Hoteliers – it’s time to act! Base strategy and recommendations following the coronavirus crisis

Hoteliers – it’s time to act! Base strategy and recommendations following the coronavirus crisis

20 March 2020Marcin Dragan

We intensively analyze the situation which the hotel industry currently is facing and outline various scenarios. Get some positive news – check out the analysis and recommendations prepared by the Profitroom team.

Dear Hotelier!

I fully understand the predicament you are currently facing. At Profitroom we have an holistic understanding of hotel business models and their economic situation. But let’s not panic. As an industry we have faced substantial growth for years and:

We will survive this crisis.

I will not refer to operational matters, health measures for employees and guests or government support for your business – you have other sources for this. However, representing Profitroom, I wanted to concentrate solely on your bottom line, i.e. reservations.

We provide reliable data and analytics from our reservation systems. We will soon be publishing more findings showing the demand and booking window variations in real-time

As you will be perfectly aware, reservations are currently falling dramatically. It’s safe to say that the situation will not be solved in time for Easter, as more and more cancellations are being registered for this date and great caution will be continued. Also, it’s not appropriate to encourage ill-advised behaviour within travel and tourism, while we all work on reducing the risk of infection and still so little is known about this matter.

It’s important to highlight that these turbulent times will not persist for too long

It’s worth comparing the economic situation on Asian markets, which have been ahead of us in terms of contagion and its implications. As you can see they’re returning back to normal, while upholding the guidelines of relevant governing bodies and tourism services.

In a few days, UK citizens will seek distraction from their domestic quarantine and reservations will start to grow for the summer period and onwards.

Our recommendations to turn uncertainty into opportunity

I’m convinced that in the period following this crisis the desire to travel abroad and to fly will continue to be affected for some time. With the appeal of holidays at its highest after quarantine and the peace of mind and security that staycations can provide we anticipate this being the saviour of our industry. 

This will create a vast demand for domestic travel and will evoke rapid economic growth for hoteliers in the UK. Therewith offering hoteliers perhaps the biggest opportunity to recover from this crisis.

Needless to say, this is only one of many scenarios we’ve analyzed, but in our opinion represents the most probable one – therefore this is the one we want to focus on.

I can’t guarantee this becoming reality and I explicitly recommend you to prepare alternative action plans while following the evolution of the situation.

Such dynamic changes require us all to be ready…

…to change strategy at any time and be able to react using alternative means. And yet, if the absolute apocalypse does not happen, this scenario seems very real, doesn’t it? It would strengthen domestic tourism for years to come.

In this baseline scenario, it’s crucial not to get caught up in a panic and make drastic decisions when it comes to your sales activity i.e. selling badly, at low yielding prices, or on broker’s commissions. This would prevent you from seeing the ADR and GOPPAR increases as a result of ultra-high demand. It is, however, the right moment to focus on direct bookings.

Now, cost cutting undoubtedly is necessary for businesses, including temporary closure of the facility if the situation requires it. But even now you should remain socially responsible and remember that how you behave in these difficult moments will be remembered by employees. After all, you will need a reliable crew when demand comes back!

You have to look into the future. Whoever does not have the courage to act in times of a crisis will not win.

So what can we do NOW?

  • Check back regularly, we will provide daily demand statistics and the latest recommendations.
  • We will help you optimise your direct channel. With the typical operational challenges that hotels face there has never been enough time for this – but now is the time. Sit down in front of your computer and improve your online promotions, offers and packages with us. Our consultants will help you, offering free advice via our chat tool after logging into Profitroom Suite. Whatsmore, hotel employees can remotely work on this from home.
  • Decide when to reopen your hotel. You have to signal yourself when your hotel will be ready to receive guests and what security measures you adopted in the meantime. Then communicate it thoroughly through all the channels available to you.
  • Don’t lower prices and react sensitively to the changing situation. Wait a few more days for the flow of incoming reservations and dynamically manage prices and restrictions. It will be behaving just like this virus, first slowly and strongly growing. Start with flexible, fully returnable offers, and increase the cost of cancellation closer to the arrival date. Follow the statistics on our Facebook profile, LinkedIn and blog to get a better feeling for the momentary situation. Soon we will show additional data illustrating interest ahead of demand and illustrating the so-called booking window.
  • Bet on direct bookings – when, if not now? If you are not yet familiar with how you can benefit from direct bookings, now is the perfect time to catch up.
  • Take advantage of your hotel being empty. Use the time to make necessary repairs and schedule overdue photoshoots. When was the last time you could undertake these projects without disturbing your guests? Professionals now have downtime, so you don’t even have to wait for appointments.
  • Think about new, individual tactics for your hotel. You may have to change your target group and your offer considerably. Involve all your employees in brainstorming – of course working remotely.
  • Use the technology you have to offer and manage reservations. As the situation is extremely dynamic, reservations and cancellations will be frequent and it will be easy to get lost. In addition, remember to prepare mailing bases for your guests – they will be needed soon.
  • As a hotelier, support the holiday initiative in the UK, seek government support for the promotion of leisure in national facilities and of course direct bookings!

Let’s remember that rest does not necessarily mean long vacations – maybe the upcoming early May bank holiday or June can already present great opportunities for recreational offers.

As for other tourist facilities, I also recommend following the current travel trend, e.g. city breaks. After the summer season, demand for leisure facilities might be stronger than ever before, and it looks like the MICE segment will revive from September onwards. Hundreds of thousands of sales people are waiting to start organizing conferences again.

I plan to spend summer holidays in my home country and I’ve actually already booked our family trips, which I won’t cancel for any treasures 😉

Now I, as is the entire Profitroom team, show our dedication as we work intensively to support you! We will soon provide further solutions for hoteliers facing this temporarily difficult time.

Wishing you best of luck, and remember, we are here for you!

Marcin Dragan, Chairman of Supervisory Board at Profitroom