5 Ways to Thrive in the post COVID-19 Hotel Market

Content Overview Context

1. Safety Standards

2. Digital Presence

3. Ancillary Services

4. Pricing Strategy

5. Marketing Expertise Conclusion

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The COVID-19 outbreak is bound to have lasting impacts on the hotel industry. While hotels are busy keeping their head above the waterline in day to day operations, we took a look at the five most meaningful long-term measures they can take to better adapt to the new status-quo. First, we examined how safety standards can make a difference and put your hotel back on the map for many cautious travelers. Then, we analyzed the importance of digitalization in the context of the COVID crisis. We also put forward an ideal level of digital presence all hotels should strive to achieve. Subsequently, we introduced a new type of service hotels can use to diversify their offer thus catering to a more local clientele. Finally, we discussed different approaches to emerging marketing and pricing strategies in the light of the new post-COVID environment. Along the way, we discussed how PrivateDeal can help achieve these key strategic issues.

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Your PrivateDeal Team www.privatedeal.com contact@privatedeal.com

Overview

Context The COVID-19 tsunami The coronavirus has swept through the travel industry like a tidal wave and left scars that are bound to mark our sector for years, maybe even decades. Below, we listed some of the immediate consequences of the COVID-19 outbreak, which some are already calling more than twice as impactful as the Great Recession (2018). As a hotelier, you have most likely had to make hasty and difficult choices to shield your business from the crisis, involving a level of urgency often leaving you with your nose to the grindstone, unable to craft a long-term strategy. However, even though the top priority should obviously be keeping your business afloat, it is impossible to achieve a lasting recovery without thinking ahead about the future of the industry. And once we reach the light at the end of this tunnel, which is unlikely to be any time soon, hotels that are unable to adapt to this industry rebirth could risk heading straight out of the frying pan into the fire. To help support hospitality professionals adapt to this brand-new world, we worked on five key strategic points hotels should focus on and listed concrete measures they can take in order to stay ahead of the competition.

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Global Revenue and Occupancy drop

75-90% Revenue loss Marriott Worldwide

Chain Reaction of bankruptcies and massive layoffs across the industry

Up to 4 million layoffs during the crisis 10-15% of hotels set to close in the US

People are either scared to or cannot travel

25% of tourists don’t expect to travel before 2021

Solutions 1. Safety Standards As we are starting to see what the post-COVID-19 world will look like, the travel environment will have to undergo major regulation changes to ensure a lasting recovery. Concretely, new hygiene measures such as the use of face masks and the need for sanitizer dispensers imply that you should already be looking at securing adequate equipment and supplies for your hotel. In order to respect social distancing, you might also want to take actions such as setting up marking tape on the floor and plexiglass shields at the reception desks. Keeping a close eye on the evolution of your country's legislations will be key to making sure that your hotel is able to open safely and on time. Moreover, the post-COVID-19 environment will bring about new values and social codes. In addition to being more careful regarding hygiene and safety, guests will want to avoid human contact as much as possible. Effective communication will be essential to assure guests that your hotel is doing everything to keep them safe and healthy. Going the extra mile by training your staff to stay on top of these new norms will go a long way to show that your hotel aims to provide the best possible service. Finally, in order to show that your hotel respects all the standards prescribed by the local government; you can apply for a COVID safety label. This is a very effective signaling tool, reassuring future guests that they will be safe staying at your hotel. By failing to do so, you would miss out on an opportunity to comply with the newest health standards. This constitutes a slippery slope, both because you are less likely to attract new guests and because your hotel might be forced to close in the event of an internal coronavirus outbreak Remember to stay in line with the latest safety procedures and adapt your hotel’s amenities and training programs to that effect.

Different safety standards labels from around the world

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Solutions 2. Digital Presence Since the COVID-19 hit, digital reservations have become an even bigger fraction of the overall booking volume. As we see travel agencies closing one after the other, we can easily understand that traditional ways to book hotel rooms, which were already very much on the decline, are now doomed. Eventually, digital bookings/reservations will take over the whole hotel booking market. In order to take advantage of this status-quo, you should absolutely use all available resources to optimize your hotel’s digital footprint. We illustrated and commented below on what your digital presence should look like:

Within your internal digital circle are the tools and platforms you have the most control over. These are also your most valuable booking channels as they are almost commission-free. As such, you should aim to optimize your communication across these platforms (via an active social media schedule for example). Between all these mediums, your hotel website is key to attract and retain direct customers and is therefore where you should allocate as much effort as possible. The external digital circle is a necessary evil to expand your online presence. While most of the OTAs take outrageous commissions for each booking, it is still important to register on these platforms to extend your hotel’s reach. Review websites such as TripAdvisor are valuable as well since they can enhance your reputation and inspire trust in your online prospects.

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Solutions 3. Ancillary Services The COVID-19 pandemic has drastically altered customer expectations, both when booking and staying at a hotel. Hoteliers are being forced to adapt to better rebound. City hotels are particularly affected by these changes, especially due to the slowdown in business travel as well as an absent foreign clientele. A swift reaction incorporating those shifting demands is necessary. Some of the new needs include the reassignment of hotel rooms as ephemeral offices (home offices) or escaping urban crowds by booking a short stay during the day. In addition, the industry must now look to cater to a new local clientele, unable to fly abroad and interested in services integrated into hotel establishments.

