The Corona (COVID-19) virus global pandemic is an unprecedented crisis and hotels are among the many businesses feeling the effects, as global travel restrictions come into force and entire countries face ‘lock down’ procedures. This article will offer tips for hotel owners looking for ways to optimise revenue and limit the damage.
- What is the Effect of the Coronavirus Crisis on Hotels?
- 11 Tips for Hotels During the Corona (COVID-19) Crisis
- Tips to Communicate Hygiene Measures
- Tips to “Optimise” Your Hotel Revenue
- Tips to Prepare for Better Times
- Tips for Hotels to Optimise Revenue in Low Demand Periods
- More Tips to Prepare for Better Times
The Corona (COVID-19) crisis has had a significant impact on the hotel industry and hospitality as a whole, with travel restrictions being imposed by governments around the world. Local, national and even international events have been cancelled, with examples including the ITB Berlin Travel Trade Show, UEFA EURO 2020 and the Olympic Games.
As businesses face restrictions and workers face uncertainty about travel and their own job security, a huge number of business trips and events have also been cancelled. Meanwhile, the financial insecurity caused by the crisis has meant fewer people are booking holidays, even for later in 2020 or 2021.
Hotels worldwide are experiencing declines in occupancy of up to 90 percent and, in some cases, are even being ordered to close. This means substantial revenue loss, despite on-going costs. As a result, many hotel owners are having to contend with cash flow issues and problems they have never experienced before and had no ability to foresee.
For many hotel owners, the current Corona (COVID-19) virus crisis will seem bleak and it can be difficult to know what to do. However, hotels that are still functioning can take measures to protect guests and hotel staff, and optimise revenue. Below, you will find tips on how to do this, and prepare for the future, when normality resumes.
Tips to Communicate Hygiene Measures
Hygiene is one of the most important things to focus on during the Corona (COVID-19) crisis and the following tips can help:
Perhaps the single most important step any hotel can take is to adopt some preventative measures, in order to protect guests and staff members. These measures should include developing regular hand-washing routines, practising appropriate social distancing and teaching employees to avoid touching their eyes, nose or mouth.
On top of this, measures can be rolled out across the hotel, to keep guests safe. For instance, rooms and public spaces will need to be cleaned regularly, using disinfectant products. Any laundry should also be washed using disinfectant and you will need to keep accurate records, in the event that contact tracing is required.
2. Communicate Your Hotel’s Hygiene Measures to (Potential) Guests
In addition to taking action, it is important that you actually communicate the measures you have taken to guests, or potential guests, in order to inspire confidence and alleviate any concerns they may have. For instance, on your website homepage, and during the booking process, explain what measures you have taken to keep people safe.
For any guests you currently have on the books, who are still planning to stay at your hotel, you can send out a pre-arrival message. This message can explain some of the precautionary measures you have taken to minimise risk and also provide instructions for the guests, so that they behave responsibly during their stay as well.
Tips to “Optimise” Your Hotel Revenue
A key part of day-to-day hotel management involves optimising revenue and the tips below can help:
Where distribution of hotel rooms is still possible, it is important to try to capitalise on the full range of online distribution channels. This means, for instance, working with online travel agents, registering with global distribution systems, and optimising listings on hotel metasearch platforms.
During periods of low demand, it is especially important to try to plug any gaps in your distribution mix and ensure that your hotel is as visible as possible to the customers who are seeking rooms. Remember not to neglect your own hotel website either, as this is your most valuable distribution channel, due to the lack of commission fees associated.
Find more detailed information about distribution management in the article “Tips To Increase Your Hotel Bookings Through OTAs“.
During the Corona (COVID-19) pandemic, it may be sensible to adopt some of the pricing strategies that you might adopt during other periods of low demand. This might mean charging lower room rates, in order to fill rooms that might otherwise be left vacant. However, there is a balancing act here.
If demand is very low and you are dealing with a tiny amount of guests, lowering prices can be detrimental, as you may not attract extra guests and end up receiving less revenue from the guests you do have. It is also important that your pricing decisions during the crisis do not have longer term implications, affecting customers’ perception of your hotel.
Our article, “Pricing Strategies to Increase Your Hotel Revenue”, explains more.
Where sales are still possible, it is important to try to capitalise on the extra revenue that can be gained through up-selling and cross-selling efforts. Examples of up-selling include encouraging guests to book larger rooms, or rooms with a better view, which you can sell to them for more than the original price they were going to pay.
Cross-selling, on the other hand, involves selling additional products or services. In hotel settings, this might mean encouraging guests who have booked a hotel room to also book a spa day, or make use of the hotel restaurant. During the current crisis, these efforts may need to centre on long-term bookings, or voucher sales.
Find more detailed information about upselling strategies in the article “How Much Revenue Could Your Hotel Make From Upselling?”.
