The coronavirus pandemic has hit hotels, and the travel industry at large, more than any single event in over a decade. As hotels adapt, prioritise and plan for the short and longer term, we talk to Upgrade Pack's Head of Hotel Partners & Integrations, June Tang about post Covid-19 strategies they can embrace now to be ready for recovery, and be more resilient in future.
What are your thoughts on how hotels can navigate strategies around the Coronavirus outbreak?
Hotels obviously have no control over the external situation or the recovery timeline, but they can control how they approach things in terms of their readiness for the recovery.
Crisis response plans will give important process-led guidance, but there is no blueprint response for something as unprecedented as this. As such, hotels will be updating their playbooks, and logging lessons being learned for the future, while prioritising what steps to implement to safeguard their position, now and longer term.
There’s a wealth of views out there on how hotels can use a time of grounded operations to emerge as strong as possible. These range from bringing forward refurbishment plans to looking at ways to increase automation to increase ‘efficiency’ in a post-Covid world, and from keeping up with marketing activities through to identifying new sources of revenue – such as takeaway meals and 14-day self-quarantine packages.
But with any return to ‘normal’ travel patterns some way off, revenue creation must be front and centre – with a focus on acting now for the longer term in line with an undoubtedly phased uptick in international travel.
What about future rating strategies?
From a revenue management perspective, hotels need to consider what is best for their business in the long-term, and ready themselves for the second half of 2020 when the crisis will hopefully have passed.
Seasonal and resort hotels understand better than anyone that you can drive bookings during low season to fill your rooms up for the season ahead. Furthermore, many travellers still have the same purchasing power as before, and are simply not able to use it due to current travel restrictions.
On a wider scale, while slashing rates might seem like a way to encourage a public they feel may be hesitant once lockdowns are lifted, it can just hurt overall RevPAR and increase the time to recover financially once demand returns. Similarly, the inclination to reward loyal customers with early/priority redemptions on premium inventory is understandable and appropriate to a degree – however the ability to dynamically price high value rooms, rather than give them away will be key. It’s also important to consider that the ability for loyal guests to visit a favoured hotel or hotel group may still be limited given the incremental recovery, so adapting to attract revenue in line with this – for instance through increased focus on domestic travel and engaging affluent travellers through specialist distribution – is something to be explored.
What is the role of technology?
We have already seen in sectors like banking how events of the last month have highlighted the need to accelerate digital-first products and services and there are definitely synergies with the travel industry, which despite numerous innovations, remains hampered to a degree by legacy systems - some dating back decades.
Post-crisis, the demand for a more seamless customer experience won’t change. Therefore, many forward-looking hoteliers are using this downtime to upgrade their systems or complete their technology-based projects so that they may be at the ready for recovery.
Now more than ever platform and cloud-based solutions can help hotels attract more relevant, hard to reach customers that would be expensive to market to directly. For us it’s about leveraging our relationships with our financial services clients to effortlessly connect our hotel partners with a desirable, highly mobile customer base that values travel and is willing to pay to upgrade their flight or hotel – at zero acquisition cost to the hotel. In delivering a mobile app that’s focused purely on upgrades we’re taking friction and uncertainty out of the system for hotels and guests alike. With closed market pricing and distribution, the hotel can dynamically release and price rooms for a customer set that is actively seeking to upgrade, creating a positive value exchange that increases that guest’s positive sentiment to the hotel, while monetising high value inventory that that would otherwise go unsold.
Where specifically do you think hotels might need help?
Harnessing and optimising the power of digital – and mobile in particular – is definitely one area that it's challenging for hotels to tackle alone. Customers increasingly want seamless and mobile-first experiences and more travel is being managed in-app. We also know that when it comes to offers, customers increasingly want to feel that they have found that saving on a holiday, hotel room, or experience themselves rather than be 'sold to'. So while their own channels is one obvious route for hotels to up-sell things like available room upgrades, it can risk leaving customers vague on the value or saving they've gained, and whether they have really secured a deal. The feel-good factor that s customer feels from discovering and securing their own deal, and especially a saving that is transparent, is currently under optimised by hotels when it comes to their ancillary products and services. Rather than invest time and resource in creating the technology that optimises this themselves hotels can benefit from integration with third party platforms with mobile-first technology to access the right customer, with the right price at the right time.
Partnering with a specialist in mobile also brings development resource that enhances mobile distribution, and the customer experience across different devices and operating systems – so the hotel can get on with what it does best.
While the exact response and recovery time may be different for each property, the most important thing for hotels to do is monitor how the market is changing, assess the incremental opportunity and be adaptable and flexible when strategising and planning
To learn more about how Upgrade Pack can help your hotel get ready for the recovery contact email us.