Covid-19 has hit businesses of just about every shape and size hard, but few have felt the effects quite as strongly as those in the hospitality industry. Bars, restaurants and hotels in many parts of the world have been forced to close as restrictions to limit the spread of the Coronavirus have taken hold.
Before the pandemic slammed the breaks on international and domestic travel, the global hotel trade was looking rosy. The corporate travel industry alone was forecast to grow into a $1.7 trillion industry by 2023. But rather than enjoying what was predicted to be one of the biggest growth spurts hoteliers have ever seen, they have been plunged into the most challenging period in the history of the industry.
In the face of spiralling occupancy rates and surging cancellations, businesses could have crumbled, but instead, bed-and-breakfasts, boutique hotels and global chains are adjusting their approaches, refocusing their efforts and doing everything they can to adapt to the new normal.
The Impact of Coronavirus on the Hotel Industry
There’s no denying the devastating impact the pandemic has had on the global hotel industry. Occupancy rates are down across the world, with Europe and North America two of the regions that have been the hardest hit. In the US, figures from the Bureau of Labor Statistics show that the unemployment rate for workers in the leisure and hospitality industry is at an unprecedented 28.9%.
In the UK, the situation is no better, with predicted occupancy rates falling from 75.4% in 2019 to 37.6% in 2020, before rising to 59.2% in 2021. Worse news still is that even with the successful roll-out of the Coronavirus vaccines, PwC forecasts that it could take four years for occupancy rates to return to pre-Covid-19 levels.
Despite the devastating impact that the pandemic continues to have, hotel sales and marketing teams are doubling down on their efforts and doing everything they can to maximise their revenues now, with the knowledge that the end of the pandemic could potentially be in sight.
The Innovative Ways Hotels are Adapting
We often hear about the importance of agility in business, and nowhere is this better illustrated than in the response of many hoteliers to the pandemic. There are numerous tactics and strategies that hoteliers are putting in place to help them outlast the travel crunch and come back. Some are very creative, while others are surprisingly simple.
Check-in Changes and Key Digitisation
Reducing human contact has been a key part of suppressing the virus, so hotels such as the CitySuites Aparthotel in Manchester have made some important changes. Gavin Bailey, the CitySuites director, explains:
“One of the biggest changes we made was creating a contactless, express check-in, which has made the process quicker, easier and safer for our guests. It will also allow us to adapt to any new procedures and requirements Covid-19 compliance may bring in the future”.
HayMax Hotels, which has four boutique hotels in Aspen, Colorado and Sun Valley, Idaho, has responded in a similar way. It has invested in technology so that guests can access their rooms via a digital key. That makes the check-in process safer and more efficient by removing the requirement for face-to-face interaction at the front desk.
These are the kind of innovations that many hotel guests have wanted for years. However, without the challenge of a global pandemic, it’s something the industry had been slow to adopt.
Whole Spa Rental
Some hotels have gone one step further in their bid to reduce face-to-face interaction. Under Covid-19 restrictions, many communal areas such as hotel spas have been forced to close. However, the Roxbury Hotel in Stratton Falls has come up with a clever way to keep some areas open and generate an income.
Usage of areas such as the hot tub, sauna, steam room and relaxation room has been limited to individuals and family groups that are travelling together. The facilities must be pre-booked for time slots throughout the day. During those times, individuals and family groups have exclusive use of the facilities. That turns a challenging situation into a unique opportunity for guests to enjoy those luxurious surroundings all to themselves.
Day-time Only Stays
In Spain, where the number of foreign visitors has fallen by more than 80%, some hoteliers are keeping their businesses going by turning their rooms into potential workspaces and offering day-time only stays.
So-called day-use hotels are nothing new, but the number of hotels offering daytime bookings at a lower price than overnight stays has risen significantly. This is particularly the case in cities like Madrid, where the number of tourists and business travellers has fallen dramatically.
Some hotels are taking the idea of opening up their rooms to workers one step further. One example is the Rosewood Hotel in London, which is giving workers the chance to escape their daily lockdown routines by booking a workcation.
Hotel rooms come with a workstation already set up and a butler service to handle work-related tasks such as scanning and printing, and even organising tutoring and babysitting for children. There’s also a guaranteed early check-in and late checkout so workers can make the most of their time.
One hotel that’s rising to the innovation challenge is the Mercantile Hotel in New Orleans. It has a state-of-the-art robot butler that can deliver the newspaper to a guest’s room in the morning, hand over welcoming nibbles on arrival and even mix drinks.
The robot butler has proved to be very popular among the hotel’s guests and is an effective way to reduce face-to-face interactions with staff. It has also become a tool for generating revenue, with the robot charging a fee for delivering items, such as coffee from the lobby cafe, that would not have been able for delivery before.
Flexibility, Safety and Lots of Information
Given the nature of the pandemic, it’s perhaps not surprising that travellers and hotel guests are making safety and hygiene measures a priority. Hotels are responding by implementing strict cleaning protocols to combat the virus. The CitySuites Aparthotel in Manchester is a prime example. It has implemented Covid-specific cleaning measures around the building and has received an AA Covid Confidence certificate to provide reassurance for visitors.
Flexibility has become another important feature for guests when booking hotels during the pandemic. With new and sudden restrictions leading to the last-minute cancellation of weekend trips, overnight stays and business meetings, customers want to know that hotels have policies in place that will allow them to rebook, reschedule and receive a full refund.
Many online travel agencies are also now displaying crucial information that’s pertinent to the current situation on their hotel listings. That includes explanations and advice about local Coronavirus restrictions, concierge services, details about transfers to and from the airport, expanded information on cleaning procedures and updated details about what is included in the stay. All of these details are now key to generating reservations.
Marketing Rooms Differently
We’ve already touched on how hotel rooms are being repurposed as a workspace, but that’s just one example of how hoteliers are marketing their businesses in a different way. Some hotels are offering special rates for local people who want to self-isolate in comfort away from their families and friends. This provides a useful service for the local community, while the reduced rate shows compassion but still helps to generate an income.
With ongoing travel restrictions, people are getting bored being at home but still want to live their lives and experience something different. Some hotels are helping them do that by offering discounted prices on luxurious rooms so local people can experience their cities in a new way.
Renovating For The Future
While no one would have wished for the pandemic shutdown, it does provide hoteliers with a unique opportunity to renovate and rethink their business models. We’ve already discussed how hoteliers are taking this opportunity to invest in technology for ‘touch-free’ check-ins, but others are going a step further by renovating their hotels with sustainability, improved customer convenience and safety in mind.
Hotel owners are putting a greater emphasis on health-related features such as indoor/outdoor architecture, antimicrobial finishes and high-performance ventilation systems to reassure guests and heighten their sense of wellbeing and safety. Other popular retrofits that are taking place include hotel room carpets being replaced with solid flooring that looks and feels cleaner, and shower curtains being replaced by glass doors.
No Business as Usual Until 2023
While the 2023 target of $1.7 trillion of corporate travel expenditure may now be some way off, there is broad confidence that the hospitality industry will return to something approaching normal in the not so distant future.
For most small UK hotels, getting through the next few months is likely to be the biggest challenge they face. Although it may be a steep learning curve, the message is clear – now is the time to do something different. Adopting a customer-centric and technologically leveraged approach could help to maximise revenue over the next few months. And while some of these new strategies might only be around for the short-term, others could prove to be a reliable source of revenue long after the Covid-19 pandemic subsides.