6. Food and Drinks Deliveries
One of the more innovative ways some hotels are adapting to the Corona crisis is by joining delivery services like Deliveroo and Uber Eats, in order to bring in revenue from food or drinks deliveries. This can help you to avoid situations where food supplies are going to waste, and can simultaneously help to reduce cash flow issues.
Alternatively, depending on local government advice, some hotels are also able to create pick-up services, where local people can order online or over the telephone and then collect food or drinks safely. In terms of additional tips, it may be sensible to contact locals and regular guests, who may have a desire to support local businesses.
Some hotels offer gift vouchers, which can be used for rooms, meals in the hotel restaurant, or use of hotel facilities like spas. Offering these vouchers and promoting their availability on social media may be one way to keep revenue coming in from local or regular guests, who are showing a willingness to support their favourite businesses.
Those customers who purchase a gift voucher will be able to redeem it once the property is open again, or when travel restrictions have been lifted. Meanwhile, the advantage for those in the hotel sector is the ability to continue earning money, which can be essential for limiting short-term cash flow problems.
Hotels may organise gift vouchers independently, or make use of gift voucher apps to accomplish this. In the Netherlands, for example, there was a joint venture of suppliers, including Coca-Cola, Heineken and Unilever, who organised a national platform (https://www.helpdehoreca.nl/) to support the hospitality industry.
Tips to Prepare for Better Times
For some hotels, it may be best to focus on boosting performance once we return to normality, using the following tips:
While the situation with the Corona (COVID-19) virus is unfortunate and hotels must contend with revenue loss, it is important to keep an eye on the future and understand that things will improve. With this in mind, one of the ways you could potentially use time is to make sure your business and its staff are as ready as possible for when things start up again.
This may mean providing training materials for employees. In areas where employees are being asked to self-isolate or adhere to strict social distancing, these materials could be distributed online. Ultimately, developing the knowledge of your team will help you to be more competitive when things do eventually return to normal.
While it may not be an immediate concern during a crisis, with your budget under pressure, the Coronavirus crisis does provide hotels with a unique opportunity to perform maintenance work without disrupting guests, due to low occupancy rates or temporary closures. This could include everything from fixing broken equipment, to thoroughly cleaning.
Essentially, the time can be used to make sure your hotel is in the best possible condition when it re-opens. One of the best tips is also to use this time to take new photographs and videos of your hotel for promotional purposes. After all, rooms will be empty, everything can be made as clean as possible and hotel walls can be re-painted.
Another key way in which hotels can plan for better days is to use time during the Corona (COVID-19) pandemic to optimise marketing and distribution strategies. This could mean re-thinking the platforms you advertise on and the marketing messages you put out, in order to attract guests to your hotel in the future.
Think about your unique selling points and the specific reasons why guests should choose your hotel. You can also use the time to think about distribution, optimise current distribution channels and think about new ones, especially when it comes to working with online travel agents, hotel metasearch engines and similar online platforms.
Our article, “Essential Hotel Marketing Strategies”, explains more.
11. Automate Processes and Use Software Trials
Software suppliers are also suffering as a result of the Corona (COVID-19) pandemic, as hotels are cutting their budgets. However, the two groups can potentially help one another. Low occupancy or full hotel closure does provide you with an opportunity to try out new software and automate processes, in order to save on certain labour costs.
For instance, it may be a useful time to re-think your booking processes, the way you calculate room prices, your housekeeping planning, or the effectiveness of your current customer journey. Some of the software that may be useful includes property management systems, revenue management systems and housekeeping software.
In many cases, it will take time to set up the software systems and build the necessary knowledge. However, many suppliers will also offer free trial periods on their software during the Corona crisis, allowing you to experiment before you fully commit. Examples of software suppliers who offer their software for free during the Corona crisis are Oaky (Upselling tool for hotels) and HiJiffy (Chatbot for hotels).
For hotel owners, low season and other periods of low demand represent a major challenge, as fewer rooms being booked means less money coming in and that can have serious cash flow repercussions. In the article “Tips for Hotels to Optimise Revenue in Low Demand Periods” you find tips that will help you to achieve this aim and maintain a healthy financial situation.
More Tips to Prepare for Better Times
The coronavirus pandemic (COVID-19) crisis has hit the hospitality and travel industry hard. Due to (partial) lockdowns, travel restrictions and social distancing, business events and holiday trips are postponed or cancelled, resulting in a decline in business.
In the category “Corona” you find a selection of tips which help businesses operating in the hospitality and travel industry to recover and prepare for better times.
For hotels, the current Corona (COVID-19) crisis poses significant challenges and there are no easy answers. However, using the tips provided, you may be able to keep staff and guests safe, optimise the revenue that you are bringing in during the pandemic, and fully prepare for a return to normality, so that you can be as competitive as possible.