Surviving Coronavirus in the Hospitality Industry
Every hotelier in the world is talking about Covid-19, even if they’re not yet experiencing the fallout of what is being heralded as one of the biggest crises of our time. A storm in a teacup it is not, and property managers are wise to start preparing and examining their options while there’s still time.
The measures being taken to control the spread of the coronavirus by governments around the world are staggering. Borders are being closed, lockdowns implemented and flights suspended or grounded. In some cases these restrictions have been imposed so suddenly, planes have had to turn around mid-air and return the way they came.
The knock-on effect within the hospitality industry has created havoc. Travel restrictions mean hotels are inundated with cancellations, while restricted movements and business closures mean corporate bookings are taking a serious hit. Restaurant bookings, meeting and conference rooms are among the worst affected with some hotels reporting cancellations of up to 80%.
Take Action and Plan Ahead
Yes, it’s scary but don’t panic! There are always things you can do to minimize the damage and prepare your business for the eventual upturn.
Now is a good time to start examining your operating costs in more detail…
Here’s a summary of a few things you can start doing now:
- Government Support. Find out what funding is available in your region. Many authorities are putting together business support plans that will help you survive in the short-term. These may be in the form of loans, wage subsidies or tax relief. Many countries are talking about temporarily lowering or removing tourist tax until the sector recovers.
- Insurance. Check out your insurance plan to see if you are eligible to claim for business interruption. This is not usually a stand-alone policy, but included as an extension to a comprehensive plan, and coverage may be limited to certain kinds of disruption. To receive compensation for the Covid-19 outbreak you will need be insured under the clause ‘communicable disease outbreaks’. Be sure to discuss the matter with your broker or agent to find out if you’re covered.
- Lower Overheads. It’s important to try and cut expenditure as soon as possible while looking for new revenue streams to increase profits. One fine dining restaurant in the US has temporarily shut and reinvented themselves as a drive-through burger joint. Necessity as the saying goes, is the mother of all invention. Where possible, speak to suppliers about rescheduling or postponing payments to help with cash flow. Now is a good time to start examining your operating costs in more detail. Have you been thinking of switching to a less expensive supplier but just haven’t gotten around to it? Use the additional time you’ve gained to look at ways you can minimize expenses and streamline your business.
- Communicate with Your Guests. Once guests have booked don’t let them get the pre-travel jitters. It’s important to let them know that you care about them by sending them texts or emails. You can even go that extra mile and pick up the phone. Reassure them about the air quality, hygiene measures or any sanitation procedures that will help to calm their nerves. Research has proven that lowering prices is not always the most effective way to get more bookings in these situations. Instead, offer them a refund if they cancel their trip. Set out clearly what the terms are and how they can go about requesting it so they don’t feel locked in.
- Stay Positive. The tourism industry is resilient and it helps to be reminded that this slowdown won’t last forever. While it’s good to be prepared for the hurdles ahead, it’s also important to think smart and plan now for a successful recovery. We appreciate these are tumultuous times, and we wish all you hoteliers well over the weeks and months ahead.