If you didn’t see the PhocusWire article published in mid-March, titled “Nothing will be the same” How Italian Hoteliers are Coping with the Coronavirus Fallout, read it now. It’s an opinion piece by Florence-based Giancarlo Carniani, the current president of Confindustria Alberghi Firenze, the region’s hotel association. He also runs a small hotel company. In the article he shares his perspective about why he thinks COVID-19 will change hoteliers.
“Because when you are at zero, you have nothing to lose. You can really change the way you do business.”
For the first time in history, hotels are at zero occupancy with no bookings for the future. Not only do they have time now to mobilize and plan for the future, but they can reflect on the recent past. Of note, most hoteliers are livid with how Booking.com handled reservations during the crisis. Rather than providing future credit, they simply canceled the reservations.
“Booking is trying to force us to do only refunds, appealing to some condition of the contract…We have the impression they care too much about the stock market… Being treated as a disposable supplier to other distributors has gone on for far too long and at far too high a cost…”
Revinate recently surveyed 300+ hotel professionals about the coronavirus crisis. In the comments, a hotelier in French Polynesia validated Carniani’s feeling, saying that his top challenge is cash flow due to OTAs waiving all cancellation fees, without discussion, even on nonrefundable rates. Another hotelier from Czechia says, “It must be said that all OTAs collectively have been extremely non-supportive during these challenging times.”
In response, hoteliers are rethinking their distribution channels and realizing that they have the opportunity to start over and take back control of their bookings. In the same Revinate survey mentioned above, another hotelier from the United Kingdom says that talking to guests now is paramount, saying “As OTAs play hardball, refunding all guests as per their force majeure, we are trying to jump ahead and ask the guests to see if a date change is feasible.”
One positive from the pandemic is that hoteliers are hearing directly from OTA customers. When they can’t reach OTAs, due to overwhelming call volumes, they call the hotels directly. It allows hoteliers to establish 1:1 connections and be there for guests.
“It is really changing connections. It’s like we need more human touch. We talk a lot about technology, but we went back as human in this case.”
The pandemic is also driving hoteliers to think differently about their short-term marketing strategy and focus on the local or domestic market. People will likely be stir crazy when shelter-in-place orders lift but still fearful of traveling by plane. As a result, many will look to travel locally. Hoteliers that can reach local guests will be well-positioned to drive revenue when people begin leaving their homes again.
“Everyone is thinking about taking care of the domestic market.”
In addition, a new opportunity arises as Airbnb has changed its policy to allow guests who had previously booked stays on the platform with a check-in between March 14th and May 31st to cancel with a full refund under the company’s “extenuating circumstances” policy. This news, coupled with the fact that the company recently froze all marketing spend in an effort to cut costs, presents a chance for hotels to compete and win new business when the pandemic threat subsides.
There has been so much awareness recently about the plight of small business and consumers are showing that they want to help. Perhaps they will funnel some of their goodwill into a local or boutique hotel versus staying with a private host.
While nothing about the present situation is positive, it does provide you with some time to plan for the future. Get your database cleaned up. Do a segment analysis. Think through campaigns and promotions. Need some help? We are there for you. Just reach out or visit our coronavirus resource center.