David Collins, Co-Founder of The Great National Group, prescribes some possible responses to the current C19 challenge facing the hotel and tourism industry.
Certainty. It’s what companies thrive on and what people depend on. Without knowing where we are in times of crisis, it’s impossible to plan beyond the immediate.
The wake of the 2008 crash was marked by a lack of certainty. And as to the impact? Investment stalled. Businesses collapsed. Consumer spending shrank. Economies tanked.
The ongoing C19 is marked by the same lack of certainty. Where individual countries are on the curve, how long lock-downs will continue for and if you’re lucky enough to survive, what life will be like post-Covid. Life is very uncertain at the moment. One thing though that is certain is that what we’re seeing now is becoming the new normal. Some of it’s good, some not so good e.g., scaled up investment in healthcare vs. increased State monitoring.
Typically one of the first industries to be hit in times of crisis is tourism and travel. And this is no different. According to the World Travel and Tourism Council, the sector could shrink by up to 25% in 2020: take hotel occupancy in some of the world’s leading tourist destinations, London is down 22%, Amsterdam 25%, Paris 31% and Athens a massive 45%.
These are seismic declines which have happened literally in weeks, not months or years, and follow on foot of an already brittle EU economy which had already been bludgeoned as a result of 3 years of BREXIT negotiations and recriminations. (Remember BREXIT? And we thought that was a challenge.)
It’s at this point I would typically and bullishly reassure colleagues in the hospitality business that we will recover, that business will rebound, that the UK and Irish tourism product is second to none .. And all this is of course true. However what’s different here to the last crash or SARS or foot and mouth, is the scale and speed of the economic collapse and more critically, the level of mortality and bereavement folks are having to endure. Indeed the emotional toll should not be underestimated so any ‘rush’ to get back to normal needs to be both measured and respectful.
As an industry, we are marked by our empathy. Tourism is a ‘people business’ so personally I have no doubt that hotels will stand up to the mark here. And indeed some already are. Just look for example at the hotel owners across Ireland and the UK that for example have offered their properties to the health authorities for re-purposing as step-down facilities .. or that have operated catering services for vulnerable neighbours .. or that have offered free car parking to front line staff in adjacent health facilities. All brilliant and worthy initiatives.
As to the rebound and the new ‘normal’ .. just a few thoughts.
Do the right thing.
This crisis has brought out the best in some businesses. Others less so. But those businesses that have stood by their clients will – and rightly so – be rewarded with an enhanced level of loyalty amongst their client base. So if you’re a company with clients – and who isn’t – do the right thing and don’t take advantage of peoples’ misfortune. Exceed expectations. Go above and beyond. Be the guy or gal in the room that wears the ‘white hat’. And this goodwill will come back to you .. call it ‘corporate karma’.
Ireland and the UK – one ‘staycation’ destination
I’ve mentioned Ireland and the UK in the same breath for a reason. Not just because the Great National Group comprises valued hotel clients in both countries but because of the unique relationship we have with each other as neighbouring States .. case in point, 40% of tourism into Ireland comes from the UK while 43% of Irish beef ends up on British dinner plates.
Ireland is not seen as a foreign destination by UK tourists and vice versa. Even despite BREXIT. And this is an opportunity that should not be under-estimated. International tourism has been wiped out for the foreseeable future: folks simply will not travel long distances, whatever about ending up on a coach for hours at a time. UK and Irish colleagues therefore need to work together and redouble their efforts to figure out how to present both Ireland and the UK as one singular ‘staycation’ destination. Just like the old days.
C19 Insurance Scheme
Covid-19 will also be around for some time to come and one might reasonably expect tactical lock-downs and restrictions on travel post-recovery. This in turn means that cancellations and refunds will continue to be a challenge. With this in mind, and so as to provide peace of mind to both operators and guests, perhaps the industry should consider a sector-wide C19 insurance scheme which travellers can more easily acquire as part say of a booking fee and which readily refunds in the event of a traveller’s inability to travel. With no questions asked.
The behaviour of incumbent insurance providers in refusing to honour travel cover has been nothing short of shocking – plenty of folks with black hats in that sector – and so having a practical, easy to access, user-friendly, cheap C19 travel insurance scheme might just help to ease folks back into travelling .. not a silver bullet in itself but potentially a contributory factor to the upturn.
PPC & Pricing
Finally, on a less macro-level, hotels are well-advised to cease immediately all paid search as there’s just too much ‘negative’ search traffic about such as for example travellers looking for hotel telephone numbers to cancel bookings: you’re wasting valuable budget that you’ll need once green shoots start to appear.
And as for working with ‘bucket-shop’ deal sites .. don’t. You might be tempted by a cash pile but all you’ll end up doing is damaging your hotel’s brand and diluting your yield; do this and your competitors will follow you and next thing, below cost selling, will have escalated throughout the industry which is damaging to everyone .. including customers. If you have to do anything to stimulate demand – although I suspect this will not be an issue as holidaymakers make up for lost time –offer instead added value eg ‘stay Friday and Saturday and get stay FREE on Sunday (room only)’.
One thing is for certain, green shoots will re-appear at some point. So aside from staying safe, minding your health and taking care of those around you, use this as an opportunity to un-think how you would have worked previously and focus on re-imagining your business to help you work smarter and more sustainably. It’s a challenge we all face so you’re in good company.
Now, where did I leave my white hat?