policies will be the new ‘normal’ and guests will ask for more transparent and flexible cancellation policies. In order to maintain your Cash Flow, you can create different products to cater for different customers – i) Advance Purchase – Pay now, 10-20% discount, with a fully flexible modification policy or ii) Book now / pay later, and cancel up to 1 day before arrival. Make sure you encourage a change of dates rather than full cancellation of the stay.
Stay active, stay healthy and stay connected, and hope 2021 sees the hotel industry bounce back sooner than anticipated.