We’ve compiled learnings from across the globe so you can have information that offers immediate recommendations for the questions you have today, and practical plans to prepare for the rebound.
First response: Cancellations
Should I be relaxing cancellation policies?
The waiving of cancellation fees is widespread across the industry for hotels, OTAs, and airlines. It will help to ensure vital guest satisfaction and future loyalty by offering empathy through flexibility.
How do I manage mass cancellations?
Start by acknowledging your customers’ reluctance or inability to travel now, and do your best to reschedule their stay to a time that’s more suitable for them. When this crisis eventually passes, people may be more willing than ever to travel.
When travellers insist on cancelling a reservation, an option that some airlines and hotels are taking is to offer credit, rewards points, or vouchers for future stays. This way you can confirm future spend at your hotel from travellers who are currently restricted.
What are my cancellation obligations for OTA bookings?
Many online travel agents (OTAs) are updating their cancellation policies as the events surrounding COVID-19 are unfolding. Their policies may impact your cancellation obligations. Regularly check for updates from your connected OTAs and booking channels to be informed when responding to guest queries on their cancellations.
Some reference points for top OTAs:
- Booking.com – Important information regarding the Coronavirus
- Expedia – Customer service update on COVID-19
- Airbnb – Answers to your hosting questions about the Coronavirus
- Forbes – How online travel agents are responding to Coronavirus
Revenue management and marketing
Should I employ mass discounting?
No. In the short-term, discounting won’t make much difference, since travellers are concerned about health and safety. They simply won’t book in areas of high risk.
In the long-term it can have negative impacts on your business. People often perceive quality based on price. Selling your rooms too cheap will give travellers the wrong impression and harm your brand image.
An eventual market rebound is inevitable so instead of discounting, focus on conversion. Every touchpoint means more than ever and given favourable cancellation conditions, travellers may be malleable to advance bookings.
- Display clear promotions on your website
- Set-up value-added offers in your booking engine
- Explore new sales avenues via your channel manager
- Monitor your local market and reservation pick-up to make the best pricing decisions now, and when things improve
Strategies for future recovery and alternative revenue
Is domestic or local travel a safe port in the storm?
When an upswing starts to occur, one of the first things to return will be local travel. It will be your best bet to win bookings in the short-term. International travel might be off the table, but some people will still try to get away and ‘staycationers’ should become a valid market.
For a local or domestic traveller coming on a weekend getaway who has foregone their exciting overseas trip, try tying some tickets to local attractions into a three-night stay package for example. In the event that these are closed, consider putting together an itinerary to visit the perfect picnic spot, nature walk, or self-guided tour. It won’t replace their international holiday, but at least they are getting an experience.
Even if you are a hotel that normally accommodates business travellers, it could be worth targeting domestic leisure travellers. It will take some adjustment to your messaging and sales offer, and it will be helpful to connect to new third-party channels.
After times of great stress, people naturally want a break. Coronavirus is impacting everyone but large portions of the general public will still be dreaming of the trip they want to take when the emergency has subsided. Once you get the chance to take a breath and look ahead, think about what opportunities you have.
Should I utilise new sales channels?
When something is severely restricting travel for large amounts of the world’s population, the need for your property to diversify is greater than ever. It might be time to look for different markets and connect more third-party channels to increase your chances of finding guests who are still willing to book your hotel moving forward.
Some niche considerations:
- Has your property and location got the style and flair to attract couples seeking a boutique, luxury experience? Consider connecting Mr and Mrs Smith.
- Do you meet the criteria to be listed with Airbnb?
- Do you have key selling points for travellers seeking unique experiences and adventures? Explore tablethotels.com.
- Do you want to target people needing an escape to a beachside location? Look into Onthebeach.co.uk.
- Can you accommodate travellers who want to bring their pets, with a channel such as Petspyjamas.com?
- Are you attractive to sports fans, such as surfers? Visit surfholidays.com.
Change presents the opportunity for you to explore new markets or segments beyond your historical market preferences.
Do I try something new?
This is where you need to work smart and get creative on promotions, packages upselling/extras, ancillaries, and amenities.
Double-down on ancillary revenue
Offer guests special services you can charge extra fees for. For instance if you use local produce in your kitchen, make a basket of this available for purchase – local cheese, wine, fruit etc. Another option is to provide pick-up and drop-off services if you don’t already.
Be as unique as you can when thinking of ways to boost bookings and revenue. Any hotel can offer a free extra night so try to stand out from what your competition may be doing.
If you need some inspiration for ‘outside of the box thinking’ to boost brand reputation and recognition, or raise funds, here are some examples:
- Cadence B&B in Taranaki, NZ, has become an isolation haven for those in need. Self-isolating for two weeks at Barker’s property will cost you NZ$1220 for up to five guests. The owner of the property has stated 25-30% of these bookings are via Airbnb.
- A Facebook page with close to 1000 members has been created where incoming travellers can connect with suitable accommodation. The website Self Isolation Rentals has also been set up for travellers to browse their options.
- Astor House Bed and Breakfast in Green Bay, Wisconsin, has found success by lobbying local and state elected officials for government funding and support. It says all small properties should reach out to local officials.
- Properties in Singapore are rolling out a variety of staycation options
Provide incentives for length of stay increases
Capitalise on existing guests by getting them to stay an extra night or two. Depending on your budget, you may throw in some free extras or upgrades, or exclusive deals on amenities; anything that will add value and make the additional night(s) worth it. For example, a free massage and spa for an extra night’s stay. If your occupancy is down, this small revenue boost will be worth it.
Tailor specific packages
If you’re required to market to a new or niche market, build an offering that’s relevant and interesting to them. You wouldn’t offer your standard business traveller packages to a leisure traveller. During these stressful times perhaps a massage or meditation package could appeal to those seeking wellness experiences.
Using downtime effectively: Optimise internal processes and staff capabilities
Once you’ve done everything you can to action immediate concerns, it’s a good opportunity to look inwards to optimise processes and increase capabilities as you prepare to hit the ground running when things recover.
How can I increase the efficiency of my business?
- Are there administration processes that are clunky or outdated? When business picks back up it could come with a rush and will help you need to be ready.
- Should you re-evaluate your services and policies? Take the time to look at where you’ve received negative feedback in the past and see how you can rectify it.
- Do you have a loyalty program in place and is it adequate? Loyalty could be more valuable than ever when market demand recovers. The guests you bring in need to feel valued and have a reason to come back.
Using downtimes to streamline and prepare your business for the future is always a good thing. It’s never been more important to set yourself up for future success.
- Be flexible on cancellations
- Ensure the safety of staff, guests, and property
- Avoid mass discounting
- Maintain marketing for a rebound
- Optimise internal processes
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