The global hospitality industry has been clouded under searchlights ever since the onset of COVID 19. Never ever in the history of business has any one sector been as deeply impacted as the hospitality and tourism sector over the last 12 months – all because of one small micro-organism! Heralded as one of the fastest growing sectors over the last decade, the hospitality industry was estimated to be about 600 billion USD in 2019. At last count, there were over 700,000 hotels worldwide having over 4 million hotel rooms and employing over 173 million people.
Come 2020, this industry is but a pale shadow of itself. Across the world, even prestigious properties have either shut shop or struggling to survive. An erstwhile place for social gatherings sadly is forced to contend with social distancing.
So, what does this mean for the hospitality sector? Before experts start writing out the epitaphs for the industry, let me give you my considered view. Yes, the industry is struggling and in distress. Yes, it will not be “business as usual” for some time. Nevertheless, business can bounce back if hotel owners and managers do the unusual things which were perhaps not done as a matter of course so far, but is today a sine qua non.
My simple prescription for the turnaround of the hotel industry is appositely called “REST”!
R: Re-invent & Re-purpose
The fear of the pandemic is going to linger for a few years amongst people. We will loathe to visit crowded places in the spirit of
fun and entertainment. Taking this into account, hotels need to re-purpose their properties to construct opportunities for small, personalised gatherings rather than depend on the (more profitable) large banquets and conferences. Individual entertainment and personalised experiences should become the order of the day. Small should not only be beautiful, but should be positioned as more premium too! Imagine an opportunity for a couple to “book” an entire swimming pool in the resorts for an hour – no matter what the cost. The feeling of safety that comes with it will be priceless!
No longer do customers want just a place to chill. That they have been pretty much doing that in the confines of their homes for close to a year now! What they look forward to, is a unique experience, something which is not easily available and for which they are willing to pay a price. The more curated experiences the hotel can afford, the greater its brand equity and its ability to charge a price. Tariffs will hence no longer be a function of occupancy but will entirely depend upon the quality and execution of curated customer experiences. So, hotels need to think of ways to keep the customer engaged at a deeply personal level, not at a group level.
S: Safe, Secure, Sanitised
This one is a no-brainer! For some time to come, the primary decision on choice of hotel/resort will be based on their obsession with safety protocols. For eg. just the fact that my grocery store has stopped checking the customer’s temperature at the entrance has now made it my erstwhile store! So, even after the din dies down and there is ample statistical evidence on the flattening of the COVID curve, there should be no slackening because of the flattening! For the next 5 years at least, customers must be reassured about the hotel’s diligent efforts to ensure safety through frequent cleaning, spot health checks and what have you. Tripling investment in housekeeping staff and actually talking about it in the outside world is not a bad idea for business
Last, but not the least, there has to be far greater use of technology. With emerging technologies like Al to predict customer behaviour and hence customise offerings as well as robots for safe, contactless interactions, hotels should spare no effort in weaving technology into the very fabric of them daily operations. Adequate investments in technology will ensure that the business not just becomes more efficient but also profitable very quickly
In sum, I believe that transformation of the global hospitality industry is not just possible, but very much in the offing. By following the simple formula explained above. I think it’s only a matter of time before hotels and resorts regain their lost sheen.
In this time of fear, uncertainty and doubt, hotels need to do everything to overtly reach out to customers and continuously reassure them of the proactive measures
After all, it’s important to practice social distancing without becoming socially distant!
– Raghu Viswanath
Group Chairman and
Chief Vision Holder, Vertebrand.