3 Practical Ways to Help Your Hotel Recover From COVID-19

Road to Recover - 3 Practical Ways to Help Your Hotel Recover From COVID-19

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3 Practical Ways to Help Your Hotel Recover From COVID-19

  • Issue cash vouchers/credit instead of a cash refund
  • Reconsider sales strategy and segmentations
  • Pre-sale cash vouchers and Free vouchers to secure the future business

During the breakout of Coronavirus (COVID-19), tourism is the first industry hit by this pandemic. Many countries imposed strict travel restrictions and some countries issued lockdown orders, airlines cut off most of their flights, more and more hotels chose to stop operation until the end of May or June. Based on the latest research by the World Travel and Tourism Council, there will be a global loss of 75 million jobs and US$2.1 trillion in revenue.

Seriously, yes it will be worse than 9/11 terror attacks and 2008 financial crisis combined. And the effects on Tourism will carry into 2021. 

I am proud to be a hotelier more than ever, as I know many hoteliers are taking no-pay leave and some hoteliers are still accommodating their guests who were stopped by the travel restrictions or lockdowns. 

What can we do in such tough times? COVID-19 is affecting all businesses in unprecedented ways. Preparation is key in such circumstances. You must recession-proof your hotel business and recover from the effects of COVID-19. Here are 3 ways your hotel can prepare for recovery.

1. Issue cash vouchers/credit instead of a cash refund

Hotels are facing a huge amount of cancellations. For non-cancellation bookings, some hotels choose to refund 50% of the prepaid amount or a one-night penalty. In the short term, it looks like hotels are receiving revenue and saving some costs. For long-term consideration, it might not be an ideal solution. It may work during normal circumstances, as you still have other bookings to fill up your occupancy. But in a pandemic crisis, even charging a 50% penalty amount, you are still losing 50% of future revenue. As only a small group of travellers will resume travelling at the beginning of the recovery period.

It is a brand new decision process for travellers whom you have already charged 50% and refunded the rest of their prepaid money. Meaning you are competing for a limited pool of travellers with other hotels.

To aid in hotel recovery and secure bookings that your sales team brought in previously, you should offer a higher face value cash voucher refund option. Once the situation gets better, your guests will only have one question on their mind – When to travel, rather than When and Where. For example, if a guest paid you $800 for a 3-night stay, you may offer a $1,200 cash voucher for future use. Your guest will now be thinking When and How to spend his $1,200 in your hotel.

2. Reconsider sales strategy and segmentations

There is a common understanding that the hotel recovery after a crisis will be the following: Road-trips first, flights later; Domestic first, international later; Business travel first, leisure travel later.

It is a good time to reconsider your sales strategy and your customer segmentations. How to extend your international-guest-only business to cater to potential domestic customers? How to capture have-to-travel business travellers? You will have the advantage when the business travellers are returning to travel if you prepared in advance.

3. Pre-sale cash vouchers and Free vouchers to secure the future business

If your hotel’s business consists of a significant percentage of leisure travellers, you should understand that there are many uncertain factors that will impact a leisure travellers’ decision-making process. When is it safe to travel? Where is it safer to travel? Which offer is worth taking? And many more……

It is difficult or close to impossible in securing any bookings at this point in time. You could possibly speak with travel agencies and let them know you have a good offer and ask them to send over more guests. But it is a long shot, once it’s a good time to travel, guests will restart the decision-making process. 

Why not sell pre-sale cash vouchers to your guests and who are keen to explore your hotel. This will kickstart your hotel recovery even before the crisis is over. Similar to cash-voucher refunds, you may provide:

  • Higher face value cash vouchers at a lower selling price
  • Free Spa or F&B vouchers for guests to claim

It will be very beneficial to those who are keen to travel once the situation recovers. You may add these voucher purchase links into your communication emails to guests or on your social media pages, WhatsApp text messages, etc.

For hotels who are using KAI as your upselling solution, you can create pre-sale cash vouchers in KAI and market them to your customers via emails or Facebook Shop*.

*Only for hotels who use KAI and Facebook integration 

A sign of things to come

But there is a glimmer of hope. China, where the pandemic began, offers a glimpse into the future. Now that the pandemic is reportedly under control and restrictions have been lifted, there are early signs of recovery.

Hotel bookings in China have increased by 40% in the first week of March, according to Bloomberg. While peak daily flights rose 230% from the previous (albeit disastrous) month. Arne Sorenson, CEO of Marriott, says he’s seen initial improvement in his company’s properties in China.

Hotel occupancy in mainland China - signs of recovery emerge for hotel occupancy in 4 weeks

It is time to prepare your hotel’s business in advance and be ready for when tourism rebounds. That includes creating a personalised stay experience for each and every one of your future guests.

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