#COVID-20: Surviving Global Business Pandemic
Travel returns. After a period of being without income, suffering huge losses, plus having to incur extra expenses to comply with the new health and safety demands, playing by the post-corona rules does not favour your pocket. Those of us in hospitality who have managed to survive thus far are emerging into a previously established world just to find out that nothing works the same anymore:
- Hotel prices are being noticeably dictated by the price level of the shared accommodation market. Home-sharing, a business that was prohibited due to coronavirus restrictions suffered tremendous losses and wants its money back. Many of the businesses didn’t survive the pandemic; those who did are prepared to go a long way in the price war. It is not necessary to elaborate on the effect this price war will have on hotel pricing.
- Post-Corona guests are not the same anymore. After months of not being able to work, not earning an income, many of them are facing financial crisis. Depleted savings and lost jobs have put the need to feed families above the want to travel in their list of priorities. No one can predict how long it will take for things to go back to ‘normal’. This means that for many in the hospitality industry the problem is far from over and many businesses still may not survive.
- There is a good chance that the entire perception of ‘normal’ will change. The world shows disturbing signs that climate change, racial unrests, and coronavirus will hardly be the last of the shakeups.
The near future might appear much less predictable in what was once thought to be an unshakable short-term let industry. Simply hoping for the opposite will not be wise – we need to wake up and face facts. A rule of thumb for business: if anything can go wrong it definitely will.
Those who wish to survive must be willing to adapt to new changes. In other words, if the old ways do not work, new ones need to be found – and this truth applies now more than ever with regard to securing YOUR profit.
Focusing on this should have been done a long time ago, before the coronavirus, but the rental industry got too comfortable with how things were. Are there any hoteliers who can remember the last time they created a listing of their hotel rooms on a new booking platform? Who needed it? Or when last did a hotelier listen until the end when a new supplier had an offer for your hotel. Who cared? Well, now is time to care.
In the time when the global pandemic gets replaced by a business pandemic it is hardly time for outlandish financial decisions; it is however time to look at the more evident ways of cutting costs. Your chances of survival can be increased if you look into the following:
- Save on the service fee of online booking platforms
- Save on the advertising of your hotel
- Offer more competitive prices
- Get fully booked
- Sell more through the hotel’s website
- Charge higher than your usual prices wherever possible
Finding ways to save on online Booking Fees might save a hotel up to 15% of its budget. Online Advertising Budgets might differ depending on short-letter’s size and turnover, nevertheless it remains a major single-spend that accounts for up to 80% of all marketing spend.
In a time where a guest is a scarce resource, missing out on bookings is an unaffordable crime. The only way to get them is to take them from your competitors. This is where Competitive Pricing comes into a play. If you are flexible in your pricing it could aid you in attracting much-needed guests.
You can see that there are few more in the list, but these three:
- Booking Fees
- Advertising Budget and
- Price Flexibility
are the First Steps in attracting a considerable amount of saving. This will enable hotels to carry their losses for longer; which means surviving longer. The key question remains: where you can get these free from? And this is a very ‘life and death” question indeed.
Where and how to get these three work for you. Find out it out in our next article: “Winning the Post-Corona: Understanding the Challenge”.