As the pandemic continues to impact global travel and the hospitality industry, you may be asking how can the hotel industry recover after COVID-19?
Concerns relating to the spread of COVID-19 and large-scale travel restrictions continue to have a direct impact on hoteliers across the Asia-Pacific (APAC) region and worldwide. Markets that source a large portion of their guests from mainland China have been affected the most by travel restrictions, and hoteliers across the world remain concerned with the volatility surrounding how the hotel industry has been affected by COVID-19.
So, how can the hotel industry recover after COVD-19? Here are some recommendations and guidance from IDeaS’ industry experts on how to proactively prepare for your hotel’s recovery across your organization and how to leverage your advanced RMS as effectively as possible:
Meetings & Events
From Singapore to San Francisco, Melbourne to Barcelona, major conferences around the world that have been on pause the past two years are now back. Organizers have hit the play button, these large tentpole events are returning.
The recovery time for convention hotels with a large meetings & events (M&E) business segment has taken much longer than other hotel types. As M&E bookings return, it’s still important for hoteliers to liaise with the event organizer to postpone the event and avoid as many outright cancellations as possible. It’s also important, now more than ever, to understand and promote your most profitable room configurations and event types to maximize your M&E revenues.
Convention hotels hit hardest may even explore expanding into new markets, such as office buildings or small enterprises in the area without a staff cafeteria, to provide food delivery and catering. This can help to promote your hotel’s reputation, increase total revenue by fully using the resources as well as release some cash-flow pressure.
Operations
Revenue managers should regularly update hotel occupancy forecasts and provide them to the operations department for proper staffing accommodations. The revenue manager must also maintain close communication with the front desk and housekeeping department to make reasonable arrangements for the use of rooms so the hotel can carry out energy control, saving energy by shutting down entire floors or wings.
To keep up with public concern regarding health and safety, hotels need to be committed to health services details, including guest-room hand sanitizers, fresh-air systems, display of indoor air quality, high-quality bedding, nourishing, organic food supplies, airport transportation vehicles in a clean and disinfected condition, etc., to improve service quality and guest satisfaction.
Finance
Keep a close eye on your hotel’s revenue budget and forecast and make calculated adjustments as needed. Financial forecasting must focus more on controlling things like energy and labor expenses. This process requires collaboration from all departments. In terms of labor cost, try to clear out staff overtime and encourage employees to take annual leave and/or schedule mandatory training sessions during periods of low demand. Continue to carefully maintain cash flow. In times of economic crisis and major emergencies, most small and medium-sized enterprises will fail to survive due to cash-flow disruption.
Revenue Management
As COVID-19 and its variants continue to linger within our communities, stay firm with your pricing strategy and avoid making drastic changes. Sometimes, hoteliers have the tendency to panic, drop prices or offer large discount promotions. However, lowering prices will not stimulate demand in this situation. Hoteliers must adjust price sensibly. An advanced revenue management system will help you to make the best decisions on pricing changes and promotions.
Want more ideas on how the hotel industry can recover after facing the worst of COVID-19? Here are some key tips for leveraging your IDeaS RMS during periods of demand disruption:
- Proactively and thoughtfully adjust demand in your RMS in accordance with the level of impact you observe in your local market.
- Avoid making gut-instinct or emotional decisions and focus on analytical strategic approaches to pricing.
- Do not rush into any discounting practices or third-party channel agreements without first consulting your RMS.
- Continue to carefully monitor and adjust any demand overrides implemented and pay close attention to your competitive market position constraints.
- If you are unsure of the specific period of impact, adjust only the dates you are confident you can expect the most significant impacts.
- Actively monitor demand overrides and how the demand materializes; adjust as necessary as the event evolves.
- Mark the affected period as a special event covering the period that has significantly impacted demand.
- Pay close attention to your Competitive Market Position Constraints (CMPC) and exclude competitors driving down pricing or displaying erratic pricing behavior.
We encourage our clients to reach out to their client relationship manager with any questions or concerns. Stay strong. Stay calm. Stay smart. Stay healthy.
Visit our COVID-19 hotel industry guidance hub for all the latest insights and information from IDeaS.
