Almost overnight, the pandemic forced hoteliers to fundamentally rethink their business models, but PrivateDeal’s digital marketing manager Matthieu Mauguin believes there are lots of lessons we can learn from this difficult period.
At the end of 2019, hospitality professionals seemed to have a good idea of what to expect in 2020. From the impending advent of new AI [artificial intelligence] solutions to the generalisation of online marketing, most analysts predicted that the industry would keep on riding its growth spur towards a complete digital transformation.
Enter the Covid19 outbreak, and, alongside it, the emergence of an apocalyptic lingo. Expressions such as the new normal and the end of the world as we know it crystalised a fundamental change happening within our society. As a result, all of our well-thought-out predictions and analyses on the future of hospitality went out of the window.
Globally, hoteliers were forced to review their strategy in record time. Throughout the year, at PrivateDeal, we had the chance to witness and support hotels’ efforts to succeed in this precarious environment. Looking back, we learned a lot from the resilience and courage displayed by our industry and wanted to share some of this knowledge in order to better leap into 2021.
1. Hotel management requires lifelong learning
Albert Einstein said, “Once you stop learning, you start dying”, and the saying has never been truer than in the current context. Even if you were a seasoned hotel manager, the Covid19 crisis has likely challenged all of your past experience and knowledge about the profession. In the face of uncertainty, hoteliers have had to relearn some of the key cornerstones of the industry, such as staffing and revenue management, both of which underwent major transformations because of Covid.
As a result, web traffic on hospitality-related educational platforms nearly doubled in the past few months. Instead of wallowing in self-pity, hoteliers understood that they needed to take action in order to adapt and save their business.
In a great showing of courage and resilience, most of them took the matter into their own hands and kept looking for ways to survive amidst the plethora of constraining safety measures and lockdowns. This gave birth to new innovative strategies for hotels to generate revenue. We will go through some of them later in this article.
2. The playing field has been levelled
As the Covid wave swept through the hospitality industry, almost all of its seemingly solid foundations were shaken. Even the most successful hotels, whose business had been thriving for decades, had to go off course to adapt to the situation. On the other hand, the Covid19 outbreak gave hotels that were not doing as well a unique opportunity to catch up with their competitors.
Indeed, with the industry turned into a blank slate, now is the perfect time to build anew and start developing competitive advantages for the future. No matter how you used to run your business prior to the pandemic, it is first and foremost the actions taken during this critical time that will define your place on the market for the years, maybe even decades to come.
3. Digital has become mandatory
Analysts predicted that digitalisation would continue taking over the hospitality world in 2020. However, they probably did not expect it would happen in such a context. Covid19 afforded much-needed time to hoteliers so that they could sit down and review their approach towards the digital world.
While pre-Covid, a lot of hotels used to rely almost solely on OTAs [online travel agents], some took this as an opportunity to regain control over their online acquisition strategy. Doing so, they started improving their website, acquiring new direct booking tools, and working on digital marketing campaigns.
Moreover, the pandemic also drastically undermined all non-digital acquisition channels such as the traditional bricks-and-mortar travel agencies. Therefore, it was a natural step for hotels to start working on their online strategy, notably as a way to diminish intermediary fees. Moving forward, if you want to remain competitive in the post-Covid19 hospitality market, you cannot afford to trail behind on the digitalisation front.
4. Hotel businesses are more malleable than they seem
Hospitality has the reputation of being a very traditional industry. This is in part because hotel management is sometimes erroneously viewed as a settled debate grounded as science; a thousand-year-old profession that requires neither innovation nor change in order to thrive. However, the Covid19 outbreak challenged these assumptions and brought to light the pioneering side of hospitality.
Multiple new business tactics emerged in the wake of the crisis to help hotels adapt to this precarious environment. Amongst other solutions, hoteliers came up with longer term stay discounts, work-from-the-hotel packages, and other day-use bookings to keep generating revenue in spite of Covid. Far from the preconception of the old traditional model, hotels are very resourceful and can adjust even to the direst of situations.
5. Local travel is here to stay
Well before the pandemic even started, local travel had become trendy, especially amongst the younger generations. Its supporters praised the reduced environmental impact and lower cost of the practice as well as the contribution to the domestic economy; all matters critical to both millennials and Gen Zs.
When borders began closing around the world, local travel picked up even more steam. Since most people could not go on trips abroad, they naturally turned to domestic destinations to spend their holidays. This rediscovery of nearby touristic attractions triggered a burst of enthusiasm for local travel, which is likely to remain strong for the coming years.
Looking ahead, hotels should not dismiss the importance of this more locale clientele when elaborating their marketing strategy.
6. Business travel might never fully recover
In 2019, business travel amounted to 21% of all travel worldwide. This share dropped to less than 10% in 2020.
Meanwhile, video-tech companies such as Zoom had their best year ever during the pandemic, gaining hundreds of millions of users in the span of just a few months. One of the main drivers of this growth were businesses forced to cancel trips to foreign offices because of the pandemic, which had to hold meetings through videoconference instead.
Contrary to leisure travel, the hefty drop in business trips could prove less temporary. Indeed, during this time period, a lot of companies realised that this new way of working was both cheaper and just as productive as lengthy trips to meet in person abroad. Bill Gates agreed with this logic and said he believed that more than 50% of business travel would disappear in the post-Covid world.
If your hotel used to rely mainly on business travellers, you might want to start branching into a different niche market to adapt to this new environment. Alternatively, you could also try to turn some of your rooms into work offices to optimise rentability like several big hotel chains chose to do.
Parting thoughts
2020 was not kind to the hospitality industry. The Covid19 outbreak stopped a ten-year growth period dead in its tracks and put every hotelier to the test. By challenging our old ways of working, the pandemic asked a tough question: can you adapt your business?
Faced with an unprecedented threat, hospitality professionals rose to the occasion and managed to find the resources to fight back. Through a great showing of resilience and innovation, they have adjusted their businesses to fit into this new and precarious setting.
Even though we are not out of the woods just yet, the courage displayed during these difficult times make us confident that our industry will grow out of this ordeal stronger than ever before.
This is an edited version of an article that appeared on PrivateDeal.
Matthieu Mauguin currently works as a digital marketing manager at PrivateDeal. He entered the hospitality industry after studying and graduating in Marketing & Management. He focuses on online strategy optimisation for hoteliers.
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