by Alex Mavridis, COO
The World Health Organisation has recently classified the Coronavirus Covid 19 as a pandemic, with over 170,000 confirmed cases in 114 nations and over 6,500 deaths reported. The disease is spreading and expected to continue spreading in the foreseeable future. No doubt as you read this article these statistics will be out of date. This is a serious threat to our lifestyles and should not be dismissed as a trivial matter. Even those not directly affected or knowing someone who was directly affected have seen the impact on our day to day lives, with travel being curtailed and more focussed attention to hygiene standards.
We have read the unsurprising reports of drops in worldwide hotel occupancy levels and last minute cancellations of bookings. No market is immune from the effects of the Covid 19 virus although the impact has differed across the globe. STR’s recent report on the immediate impact on Occupancy levels (week on week for 2 March 2020) revealed massive impacts in the so-called hotspot areas of China, Italy and South Korea, with over 70% reductions and much of mainland Europe suffering 15%-25% reductions. In the minor category were New Zealand, Australia, Indonesia and UK with 10% reductions being felt. No doubt this later group has felt more severe wash in the last week and more is expected.
In many instances, global corporate travel policies have kicked in, restricting all but necessary travel and banning attendance at events involving larger crowds. We are seeing the effect in major trade shows and sporting events and last minute cancellations becoming the norm. Event organisers are now taking a longer term view and announcing deferment of events a month or more in advance, with major events around the globe being cancelled or rescheduled.
The UK government is expecting matters to become worse and, in recognising the expected impact of the Covid 19 virus on business, has offered some concessions in its March budget statement.
Our Hotel Solutions Partnership team members are continuing to work from home and our thoughts are with all hoteliers and travel industry professionals as they endeavour to cope with this crisis.
What can be done at the property level?
Now is not the time to panic. The overriding objective has to be the safety of guests and staff. Detailed procedures should be established to help identify and manage issues as they arise, such as guests and staff having to self-isolate. A comprehensive and rigorous cleaning regime and strict employee handwashing/sanitizing is already hopefully in place. Proper protocols for staff to ensure they are not infected by guests and conversely do not infect guests should be established. In some Asian hotels, the temperature of all staff (as well as guests) is taken on arrival and those presenting with symptoms are screened further.
We recommend that hotel managers communicate with both staff and guests the measures being taken to help protect their welfare. If you need to make changes to the way your business is normally conducted as a result of Covid 19, then say so and your guests will appreciate it. Whilst I do get annoyed with flight delays and late departures I never complain if the captain says “ladies and gentlemen we have an issue with one of the engines and are getting the ground crew to check this out so we can get the all clear before we take off”. It is OK to share your concerns and advise what you are doing to mitigate them.
Revenue management at this time will require a different approach. It’s worth ensuring that your team has a more flexible approach to driving business and understands, and where possible predicts, the impact of expected wash factor. In terms of cancelled bookings, a clear policy should be communicated to customers. A vague and complicated process for changing or refunding bookings will be remembered by customers long after the threat of Covid 19 recedes.
Cash flow is now of utmost importance so contingency planning and sufficient time spent managing this is key. Review cost structures and determine what is discretionary, be prepared to make short term sacrifices. Understand how changing consumer patterns will impact you. For example we would expect there will be less communal interaction so room service increases, whilst restaurant demand decreases. It might make sense to close some outlets or pare down menus to reduce food & beverage inventory and to allow staff to rotate as some will need to look after children off school.
Keep your plans flexible. As circumstances change -and they will, you need to update your plans.
In a time of crisis, leadership is key and a focussed strategy to ride out the tough times can make all the difference. Clear and regular communications with your entire team – from front of house to stakeholders – will be appreciated and bring everyone together to work for the same goals.
Hotel Solutions Partnership are thinking of you all – our friends and colleagues in our industry at this time – and stand ready to assist however and wherever we can.