I grew up in the hotel industry and after more than 30 years have weathered many storms, including the aftermath of 9/11 where we saw negative bookings. However, I never imagined I would see the impact which the global pandemic has had on the industry.
While COVID 19 has inflicted a devastating blow which, some say, may take until 2023 for demand to reach pre-pandemic levels, it is fascinating to see how the industry has quickly adapted and evolved.
As part of an on-going blog series, I thought it might be helpful to begin sharing some of my own thoughts & questions about how all of us in the industry might navigate through this next phase of our journey.
Should we expect a long cold winter?
Let’s face it, people want to travel. And I know for a fact that summer 2020 demand for many companies, like Airbnb and VRBO, exceeded 2019 levels. It was a combination of pent-up demand and folks taking road trips.
However, what I also know is that when leisure travel traditionally subsides after school starts back, corporate travel and snowbirds predominantly carry the industry through the fall and winter months. And let’s get real – that just isn’t happening this year. Corporate travel is down 95%, the cruise industry is shut down, so…yes, I believe it is going to be a long-cold winter for the industry.
Sure, there will be some leisure demand driven by families who can work and teach their kids from anywhere. That said, I believe the fall and winter will be the true test of resiliency for the industry.
What do electrostatic sprayers, HEPA filters and a touchless guest experience have to do with loyalty?
Truthfully, I never pondered that before. (And, truth be told, I never thought I would.) But what I also know is this: if you don’t think about those exact things today -- and speak loudly about it across all customer, content and social channels -- your guests won’t book a stay with you. So, thank goodness for imagination and the industry’s ability to take creative action!
Major advances in innovation focused on guest safety, sanitation and mobile technology have been made across the global hospitality industry in a very short time. We’ve even taken the restaurant menu to the mobile device.
While much of this evolution is a direct response to the global pandemic, I believe these advances will survive the pandemic…and they will ultimately become a major component of how we measure customer satisfaction and loyalty.
Questions about whether my check-in experience was “effortless”, or whether I “feel my room was adequately sanitized and environment safe” are now becoming standard measures of overall guest satisfaction.
Don’t expect a cheap room!
For those of us who in the hospitality business back when 9/11 happened, we all know that, arguably, the single biggest mistake in the history of the hotel industry was the combination of dropping rates to create demand while dedicating inventory to the dotcom intermediaries. Since that time, the hotel -- and overall supplier side of the travel industry -- has gotten super smart, and they have made significant progress in building their loyalty programs by offering the best prices through direct bookings.
As bad as the pandemic is, and will be, on the industry for years to come, I don’t think we will see the industry make this mistake again. In the hotel business in particular, I think we’ll continue to see a major push towards direct-to-consumer bookings, and an effort towards pushing ADR to both drive topline and cover the incremental cost of service associated with the pandemic.
Will hotel rates come down?
Don’t hold me to this, but yeah, I think they probably will in some markets. But I don’t expect we will see any desperate measures taken. And I believe the industry will continue to be bullish on driving REVPAR and direct bookings.
Stay tuned. Next, I’d like to explore some major trends we’re seeing as companies are leveraging digital and distributed-workforce models to drive CX.