3 Tips to Combat Coronavirus for the Hotel Industry

[Editor’s note: These three tips come courtesy of Lily Mockerman of Total Customized Revenue Management. You can read the full post of TCRM’s blog.]

Even when we are away from our devices, there is no escaping the buzz and speculation around this novel disease that originated in Wuhan, China. Major events like ITB Berlin and SXSW have been canceled and entire cities have been locked down. Hoteliers are seeing additional corporate travel restrictions for both group and transient business travel. Misinformation abounds.

Here are three tips to combat coronavirus impact for the hotel industry.

1. Upgrade Your Sanitation Measures and Communicate That Information to Your Guests

Efforts to help guests stay well while traveling will certainly be appreciated by everyone.

  • Consider stocking your gift shop with items like Airborne, Emergen-C, Zicam and simple thermometers.
  • Make hand sanitizer available at all guest contact stations like the front desk or the restaurant hostess stand.
  • Re-train your housekeepers on compliance with proper sanitizing practices such as high touch surfaces in rooms like remote controls, drinking glasses and desktops.
  • Have an emergency plan in place and communicate it to all staff in the unlikely event of a quarantine.
  • Educate on procedures in the event a staff member encounters a sick guest.

Be mindful that some guests may not be limiting their travel because of coronavirus, so it’s best not to make it your primary message. However, consider publishing a fact page. Here’s what to include:

  • Links to the latest updates by the CDC
  • Tips for staying well while traveling
  • Description of staff training, especially guest-facing staff like the front office and housekeeping, to prevent the spread of ALL diseases
  • What you’re doing to ensure guests stay well while traveling

2. Whatever You Do, Don’t Drop Rate!

Guests who don’t book or even cancel due to coronavirus fears won’t change their minds just because you’re offering a special deal! Inevitably, you will see cancellations and drops in pace if you haven’t already. While these can be managed, the idea that you can make more money by dropping rate is simply misplaced. Your pace is unlikely to see a significant boost with this tactic, which means you’re just leaving money on the table and potentially hurting long-term industry trends.

Granted, if your entire market or competitive set begins to drop rate significantly, you may have limited options given that you need to still compete locally for business. However, it is important to work with your strategy team to build consensus on what to do if the market drops rate.

  • Will you stay at your usual placement within the comp set rates?
  • Will you try to be a laggard in dropping rates?
  • Will you create value-add offers instead of discounted promotions?

Make sure your whole team is on board and agrees on the strategy. Then if someone begins to panic, remind them of the agreement that you’ve made, carefully measuring to make sure that it remains the right course of action as the situation develops. While you should not be afraid to make strategic adjustments to your plans and tactics, they should be measured and evaluated rather than using knee-jerk reactions to declining statistics.

3. Don’t Neglect Your Long-Term Strategy for a Short-Term Disruption

I think it’s safe to say that most hotels recently finished creating a budget and marketing plan for the upcoming year. Don’t forget what your goals were! Any outbreak of this nature has a temporary life cycle. At this stage, we can certainly benefit by watching the cycle of this disease in China, the major origin point, to determine when the main impact will be over. In this graph from STR regarding the SARS outbreak, the downcycle lasted roughly 6 months in Asia, and had more or less fully recovered in occupancy 3 months after the easing of travel restrictions.

Regardless, it’s important to note that your basics must be sound. If you’ve been skating by on a successful couple of years and never done a system audit or deep dive into your strategy because things were going “well enough”, you may find that it’s time to dig in a bit deeper.

  • Make sure you’re watching the same comp set that your guests are considering.
  • Measure the impact of your strategies and tactics and avoid knee-jerk reactions based on anxiety.
  • If you have the data, look back at the impact from SARS, which happened close to the same time of year, or other similar demand impacting events to get an idea of ​​how your hotel and market performed, and apply the takeaways to adjust your current strategy.
  • Use future-looking demand reports like TravelClick’s Demand360 to better understand your local market impact.

While there is still a great deal of information that is unknown about COVID-19, one thing remains true across every negative demand event. The most strategic hoteliers will be proactive in their planning and enjoy greater profitability because of it. If you do find that you’re suffering from depleted demand but don’t have the time to dig in, we would love to partner with you at ThinkUp on a Profit Launch Assessment. This affordable assessment can be completed in 2-3 weeks, providing a detailed and extensive look at areas of opportunity in the current environment. This includes measuring your channels to determine which are the most profitable (This doesn’t always tie back to the highest ADR or RevPAR.) You can learn more at our website, www.ThinkUpEnterprises.com.

Stay well and keep your hotel metrics healthy too! If you haven’t already, we would love to have you participate in our coronavirus impact survey, which is 100% anonymous. Given that we receive at least 50 participants, we will share the results within a few weeks in another post. You can participate in this 5-question survey here.

If you need help or guidance navigating this uncertainty, you can always reach out to our team. If you’d like to read more from Lily, check out TCRM’s blog.

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