Such services include spas, swimming pools, fitness rooms or even conference/meeting rooms. To better help hotels adapt their offer to this emerging demand, PrivateDeal offers day-use feature that allows hourly room or service booking and is available directly on hotel websites.

This innovative model affords customers the opportunity to book a room or service online for a short period of time during the day and pay based on the number of hours spent in the establishment. Behind the scenes, the hotelier has the freedom to choose which rooms and services he wants to offer for sale for day rental, for which duration and under what price conditions (fixed prices or flexible prices in smart negotiation).

Offering this innovative kind of day-use service allows your hotel to cater to a whole new type of client, sensitive to a new range of customer experience. They are also an excellent opportunity to optimize your hotel’s profitability while staying close to your guests’ needs.

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Solutions 4. Pricing Strategy Revenue Management has always been a key strategic topic for hotels. Years and years have passed, and Yield strategies have become better and better at optimizing hotel room prices. However, the COVID-19 outbreak wiped out all our previous knowledge of the market and no one knows how to position their rates in this this world riddled with uncertainty. It is easy to understand that current hotel guests are definitely not ready to pay pre-pandemic prices, but it is much more difficult to pinpoint exactly where the perfect rate lies. Indeed, the main issue is that it is impossible to identify guest demand, as it can highly vary depending on the time-period, external factors, and the customer’s willingness to accept restrictions. This is where PrivateDeal comes in. PrivateDeal’s solution allows you to calculate precisely the price your clients are ready to pay to stay at your hotel for any given time. This psychological rate is dynamic and constantly adapts depending on the current level of guest demand. You can find out more about it on our website: www.privatedeal.com By introducing flexible pricing, you also add a whole new layer of personalization to the guest journey. This kind of unique customer experience is another great argument to communicate with your clients/prospects as it demonstrates that your hotel can think ahead of the competition. In order to achieve a perfect pricing strategy, you would need to take into account both the supply-driven model and the new demand-driven approach PrivateDeal introduces.

Old Supply-Driven Model New Demand-Driven Model

• Adapt based on competition’s rates

• Adjust according to internal data • Fixed Pricing

• Listen to guests’ budget • Focus on the customer’s journey

• Flexible Pricing

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Solutions 5. Marketing Expertise Based on the growing fear amongst travellers in these troubled times, we can deduce that attracting new guests in the future will be no easy task. This huge shift in mindset will require heavy lifting on the part of the hotel to rekindle the need and desire to travel. Instead of only advertising on the web and expecting sales to magically rise, business owners will need to activate their current customer data base through direct marketing. This means taking matters into your own hands through, for example, emailing campaigns to restore trust amongst your guests. In order to achieve this goal, you need to think about the right message to address your clientele. Its content will depend on your hotel’s strategic positioning but will likely include words on safety and inspiring sentences to restore your clients’ desire to travel. Furthermore, there is a big probability that OTAs will not be as prominent as they were before the crisis. With many of the big players handling the situation rather poorly, a new confidence low-point has been reached between OTAs and their customers. Thinking ahead, this could imply that hotels will not be able to rely as much on OTAs to fill their rooms as before. This challenge might also serve as an opportunity to diversify your booking strategy. Once again, hotels need to take back control on that end and have a clear strategy when it comes to direct bookings in a post-COVID-19 world. If you are looking to increase your prospect data base, PrivateDeal can help multiply your data collection by up to seven. Since the solution registers every client’s offers, you get access to email addresses of users interested in your hotel but not quite ready to book yet. Moreover, PrivateDeal can also assist you in delivering these campaigns through the appropriate mediums to optimize your reach. Don’t hesitate to get in touch to know more! Below, we listed a few digital tactics that are the most suited to improve your sales:

Social Medias Medium: Instagram, Facebook

Search Engine Advertisement Medium: Google, Bing

Emailing Medium: MailChimp, HubSpot

Automated Lead Generation Medium: PrivateDeal

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Conclusion In this paper, we saw how the COVID-19 tsunami wiped out a lot of the old ways of thinking about hotel strategies. In the face of one of the biggest crises in recent memory, the hospitality market needs to rethink how it operates and build anew. We suggested a few pathways hotels can take to start thriving in this brand-new world. In the long-run, hoteliers will need to adapt to fit the new status-quo and forgo any hope of going back to “normal”. The expression “new normal” is being thrown around a lot lately, echoing that feeling. However, the new normal in the hotel industry is not what we are currently experiencing: it is what hoteliers choose to do with what they are being given. Aim to be part of this new normal by thinking like a visionary and making bold moves to adapt your hotel’s strategy. As closing thoughts, we would like to quote Andy Grove, the co-founder of Intel, who said in 1994: “bad companies are destroyed by a crisis, good companies survive the crisis; but great companies are defined by a crisis”. Make sure your hotel is part of the latter.

Contact

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