‘When facing the unexpected, the best option is always to start with proven strategies’ – hoteliers are urged to go back to basics to weather current global crisis... and personalisation and service are key

26 March, 2020

We are all in a state of uncertainty, but hoteliers especially have many reasons to feel uneasy about the future. A rapidly developing health crisis and fears of an economic recession are understandably fuelling their anxieties. First it was event and flight cancellations impacting their occupancy; now quarantine, self-isolation, and increasingly now, national lockdowns mean reservations are zeroing out.

It is a critical time, especially for smaller private accommodation providers, and with little knowledge when the current crisis will end it means it is especially hard to make those critical business decisions to safeguard their futures.

"When facing the unexpected, the best option is always to start with proven strategies and tweak them based on the best available information at hand," says James Gancos, CEO and founder of The Guestbook, the rewards programme for independent and boutique hotels.

The company has teamed-up with Fuel, a software provider and digital agency for the hotel industry, have to release a new white paper addressing the economic challenges facing hoteliers in the coming months and how they can weather them.

The informational white paper ‘Navigating Troubled Times’, explores key strategies that hotels can use to stay focused on what matters and avoid common pitfalls during strained economic periods. It is based on feedback from guest surveys, which has been combined with expert insight from the hospitality industry's leading digital marketing and guest loyalty professionals.

What is more, Mr Gancos says the reference text can be used after the market returns to normalcy in order to “reduce hoteliers' reliance on OTAs and plan for future periods of economic hardship”.

The report highlights that whenever an economic downturn hits and regardless of its reasons, hoteliers instinctively turn to two well-worn options when attempting to minimise booking losses: OTAs and working to slash rates. It says that “perhaps nothing could do more to make a bad situation worse”.

While OTAs will seemingly maintain a somewhat steady flow of bookings, “their high commissions in fact leave hoteliers with very little revenue during a time when such financial resources can make all the difference in business survival,” according to the report.

Likewise, the report highlights that cutting rates merely “motivates competitors to do the same” and results in an “inevitable downward spiral of rate slashing” that leaves virtually everyone “financially worse off than when they started”.

The whitepaper suggests that personalisation can be the key tool for success for hoteliers at this challenging time, providing guests with added value and strengthening direct relationships, including prior to, during and after a guest’s stay.

“From offering incentives and personalising experiences to diversifying booking source traffic and turning to local markets, hoteliers can take control of their relationship with guests to ensure that their business can withstand whatever economic troubles come their way,” explains the report.

The report’s recommendations, include: presenting guests with added value when times are tough; using data to maximise value with experience personalisation; diversifying traffic sources; optimising websites and booking engines; never overlooking the value of local markets; and ultimately be resourceful to create demand and attract guests. If none of these prove successful then properties can leverage such time to examine what areas of the hotel need to be refreshed and can perform renovations without the risk of inconveniencing guests.

Just as important, the report highlights some of the common pitfalls that can make matters worse, especially as businesses can be susceptible to panic and knee-jerk reactions when suddenly faced with a scenario that puts their livelihood at risk. “More often than not, uninformed attempts at simply cutting costs can cause more damage and result in even less bookings and profit,” it explains. These include that “advertising is your friend, not your enemy”; you should “never cut back on services that form part of your ability to provide an enjoyable stay”; and to “resist the urge to lower your rates”.

It’s certainly easy for hotels to let their guard down when times are good and bookings keep flowing in, but as recent events continue to remind us, nothing lasts forever and markets are always vulnerable to sudden change due to any number of reasons.

At the beginning of the year, perhaps not even just a month ago, nobody would have predicted where we are today. To ensure they are still here tomorrow, the report concludes that hoteliers must ultimately “treat each guest as an individual with unique needs, identify what those needs are, ensure that the resources are there and that guests are aware that they exist”.