Expert’s Voice: Hoteliers should use local partnerships to boost cash flow
With creative thinking and new partnerships, hoteliers can bring cash flow back to operations that may not go back to “normal” after Covid-19, hospitality leaders shared during the latest iMeetHotel conference.
Four business innovators in the hotel support sector told hoteliers there are creative and viable ways to generate cash flow now that could help hotels survive and then thrive, after Covid-19.
There are clear opportunities in local partnerships, online e-gift vouchers, community food deliveries from hotel kitchens, and being nimble enough to capitalise on new business directions when the upturn comes.
The four business leaders told just over 100 hoteliers in the 15 April I Meet Hotel webinar, organised by Bidroom, that a mixture of creativity, long-term strategic thinking and short-term tactical revenue generation could see hotel operations emerge from the coronavirus era in good shape. Here was their analysis and advice for hoteliers:
Callum Hale-Thomson – VP Business Development at Unwrapped
Even before C-19, guests wanted hotels to be “enablers of a complete destination experience”. That will be even more true in the near future. Domestic travel will be the first to rebound. Countries, however, will only open borders slowly. Consumer behaviour will remain tentative. Tourists will avoid going too far afield. Family tourists will look to stay safe. Accordingly, hoteliers should target “Staycationers” — local people from relatively nearby who seek pampering and hospitality; “Escapists” who will want a quiet, safe rural retreat — they will be unfamiliar with the destination and will need assistance; and “Opportunists” who want a hotel experience based on unique price reductions.
Hale-Thomson said hotels could make incremental gains from commissions from local companies supplying, for example, taxi services, unique local food and beverage tips, local tours, luggage storage and gym access. Companies such as Unwrapped can help hotels identify and set up local partnerships that will create cash flow for hotels, he said.
James Lemon, Founder & CEO at The Growth Works
Hospitality is, in essence, a creative industry, said Lemon. He observed that hoteliers often found new ideas hard to implement. They are also difficult to measure and scale up. He acknowledged it was unprecedented to see near-100% falls in occupancy and revenue, with hotel teams not even in the hotel anymore. He said there was little sign of a rapid recovery. And when recovery does come there will likely be a shift in customer behaviour. Different market segments will respond differently. He said that starting again from a base of 0% revenue meant that hotels could make no assumptions. But in some ways it was an opportunity.
Lemon said that hotel ‘war room’ teams should become agile and create scenario planning and carefully monitor market moves. Get ready to service your domestic market first, he said. For example, is your website geared to local browsers? Can they buy your hotel services with just a couple of clicks? At the same time, new partnerships to create revenue are usually lower cost, faster, and less risky than doing it yourself. He told hoteliers to get ready to create value-added packages that tie in with local attractions. Don’t necessarily drop rates. Instead, create hotel packages that protect the hotel’s top line room rate. But add in meals, or spa or high tea to make the package good value. Constantly review what works and what doesn’t. Adjust marketing strategy immediately.
Eleanor Petronzio – Head of Client Development at SK Chase
Petronzio helps hotels generate cash flow by helping them create and distribute electronic gift vouchers. There is a big appetite now for people, especially family members, to give each other soothing, loving messages with a voucher for a hotel stay, spa or afternoon tea to “brighten up their day”. Vouchers can be valid for two years or more. They create almost instant cash flow for hotels. And up to 23% of vouchers are never cashed in.
Over the last few weeks Petronzio has noticed a big spike in people buying hotel stay, spa and dining vouchers for themselves. People plan to give themselves and their families a reward when C-19 restrictions are lifted.
Angus Wilson, Brand Activation Manager at Uber Eats
Wilson told hoteliers on the webinar that the takeaway food industry in the UK alone was worth £8.4bn
(€9.6bn; US$10.5bn), up 18% in 2019. It was a trend he expected to emphatically continue in many countries during and after coronavirus. The partnership opportunity here, he said, was for hotels to utilise their kitchens to serve food to their local community. Companies like Uber Eats can help hotels set up, market and cook pre-set branded menus designed by UberEats. Or they can help them market and deliver the hotel’s own food to the local community. It is possible for hotels to go live with a new food menu within seven days, even with a modestly-sized kitchen.
Webinar host, Caroline Dal’lin, Director of Business Development at Bidroom, said: “With a creative and flexible mindset, hoteliers can today work with a range of partners to help return hotel operations to profit. That profit may come in ways that seemed unlikely or unthinkable only a few weeks ago. It all comes down to our capacity to innovate, anticipate and adapt to change.”
As a few countries are slowly coming out of lockdown, the next I Meet Hotel webinar on 22 April will address new trends and travel regulations that will affect hotels and the hospitality sector.
To sign up or find out more about upcoming I Meet Hotel webinars click here. To help hoteliers during the crisis, Bidroom has waived all hotel membership fees for 2020.