Indie hotels react quickly to group fallout
Indie hotels react quickly to group fallout
25 MARCH 2020 12:41 PM

As they deal with the fallout from the COVID-19 pandemic, boutique properties are looking to attract small group business down the road by being able to change course quickly and by focusing on their unique qualities.

REPORT FROM THE AMERICAS—The inherently local nature of independent hotels is helping those properties craft more unique responses to the sudden and stark drop off in group demand related to the spread of the coronavirus (COVID-19), sources said.

But at the same time, they face serious disadvantages, like the lack of the centralized sales and marketing teams that brands have.

During this COVID-19 crisis that has all but halted travel everywhere and sent everyday life into a tailspin, independent hotels are finding that they are able to respond to the current situation with quick, more flexible responses for lost group business and all kinds of other guests, as well, said Greg Duff, co-chairman of Foster Garvey and leader of the law firm’s national hospitality, travel & tourism practice. This is what he has been hearing from hotel clients, as they make their way through this situation that keeps changing almost hour by hour.

“These properties have been able to respond on a local or regional basis, rather than adopting a national approach,” he said.

Independent hotels have not been immune from the wave of cancellations occurring globally. The magnitude of lost rooms depends entirely on the hotel location, the event dates and nature of attendees, Duff said. As with the entire hospitality industry, group cancellations have been particularly high in areas where the outbreak has been most prevalent.

Depending on the circumstances and availability, many are trying to offer groups the opportunity to re-book the cancelled event within the year, he noted. Most hotels are trying to reach a reasonable business solution rather than just requiring payment of contractually required cancellation charges.

Depending on the market, it may be difficult to postpone an event for a few months. With summer comes the peak season for many markets and availability is scarce.

“Groups may need to re-book later in the year. Hotels tend to try to re-book canceled business within the same year if possible to ensure receipt of anticipated group revenue,” Duff said.

He added: “Hotels are too busy reacting to the wave of cancellations to spend a lot of time seeking new bookings. That may change in the coming weeks or months, as most business scheduled for the next few weeks or months is canceled.”

Many of the independent hotels have established policies to allow for flexibility in travel and maintain future bookings, said David Sangree, president of Hotel & Leisure Advisors, a hospitality industry consulting firm.

“Cancellation fees and group attrition fees are being waived, allowing guests who are booking the ability to cancel at a moment’s notice based on the ever-evolving circumstances surrounding the outbreak and the ability to travel,” Sangree said.

Incentives are already being offered with regard to higher commissions and additional concessions to attract new group business, such as discounts on F&B, great comp room percentages, free Internet, free parking, said Steve Goodman, founder and managing partner of MeetingAdvice, a meetings and event management company.

However, it is not going to be easy to recoup group business for independents, as everyone in the hotel industry works to bring back travelers once the COVID-19 outbreak subsides and meetings once again begin to take place.

“The challenges the independent properties will have will deepen with regards to marketing; we are already hearing of numerous independents that are in serious trouble with little to no bookings,” Goodman said. “When this situation begins to turn around over the coming months, the independents will have a difficult time competing against the larger hotel companies.”

Goodman said that the biggest change from a meeting planner’s perspective moving forward with all properties, including the independents, is new cancellation, attrition, and rebooking languagealong with new language around “force majeure.”

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