Coronavirus Crisis Resources
Our beloved hospitality industry has never faced these types of challenges. At Dragonfly Strategists, our team is keeping a pulse on the rapidly changing conditions. Most importantly we hope that all of our clients, associates and partners are staying safe and healthy. We’re here to help our clients navigate these challenges and be poised to re-enter the market in a position of strength when the crisis concludes.
“In every crisis, doubt or confusion, take the higher path - the path of compassion, courage, understanding and love.”
Best Practices and Recommendations
We remember the crisis of 2008/09 and 9/11 and how it impacted the industry. Our team is also attending industry webinars from trusted partners like HSMAI, STR, Cleveland Research and more to keep on top of the latest data to make informed decisions. Here’s some things we recommend:
1. Don’t slash rates!
Lowering rate doesn’t drive demand. It took years for the industry to build rate back after the last two huge events. That proved to be a worst practice approach. Make sure all offers are competitively priced...but don't run to the floor with pricing. There is no share to steal so don't try to compete on price alone.
2. Focus on more localized demand opportunities.
Shift attention to focus on your drive market, loyalty and residential rates, advanced purchase rates with flexible cancellation policies, employee and friends and family rates and hospitality industry rates. People are canceling international to stay domestic. Reevaluate your geographic targets and strategy. Resort Pass is offering the ability for hotels to do “staycation” promotions…what opportunities are out there like this in your location? Look for out for different opportunities to find new demand - healthcare workers, telco companies, distribution centers, semi-truck drivers, pilots for cargo, drive market, military, families that want to get away together for a change of scenery. Hospitals may get funding to pay for "rest" rooms for their overworked employees. There may be opportunities that we've never had before.
3. Partner with OTAs in any promotions they are offering.
Member-only deal and package paths have seen a positive return in the market recently. Enhancing the package path discounts and additional promotions for members. Consider commission boosters on OTAs for positioning & placement.
4. Offer flexible cancelation policies to customers.
We’ve seen many major brands send out communications with modifications to policies. The majority of hotels and airlines are waiving change fees for any recent travel to be re-booked for dates through the beginning of 2021. This can be tied to a promotion, especially if they will rebook prior to the end of the year.
5. Place flexible policy info on your web site as an alert & promote your cleanliness & health routine for rooms & staff.
Communicate clearly and with transparency. Describe the safety measures you are taking and your cleaning policies. We heard from a Webinar by Cleveland Research that vacation rentals are faring better than hotels…which is truly sad as their cleaning practices are not nearly as thorough as hotel standards.
6. Be prepared with dates where groups can reschedule.
Know when you can accommodate large groups before they call you. You can even do proactive outreach to let them know when you have availability to accommodate the group at a later date, possibly offering an incentive or two to get them to rebook vs. cancel altogether. Encourage rebooking instead of canceling rescheduling. Be ready with dates and offers to get groups to reschedule vs. cancel.
7. Stop all automated promotional emails and social media campaigns.
If you have automated promotions going out through email and/or social media, your messaging will not only be ineffective, it could make it seem like you are insensitive to the crisis unfolding. Keep your messaging and communications relevant to your customers.
8. Review your recession plan.
Last year, the industry buzz was all about a potential pending recession. If you put a recession plan together, now is the time to review and enact it.
9. Can part of your team work remotely?
Consider allowing your administrative team to work from home such as revenue director, sales director, sales managers, etc. See: Motely Fool Remote Working Tips and Time Magazine 5 Tips for Staying Productive and Mentally Healthy While You're Working From Home and Zoom tips for working from home
10. Be sure that you have someone managing to the future.
We will come out of this and we cannot lay everyone off and lose site of the future. Rates, groups, inventory, and systems still need to be managed. If you need assistance, we offer resources to support and supplement your team.
Forecasting
Be realistic with forecasting.
Best practice would be to take a realistic hit at forecast based on what research companies are saying – 30-40% hit in RevPAR appears to be where 2nd quarter may end for the industry. Take a strong look at this and reduce now, not incrementally. You can always raise it back up slowly vs. continuing to take it down day by day.
Don’t require DORs to re-forecast daily.
This would be a waste of energy and time. Enable your revenue mangers to collaborate with marketing team to determine any way possible to shift share or drive some incremental demand for those who are still traveling.
Revenue Management Systems (RMS)
Special events need to be entered to cover this time period.
The systems are not behaving as normal so it needs to be called out as a special event this year and next year as we roll into next year.
Wash needs to be adjusted by segment in order to get pricing inline.
Don’t simply go in and make a bunch of manual pricing overrides. Allow the system to adjust according to wash.
Floors may need to be adjusted downward.
In some markets you might need to adjust the floor so that the system has the ability to price lower if necessary. Seasonal floors/ceilings may not match this year for next year. You will need to monitor this to be sure the system isn’t pricing too low next year.
You will most likely need to do some forecast overrides.
To get more accurate information for next year to be more accurate. We will have to see what happens as we progress to determine more specifically what needs to be done in the systems.
Resources, Articles & Webinars
Hotel News Now Tracking the impact of Coronavirus on travel, hotels
HospitalityNet Coronavirus: Impact on the Hospitality Industry
For Hoteliers, the COVID-19 Health Crisis May Be an Opportunity to Focus on Technology Improvement
We will continue to monitor the situation and add recommendations and resources to this post and on our LinkedIn and Facebook pages. As always, feel free to contact us at any time.
“When written in Chinese, the word crisis is composed of two characters — one represents danger, and the other represents opportunity.”
