What Can Hotels Do During the Coronavirus to Increase Sustainability

What can hotels do during the coronavirus to increase sustainability

What Can Hotels Do During the Coronavirus to Increase Sustainability?

  • Manage cancellations wisely
  • Do not drop your rates
  • Plan for the future

With the current COVID-19 Coronavirus situation, it has significantly affected many hotels around the world. Whether you are an independent, small chain or large chain hotel, your ability to generate revenue has been severely impacted. For some hotels, especially hotels in destinations that rely largely on tourism, they have opted to close their doors for an unforeseen period to reduce operational costs.

So what revenue strategies should hoteliers be applying to increase sustainability? How can they apply these strategies to get through these tough times for when travel rebounds? After speaking with many industry experts and hotels, we have consolidated a few strategies hoteliers can adopt.

Manage cancellations wisely

With many countries closing borders and restricting travel, your hotel is bound to have a sudden influx of cancellations. The way you handle cancellations might make or break your hotel.

As much as possible, you should try and convince your guest to postpone their stay dates rather than getting a full refund to increase sustainability. Other alternatives include offering extended stay credits for rebooking or free value-added services such as a free airport transfer.

The right communication style with your guests in such situations is of utmost importance. Hotels should not appear to be inflexible and defensive, your guests will understand the situation and appreciate it. After all, we are all in this together.

Do not drop your rates

Firstly, do not panic and drop your ADR (average daily rates). For some hotels, dropping their rates seemed like the best strategy to increase occupancy during these periods. This will only result in bigger long term losses.

“Studies have shown that hotels that are the fastest to drop their rates and who drop their rates the deepest can be the last ones to recover when demand comes back” – Dan Skodol, a hospitality and travel industry revenue management, pricing, and analytics expert at Cendyn

Dropping your rates during a crisis will not create demand for travellers to choose your hotel over another when there is no intention to travel. Rather, hotels should hold their rates and plan future revenue strategies for when demand picks up to be sustainable.

Plan for the future

For every crisis, there is a silver lining. Looking at the bigger picture, demand for travel is bound to return, the only question is when and for which segment first.

“As travel restrictions are lifted or made less restrictive, pent up domestic, individual, non-essential business travel will be the first to return in the transient segment of guests.” – Chuma of IDeaS

With the significant decrease in occupancy, hoteliers should be looking to leverage on this lull period to catch up on improvements that they have always been wanting to implement. It might be that long-awaited renovation, improvement in processes or adoption of new technologies. Hotels would then be able to hit the ground running for when travel rebounds.

One of the many improvements that can be put in place would be the ability to customise your guests’ stay with personalised experiences. Using a hotel upsell tool like KAI can enable your hotel to increase upsell revenue and guest experience through targeted personalised upselling.

Conclusion

It indeed is a very difficult time for everyone in the hotel industry. But based on the SARS epidemic, it’s a testament to how strong the hotel industry can be and how fast the entire travel industry will recover. What’s most important now is making the correct long term decisions to increase sustainability for when travel rebounds.

About KAI

In today’s hotel industry, your guests are looking to customise their stay with personalised experiences. KAI enables your hotel to upsell your guests the right way, increasing revenue and guest experience through upselling via personalised guest journey engagement. For more information, visit gokai.co.

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