how-hospitality-sector-is-adjusting-post-pandemic-recovery
Article

How the Hospitality Sector Is Adjusting for Post-Pandemic Recovery

by Narges Attaran, Ryan Prindiville
April 29, 2021

To position themselves for a sustained post-COVID recovery, lodging operators are making a variety of changes to their facilities, processes and business plans. Operators are adjusting cleaning and check-in procedures, promotions, food and beverage operations, meeting spaces, staff training, back-office systems and standard operating procedures to reassure and attract travelers and meeting planners.

In this environment, agility has become increasingly important as operators, property owners and investors adapt to shifting conditions and seize emerging market opportunities. The following are some of the key focus areas to help operators meet changing customer expectations.

Security and Hygiene Measures

Given the nature of the COVID-19 pandemic and the resulting travel restrictions, room cleaning and facility sanitation have become critical concerns for travelers. According to Amadeus IT Group, two-thirds of surveyed travelers say cleanliness is more important than cost and location when considering a property.

These concerns are also an opportunity to demonstrate your property’s commitment to guest safety.

Beyond obvious measures such as disinfecting rooms and common areas thoroughly on a regular basis, consider expanding the use of contactless check-in and room selection technologies. These smartphone-based technologies were being deployed on a limited basis before the pandemic as a cost-saving measure, but adoption has accelerated rapidly in the rush to demonstrate hygiene and safety.

Accor, Hilton, InterContinental Hotels Group (IHG), Marriott, MGM Resorts and other operators are expanding mobile check-in programs to include digital keys and other app-based amenities. Guest expectations are increasing for a mobile-first experience, like having the ability to customize elements of their stay to choose how often towels, soaps and other consumables are refreshed, and to request amenities via their apps.

Related digital key technologies allow guests to use an app to enter their rooms as well as the hotel pool, fitness center and other access-controlled facilities within the property. Further digital efforts include enabling apps to control lights, TV remotes and other surfaces within guest rooms.

In addition to promoting customer safety and convenience, digital technologies can produce a rich data stream. You can use data analytics to generate insights into how your property is being used and identify opportunities to refine your processes.

Guests Are Staying Closer to Home

One interesting aspect of the pandemic is that as people travel, more are staying closer to home and booking so-called “staycations” in their city, state or region. These short trips, often on weekends, give weary consumers who have been working and holding school in their home all week a chance to explore a different location or to get a change of scenery.

In response, consider shifting the focus of your marketing efforts to reach local and regional consumers. Many properties are offering promotional rates, for instance, that are only advertised in targeted geographies. Properties are also offering to host family events by bundling guest rooms and meeting space to allow families to spend time together and enjoy the property’s facilities safely.

Hotels are also finding new uses for guest rooms. Many are offering room rentals, on a single-use or monthly membership basis, for workspaces or creating coworking facilities in otherwise-unused meeting rooms and event spaces.

IHG, for instance, is converting lobby spaces to offer single-user workspaces as well as small meeting areas for up to four users. The intent is to provide working areas outside of homes or offices, and to generate revenue from space that would typically remain unused during the day.

Promoting Value and Loyalty

Price promotions are a natural and understandable response to pandemic-related drops in demand, but be careful to avoid a pricing race to the bottom that undermines your profitability and brand image long term.

Loyalty programs are an attractive tool for luring back and retaining pre-pandemic customers, and many operators and hotel chains have taken measures such as extending the expiration date of loyalty points, or making other adjustments to make the programs more flexible and convenient for guests.

Many properties are also adjusting their marketing strategies to focus on local and leisure travelers, and stressing the safety and wellness benefits of their property. It's generally more effective to highlight the value a property offers, such as using local expertise as a point of differentiation, instead of competing strictly on price.

Consider adjusting your booking and cancellation policies to offer greater flexibility to travelers concerned about potential restrictions. According to a GlobalData survey, 56% of global respondents are concerned about domestic travel restrictions. As a result, a family may be more willing to book a stay three or four months out, for example, if they have the ability to cancel their reservation if COVID infection rates change.

It’s also important to communicate the measures you’re taking to promote safety, hygiene and wellness in a variety of ways. This may include, for instance, facility signs, promotional emails, social media and videos on your in-room property channels.

Other hygiene-related steps include placing stickers across guest room doorways to indicate the room has not been entered since its last disinfection, and explaining your procedures to potential guests on your website and in marketing materials.

Upgrading Operations

In addition to promoting safety and hygiene, a growing number of properties are upgrading their core technologies, such as deploying new inventory management software to optimize bookings and promotional offers. Integrating your revenue management system with third-party data sources can provide insights into local and regional trends to help you forecast demand more effectively and adjust your promotional pricing if necessary.

Similarly, automation and shared services arrangements can help you streamline back-office operations to reduce cost and increase efficiency. Functions such as accounts payable processing, revenue management, marketing, payroll and other operations are common candidates for outsourcing, automating or consolidating within shared services centers for multiple locations.

Automating daily, weekly, and monthly reports and P&L statements improves the accuracy and timeliness of financial and operational data, and allows management to make more-effective decisions.

Meeting and Event Spaces

With in-person meetings and conferences canceled in 2020, consider how you can optimize the use of your event spaces as groups begin to gather again. Meeting planners will expect facilities to be flexible and responsive to their needs, such as enabling social distancing for in-person events, or to provide technology that supports hybrid events that blend in-person and remote attendees to create an integrated experience.

Food and Beverage

Similarly, hotels are making physical and procedural changes to their food and beverage operations. Tables are being spaced further apart, and many properties are adding outdoor dining to patios and other areas. Many are expanding the use of takeout and packaged meals, swapping printed room service menus for in-app ordering, and redesigning event dining to accommodate large groups quickly and safely.

Some hotels are using kitchen facilities as ghost kitchens that prepare meals in partnership with delivery services to generate at least some revenue.

Long-Term Design Changes

For the medium and longer term, consider how the physical layout of your properties will have to change to meet differing consumer expectations. Common areas, for instance, will depend less on the interaction of large groups of people and will need to be adaptable to allow small groups to interact safely while maintaining distance from others.

Hotels are also revising the use of furnishings and carpeting within their properties, such as replacing guest room rugs with easy-to-clean luxury vinyl flooring. Many are also creating outdoor work areas and social spaces that allow guests to take advantage of daylight and fresh air while remaining productive.

Staffing Shifts

Staffing is another critical area to examine, such as adjusting hiring to meet new use patterns and offering safety training, protective equipment and scheduling flexibility to your employees. Consider how to meet evolving guest expectations of quality service while reducing staff contact and interaction.

Taken together, these adjustments and evolving market conditions represent significant operating and business model changes for hotel owners, investors and developers. Careful market analysis, upgrading systems capabilities and increasing organizational agility will join attractive properties, popular locations and outstanding customer service as keys to success in a post-pandemic hospitality industry.

Stay In Touch

Sign up to stay up-to-date with the latest accounting regulations, best practices, industry news and technology insights to run your business.

Author
Resources
Related News & Insights
The Bridge BOOtique
Live Event
Join us for an evening of shopping while supporting nearly 50 local, women-owned businesses.

October 27, 2021 | 02:00 PM - 06:00 PM PT
VIP Networking Event at Topgolf
Live Event
Swing by for an evening of conversation, cocktails and food with fellow Dallas nonprofit leaders.

October 14, 2021 | 03:30 PM - 06:30 PM PT
Armanino’s VIP Event at Community Summit
Live Event
See you in-person alongside your Dynamics peers in Houston!

October 13, 2021 | 04:00 PM - 06:00 PM PT