This is the second part of our follow-up to our Hospitality and the Coronavirus webinars. The situation continues to change week on week, so we caught up with some of our panelists and industry experts to find out how things have changed and what they’ve been seeing.
We spoke to:
- Thibault Catala, Founder of Catala Consulting
- James Lemon, Founder of The Growth Works
- Kevin Machefert, Director of Sales, Marketing & Technology for Machefert Hotels
You can read the rest of this series here:
Part I: New hospitality trends and developments after the Coronavirus
Part III: The future of hospitality after the Coronavirus
What should hoteliers prioritize right now in order to be in the best position for the future upturn?
James: “The number one thing The Growth Works is doing now is facilitating recovery teams across our clients. Priority one is being really deliberate, actually having a dedicated group and period of time to get together and discuss this recovery, whether that’s a leadership team in a single hotel or people jumping on a Zoom call across regions and functions.
The next priority will be collaboration. Internally, I'm seeing more need for functions to get their heads together than I've ever seen before. It's all very well and good for operations to say: we're going to have a high degree of cleaning. That message has to get out through sales and marketing to give people confidence to come back.
Collaboration isn’t just internal, either: pick up the phone to external experts like Thibault for revenue management or like someone like Triptease for marketing. Now's the time to start having discussions with really good experts because they are seeing more chains or more data sources than anyone else, so you'll just learn a lot faster if you bring in some external expertise.”
We have done a lot of revenue management audits, we have been reviewing the processes, the systems and kinds of reporting – it’s actually quite a good time to do all of these in preparation of business."
Thibault: “It's a quiet time at the moment and that's the right time to update your tech stack, and to look at your different partners and see which ones you can work with to prepare for the future. We have done a lot of revenue management audits, we have been reviewing the processes, the systems and kinds of reporting – it’s actually quite a good time to do all of these in preparation of business.”
Kevin: “First of all, we had to manage our cash flow. We segmented our different travel agencies based on how big, how solvable, and how liquid they were in order to ask them to pay us back as quickly as possible. Then, we operated our two hotels that are currently open on a very low cost approach with people that are multi-skilled. For example, right now our GM is a receptionist, a night auditor, and a doorman.
Only three people are operating a hotel of 52 rooms with 60% occupancy, so we found a new business model in a way. In times of war you need to adapt. We only did this for two hotels, but it does not only cover costs, but also it lets us put a bit of cash on the side in order to pay the wages and organize the cash flows as much as we can.
The supply is going to have to be there in order to create the demand and not the other way around. Demand is definitely not going to dictate supply."
Another thing we're doing is showing projections to our banks. We're basically telling them how we're willing to think out of the box and to reopen before everyone else to capture the small layer of market that will be existing in the coming weeks. We’re showing them that we will need cash flow in order to create the demand because it's not going to be as usual. The supply is going to have to be there in order to create the demand and not the other way around. Demand is definitely not going to dictate supply.”
James: “It's a really challenging time to find the balance at the moment between the next six months, which is monitoring and adapting to new demand, throwing time, effort and maybe money at getting business back into the hotel, versus a chance to accelerate a strategy and move forward some of these bigger priorities.
What could you do in the next six months that will help you bring back revenues, bring back your team and get you to that break even point, but will also let you look back in two or three years time and say, "That was great, we really took a big step forward". Otherwise there's a risk we go huge on high-cost cleaning operations and really obsess about hygiene and cleanliness in the hotel, when actually we were probably pretty clean anyway and in two years time we will never have got back to breakeven.
And that is different for every hotel, for every chain, because it depends what your strategy was before this downturn and what’s your situation right now.”
Who are the guests that hoteliers should target?
Thibault: “First, don't be difficult with the demands of the business that is here to capture, because there's not much of it. So capture whatever you currently do. Then looking at the data, what can you do to attract domestic markets? Identify who's going to book first by looking at the different stages of recovery.
It is going to be about fighting for every room available. New segments are a big priority, particularly domestic and family holidays."
One creative approach I saw was an online discount and packages for people who are tired of working from home because of their kids, so they can work from the hotel instead. This one has been working quite nicely.”
James: “It is going to be about fighting for every room available. New segments are a big priority, particularly domestic and family holidays where they can drive. Hoteliers need to revisit their strengths in their direct channels as well. We're seeing people making tweaks to their website so they can react to what's going on in the local area.”
Kevin: “We're going to work with hotel apps to identify segments we could target. I saw a study from the Ministry of Tourism in France that found that 55% of the people that had plans to travel abroad said they are totally fine with changing their mind and traveling domestically, because they want to help the industry, to consume local, and because they have been scared of traveling elsewhere anyways.
There was another survey in which 70% of people said that the current situation will not affect their willingness to travel this summer. 20% are willing to travel in May, 45% in June, and then 70% from July onwards. So, people are going to adopt new rules, new measures, but they will travel, and they're quite confident in their ability to travel domestic.”
Should hoteliers think about diversifying? If so, what can they do?
Thibault: “When you're running out of cash, people start thinking much faster and they start to think about new creative ways to generate revenue. And I've been actually very impressed by some hoteliers and their capacity to create new revenue streams or options that we didn't think of before: the kitchen, the bar, delivery of cocktails, selling supplies, furniture and arts online, even online yoga classes.”
Kevin: “The one tangible thing we’re doing right now is selling our proven restaurant on UberEats. However, we came up with other ideas for how to communicate differently with different channels, opening a spectrum of marketing. We've done our first online festival, with musicians, because for example on our Instagram, we have about 24,000 people following us.
We're doing online yoga sessions. It's something that's very popular everywhere, so we tried that too. The idea is for marketing to test things digitally, to AB test what works and what doesn't in order to potentially carry that in the real world afterwards. If the festival happened to be a real success, if people want to have more of it, that well perhaps we can host our real first Machefert Festival in October.”
I saw one hotel that put their kitchen on UberEats and was sending out hundreds of meals a week."
James: “Corporate and leisure events could both be worth exploring. On the corporate side, people like meeting packages that you can just book online, for example something that has an F&B package included. On the leisure side, I think events like family reunions are going to come back. I love the creative stuff, there's people sending out wine boxes and personal training. It's only likely to be small, but it's keeping the team engaged, it's learning about what consumers want now and how some of that consumer behavior has changed.
I saw one hotel that put their kitchen on UberEats and was sending out hundreds of meals a week, and in each of those meals they were putting a leaflet about the hotel and a come back and visit us soon offer.
That's hundreds of new marketing touchpoints each week, which will bring people back to the hotel. But the more you can drive it back to your core business, which is selling hotel rooms, the better.”
It’s our goal to give hoteliers all the help and information they need to navigate through this incredibly difficult time. For all of our latest COVID-19 hospitality information, events and schemes, view our COVID-19 landing page.
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