Hoteliers who reconfigure their focus toward local business can find a way to mitigate some of their revenue losses caused by the coronavirus pandemic.
Travel advisories have been issued, quarantines are in effect, shows have been canceled and long-haul trips have been delayed. Whether you believe the fallout from the coronavirus (COVID-19) to be an actual pandemic or largely media-driven panic, the fact remains that the world economic engine has spasmed, with dire consequences for every hotel’s operating budget for the rest of the calendar year.
Even in the thick of all the current market turmoil, I keep getting calls from hoteliers about what to do and how to salvage revenues. What really irks me from this global unfolding of events is that in the end, it means many hoteliers may lose their jobs as part of the cutbacks, and this is something I am hoping to prevent through this article.
In working with a couple GMs to see what strategies and tactics could be deployed to weather the storm, my consultancy developed a playbook both for the interim and for when the all-clear is given by the World Health Organization with travel slowly resuming to its previous behaviors in the subsequent months after this global shutdown has subsided.
Top of the list in this playbook is the idea of having a laser-focus on local leisure to make up for any losses incurred by people afraid of being in an airplane or around large crowds. This fear combined with our current state of economic volatility means that, while guests still are and will always be in need of a vacation, they will be less inclined to splurge and will want to avoid the airports or other high traffic zones.
This means staycations or visits coming from ‘rubber tire’ markets – that is, those that are manageably accessible by car. The panic also favors small or secluded properties that can boast about how isolated they are and how much distance there is from other guests.
Knowing this new mindset means you can then take the following actions:
- Design programs, small-scale events and incentives for only local territories.
- Set up a dedicated staycation loyalty promotion to garner support from your core feeder market.
- Build packages designed for quick getaways from your rubber tire population centers.
- Define a new advertising channel strategy and budget that best reaches people these nearby territories and can do so nimbly as the situation evolves.
- Activate your past guest data to help define new perks for return visits or references.
- Look for subgroups in your CRM that you can target with very specific offers.
- Using the programs that you’ve crafted for leisure, reach out to companies in your community to see if they are in need of a corporate getaway in light of the many national or international conferences that have been cancelled.
Of course, this is the 1% inspiration that we’ve gleaned based upon what’s happened thus far, all as part of one specific way that hotels can ride out this travel blip. You still need the 99% perspiration to define all the details of these bespoke programs, train your teams and promote everything accordingly in order to maximize the new opportunities that are presenting themselves within your local market.
To end with one instance where we’ve already applied this direction for a Canadian rural resort, we first set up creating a new early-summer seasonal dining menu that embellished all the local ingredients and nearby suppliers as well as a prix fixe menu available every night with great domestic wine pairings. The emphasis was to double-down on our vision of supporting the community with a few extra notes about food safety. Then, with a cute naming for this simple F&B program, we bundled it with a room, an arrival amenity and a couple smaller perks, all for a great overall package price.
From there, marketing took over as we released it first to our newsletter, giving our loyalty members an opportunity to book before a certain date when we then launched it wide on Facebook (with advertising support on that network) and through Google AdWords, two lucrative yet agile digital channels. For both, the ad spend was entirely for the two major urban cities that could comfortably reach the resort by car, thereby taking airplanes out of the equation.
While such programs may seem rudimentary, the key issue was timing in that the hotel needed sizeable pickup during this crisis period while guests typically want lots of advanced notice to properly take advantage of our promotions—two opposing qualities. Hence, simplicity in development was the name of the game so that we could broadcast it as soon as possible and so that potential customers had the maximum amount of time to decide.
Local guests in general need less total time from looking to booking—thereby maintaining a higher L2B ratio during short lead cycles—so always keep this group in mind in a bear market. Staycations will remain currently in vogue until the coronavirus is fully out of our collective memories, but also keep whatever playbook you develop for these unprecedented times handy in case—fingers crossed—you need deploy them again in the near future.
One of the world’s most published writers in hospitality, Larry Mogelonsky is the principal of Hotel Mogel Consulting Limited, a Toronto-based consulting practice. His experience encompasses hotel properties around the world, both branded and independent, and ranging from luxury and boutique to select-service. Larry is also on several boards for companies focused on hotel technology. His work includes five books “Are You an Ostrich or a Llama?” (2012), “Llamas Rule” (2013), “Hotel Llama” (2015), “The Llama is Inn” (2017) and “The Hotel Mogel” (2018). You can reach Larry at firstname.lastname@example.org to discuss hotel business challenges or to book speaking engagements.
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