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Don’t cut your hotel rates

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Think
positively

While this situation is painful in the meantime, and there will be curveballs ahead, keep in mind that it is temporary.

In the age of COVID-19, it seems that no sector has been spared from the economic effects of this crisis — least of all, hospitality. As stay-at-home orders have been put in place and travel has come to a halt, hotels and resorts worldwide are facing unprecedented challenges.

Remember, the hospitality industry has recovered from crises in the past.

While the scale of COVID-19 may be far greater than the crises the industry has faced before, it is still worth remembering that hospitality has come out on the other side of many challenges that felt near-insurmountable at the time. The responses to 9/11, SARS, the Great Recession, Ebola, Zika and other crises illustrate the industry’s resilience and adaptability.

What’s more, long-term profitability remained largely unaffected in the years that followed those challenges, and history has shown that a full recovery can be expected — not tomorrow, of course, but possibly sooner than you’d think.

Hotels can take steps now to position themselves well for the rebound.

Hotels don’t need to paralyze all operations while they wait for this to pass. In fact, there are actions hoteliers can take right now (as well as things they can purposefully avoid) to set their properties up for success in a post-coronavirus world. When it feels like there’s not much we have control over these days, getting ahead can offer a much-needed sense of forward-thinking strategies.

First, avoid the temptation to cut your hotel rates. Not only is this unlikely to increase occupancy (after all, people who aren’t travelling regardless won’t be incentivized by price cuts, no matter how good the deal is), but it can also be very difficult to bring hotel rates back up after you’ve dropped them. Instead, consider other ways to add value to stays, such as offering complimentary parking or additional room nights.

Second, don’t abandon all marketing efforts. Research has shown that hotels that continue their marketing efforts during a downturn outperform hotels that don’t keep up with them, both during and after the downturn.

This is also a good time to take advantage of cost-per-click rates, which are as low as ever. Get ahead of this, and you can nab very inexpensive clicks to try to drive business when travel picks back up.

When this passes, global wanderlust may be higher than ever.

Marriott CEO Arne Sorenson may have put it best: “While this is still guesswork to some extent, we know one thing with confidence — this will pass… and when it does, the impact on our business will quickly fade.”

So, while this situation is painful in the meantime, and there will be curveballs ahead, keep in mind that it is temporary. And once the dust has settled, industry insiders are hopeful that the demand and appreciation for travel will be even higher on the other side. As they say, we always want what we can’t have. So for those bound to their homes for the time being, the opportunity to finally get out and explore will likely be more tempting than ever.