For Hoteliers, the COVID-19 Health Crisis May Be an Opportunity to Focus on Technology Improvement

While a drop in hotel occupancy can be seen as a time to scramble for business, it may also counterintuitively give you a breather to finally set up those software integrations that will take your operational efficiency to the next level.
By Larry Mogelonsky, Principal of Hotel Mogel Consulting Limited- 3.2.2020

Living through the 2003 SARS epidemic in my hometown of Toronto, this current crisis is already echoing the pattern of huge occupancy drops while air travel has already been decimated.

I do not have the answers as to how bad this novel coronavirus situation will get or how far the media will go to propagate this panic, but it will inevitably mean that your hotel will experience some ripples that must be addressed. Beyond having an effective cleaning and employee hygiene program in place, there is perhaps an opportunity for you to expand how your property utilizes technologies in order to ensure any business interruptions are minimized.

Let’s start by imagining the worst. Suppose you experience a drop in Q2 of 30 or 40 occupancy points with big group cancellations, meaning that you must decrease your staffing levels accordingly while never sacrificing your service standards. Moreover, even if your property has limited overseas-sourced business, other hotels that rely upon this business will be doing everything in their power to keep their doors open, leading to more aggressive pricing models that will strain your revenue manager to maintain rate.

Already there are several significant opportunities identified where technology can help:

  • Management software for various operations can be deployed to optimize service delivery even during minimal staffing periods
  • CRMs must be effectively utilized by your sales team so that you can reassure groups with incentives to prevent attrition of contracts as they opt for better deals elsewhere
  • Many systems now have offsite access capabilities so that your managers can work remotely if indeed there is a concern about coming into the office
  • Business intelligence platforms will enable your revenue managers to see this rate gouging in real-time and make better decisions as to how to adjust appropriately
  • Video conferencing solutions allow remote team members to join into a group session and are worth promoting for small-scale offsite corporate retreats

While this drop can be seen as a time to scramble for business, it may also counterintuitively give you a breather to finally set up those software integrations that will take your operational efficiency to the next level. And once the WHO gives the all clear and the situation returns to normal, such platforms will allow you to smoothly ramp back up.

But even with great operational support, you still need to find new customers to make up for the revenue shortfalls. And it may even a renewed focus on your local constituency, with your restaurant and spa acting as bright spots over the next few months.

With a nimble focus on local and the short-term, the prudent course is to utilize digital marketing channels like Facebook, Google AdWords and Instagram (for the younger demographics) to see what you can stir up, in addition to any internal paid advertising vectors for TripAdvisor or the OTAs where you have a presence.

Ultimately, this is hardly the death of our industry, but it is a wakeup call. This too shall pass.

We have ridden a pretty strong growth curve over the past decade, but all parties have to end sometime. With the same solutions that have worked in the past less effective in the next few months, owners will be looking to you for frank appraisals of the situation and suitable plans to mitigate losses. This means a steady hand and staying optimistic about how new processes, technologies or innovation can help your hotel stay afloat.

One of the world’s most published writers in hospitality, Larry Mogelonsky is the principal of Hotel Mogel Consulting Limited, a Toronto-based consulting practice. His experience encompasses hotel properties around the world, both branded and independent, and ranging from luxury and boutique to select-service. Larry is also on several boards for companies focused on hotel technology. His work includes five books, “Are You an Ostrich or a Llama?” (2012), “Llamas Rule” (2013), “Hotel Llama” (2015), “The Llama is Inn” (2017) and “The Hotel Mogel” (2018). You can reach Larry at [email protected] to discuss hotel business challenges or to book speaking.

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