A look at market factors and business choices that can help speed recovery
We all know that recoveries have always mattered in business as they create opportunities, possibilities, and sometimes advantages. Some of the biggest shifts in market share occur coming out of downturns, when new industry leaders and new business models that leverage technology will have to emerge. Post-COVID, companies will be evaluated and defined by their abilities to balance performance, as well as their capacities for flexibility, innovation, and adaptive technology. They will advance when and where they can and will have to manage all they encounter. Simply, confidence will come through thinking differently and then utilizing the experience to replicate it.
Successful hotel companies will have retained and attracted the top people and built the best experience with real agility, thus creating a competitive advantage and accelerating faster out of the downturn, while others have struggled. What separates the two, and how can you stay among the successful and avoid the pitfalls of the pandemic?
Across the industry, managers, owners, and vendors were challenged with making tough choices whether to layoff or furlough employees, whom to layoff, and what benefits and severances to provide. At the same time, they had to ensure the safety of retained employees, while dealing with workforce issues in challenging union markets.
All in all, managers had to learn to manage under huge financial pressure with tremendous resource constraints yet maintain morale and service levels. Victory Hotel Partners’ approach was slightly different, and management made the decision to work with the company’s teams to temporarily roll back wages during the height of the pandemic with the promise to bring them back and to make them whole. Many of our hands were tied by circumstances out of our control, but our industry’s greatest asset and strength is its people, and we should all want to protect them by any means necessary.
As travel demand declined, Victory initiated creative ways to generate revenue and utilize hotel assets. With large meeting and convention business still at least 18 months away, Victory’s teams focused on generating local and regional leisure travel as concepts such as staycations and other food-and-beverage packages have supported hotel weekend travel. And some hotels have worked with local hospitals to convert part of their hotels to accommodate traveling nurses, healthcare workers, and in some cases, even COVID patient centers.
The work-from-home concept has enabled hotels located in resort destinations to offer long-term discounted room rates to induce guests to convert their hotel rooms into temporary home offices. And as work from home incurs the risk of an unhealthy lifestyle, some hotels have created stay packages with a wellness and fitness component. Typical operational policies also have been amended to create travel, including free cancellation and flexible check-ins and checkouts. As successful properties have realized, the key is lever-aging the asset.
RECOVERY AND OUTLOOK
As the situation remains fluid, other challenges will compel hotel owners and operators to think through various strategies for asset opportunities in the operating model and in the market segmentation. For example, one of the priorities could and should be using social media to develop a new sales and marketing strategy to attract a new segment of customers, a more domestic clientele.
The crisis will eventually be behind us, although not completely, and as such, various stakeholders of the hospitality industry need to prepare operations for when life returns to the new normal. With any luck, the pent-up demand for travel will lead us to some level of stabilization. Recruiting employees, training, maintaining safety protocols, and managing the guest experience are just some of the challenges on the horizon. These things have never changed, regardless of the challenges faced. Successful hotel industry owners and operators have adapted and grown more resilient and innovative during the pandemic, and they’re now better equipped to navigate the next crisis.