Hotels around the globe are facing what might be a challenging situation of reopening or ramping up business after COVID-19 closures. The openings are not traditional openings, and there might be little to no sense of celebration. Yet, there should be. A hotel’s approach to reopening could determine its place within its market and competitive set for the near to mid-term.
Making the right decisions and adopting the right tactics early on will give strategic hotels an edge in reopening or ramping up business. Hotels might find it difficult to plan when many properties globally are still unclear on when they can reopen. And hotels might be unclear on accurately forecasting reopenings when historical data for 2020 is effectively null and void.
Unlike other hotel disciplines, revenue never closes because the long-term forward booking window is always active, and this needs to be carefully managed. Even if a hotel is still closed or running on very low occupancy, there is work to be done.
It’s never too early to plan ahead.
Hotels now need to get back to actively planning, even if those plans have to change further down the road. By having the ability to plan and forecast, hotels can not only optimize rates but can also optimize operations. Accurate staffing levels, ordering perishable inventory, and—for larger hotels and resorts—being able to plan a phased reopening strategy by building in a spread-out campus can all have an impact on the bottom line. But these can only be achieved if a hotel is planning ahead and can predict where demand is coming from. Being able to recognize demand sooner, and act on it, will set a hotel apart.
Hotels now need to reset their mindset to the fact that demand is back. But hotels need to be able to identify the new, shorter booking window and people’s willingness when it comes to prepaid bookings.
Hotels need to be flexible and offer fair cancellation terms because there are consumers willing to book and pay in advance. Now, a hotel’s cancellation policy can change to take a one-night deposit rather than payment for the full booking. Offering a choice between a refundable or a non-refundable rate is not enough right now. Look at offering a credit against a future stay, offering alternative dates, or an alternative property if a hotel is part of a cluster or group.
For some properties, projecting a full recovery can be a difficult task while demand remains volatile. Understanding how a hotel is pacing for farther out against ST2Y or ST3Y, reviewing lost business, and comparing booking windows to previous years are good places to start.
