6 key tips and insights for pivoting into 'adapt and survive' mode. The future of this industry promises to be exciting and profitable again as long as hotel owners are ready to reinvent and question past working models.
Travel and hotel trade professionals are just beginning to find their feet after the unprecedented effects of almost zero global demand due to COVID-19. One thing is certain: an altered lifestyle will emerge as a result of this crisis. Businesses will either be sold, shut, hived off and in some cases thrive exponentially. The key to survive and subsequently thrive depends on many factors such as cash in bank, demand, debt ratio, liabilities both external and internal, flexibility and a robust plan to see through this period.
Whilst some factors are beyond a hotel's control and not all issues can be rectified now, there are however key corrections a business can make to position itself for revival and growth as we approach the live with and post-COVID-19 era.
Here is a list of 6 key points that hotel owners and operators need to implement in order for their operations to be future-ready.
1. Remove any excess from the P&L
Eliminate fancy cars, fancy offices, and excess manpower whether on roll or third party. Be as lean as you can. This will not only give you the extra gasps you need now to survive but also yield exponential results in time. Discretionary spending will be hugely deliberate for some time to come. Ticket size will drop considerably as consumers realise the immense importance of cash in bank. Invest in reinventing your value proposition to attract the limited demand. Roll out open dated offers, something as simple as a “buy now, stay on any of the next fifty weekends”. Make these customisable and flexible for customers post sale to hook the client.
2. Segregate good and bad costs
Rally the good spending. Tangible costs headers that contribute to the sustainability of your business. Stay on course with investing in digitizing your business. Due to the travel restrictions and trust deficit, we will see acceleration in the digital economy. If the hotel is not already on these platforms it needs to be on them - post haste.
3. Have a clear SMART goals
Specific. Measurable. Achievable. Relevant. Time-bound. For example, enchance the tech capacities of your hotel. Insulate and protect the key performers to retain and to motivate them to help you reinvent.Cut your losses by challenging the status quo, the traditional way of operating, abolish inertia, any spending that does not contribute tangibly to the hotels performance and sustainability. Remove emotion for non-core business, add on to the hotel business. The hotel is the focus… period.
4. Expect a shift in brand loyalty
The traditionally-evolved loyalty hospitality brands that have been enjoyed and invested in over decades will deplete. We will see consumer behaviour shifting the loyalty focus to individuals they know and trust. Give your hotel an individual, a person and a face that resonates with the local community your business is situated within and thereby the extended reach. They will be your flag bearers.
5. Be prepared for Quantitative Easing
QE means that inflation will go up in an already slow economic engine, resulting in the slowed demand getting even slower due to low value against price. Invest time in creating new products that help the customer recover lost value, by doing so the hotel will find greater traction than competition almost always.
6. Engage with your team
Connect with your team in a way that is path-defining. Engage in frank and open conversations with all stakeholders to generate new ideas to reinvent the hotel's operating cycle. Suppliers, customers and third parties will become part of the team if we engage them in the hotel’s story.
Who are we?
The team at EHL Advisory Services is the world’s leading hospitality consulting firm helping clients globally. In these most testing of times we act as the resurrection experts working on the promoters behalf in close coordination with operators to future ready hotel businesses with the present in mind. We help reduce cost, save cash and ensure that you emerge stronger.
We are supporting hotel businesses in the current crisis pro bono as a way of giving back to the industry that supports millions and touches billions making their lives better! This crisis therefor is also an opportunity. Those who stay the same will lose and those who reinvent will win.