The Global impact of COVID-19 on the hospitality industry
April 23rd, 2020 / #hospitality, COVID-19, Global Hospitality, Hotel industry, Industry Insights / None
To start us off, Robin Rossmann of STR shared the latest data revealing the impact of COVID-19 on the hotel industry.
According to STR over 40% of hotels in China are closed temporarily. Similar or more severe closures are expected or already enforced in other countries such as Italy and Spain which have also been hit hard by the crisis. Around the world, hotels are seeing a staggering drop in average occupancy. When and how hard individual countries will be impacted strongly depends on how the spread of COVID-19 is managed locally, how much business vs. leisure travel they rely on and if guests are primarily international or domestic.
Due to the ongoing spread of COVID-19 and the resulting lockdowns bringing many industries to a standstill, economists now expect a global recession, the length and depth of which will depend on the virus and government intervention. Given all this, the main question hospitality industry professionals are asking, is whether this will have long-term effects on travel behavior in both the leisure and business segment and how long it will take for the hospitality industry and the economy as a whole to recover.
What hoteliers can do during the COVID-19 outbreak
Many leisure travelers still have the same purchasing power as before and are simply not able to use it due to travel restrictions. This means sights should be set on the future, i.e. the second half of the year, when this crisis will hopefully have passed, and people will be taking the leave they accumulated during this time. Due to the degree of uncertainty, hotels will have to be more flexible than usual when planning, strategizing and budgeting.
In regions where hotels are not forced to close but suffer from low occupancy, the key is not to slash rates but rather to right-size them to match the reduced demand and stay in line with the comp set. Creating attractive package rates which focus on added value, staycation offerings for local segments, alternative ways of monetizing F&B outlets via take-away and delivery, offering paid parking to the public or having creative day-use offerings can raise much-needed cash at this time and attract guests post-crisis. Also, promoting relevant offers now, such as airport transfers in sanitized cars, show hotels react to the situation and want to make their guests feel comfortable even in this difficult time.
For hotels facing cancellations due to travel restrictions or mandatory closure, offering vouchers or attractive rebooking options instead of cancellations and refunds is a way to keep on-the-books business. When groups cancel, sales must make a note to follow up for re-bookings once business picks up again.
The hoteliers must keep the time after COVID-19 in mind when business will return, especially in areas where hotels have been forced to close. To be ready for that time, it is imperative to keep up marketing initiatives. This can be on the hotel’s social media accounts, with the help of staff sharing on their own channels or via suitable influencers or media outlets. By finding ways to maintain a public presence and sharing how a property is going through this crisis, both branded and independent hotels can stay at the front of their audience’s mind and get their share of bookings once demand begins to grow again.
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