Building Customer Confidence for the New Normal (Gregg Hopkins)
It’s no secret the hospitality industry is among those who have been hit the hardest with real economic impact due to the COVID-19 pandemic. As of May 20, nearly 8 out of 10 hotel rooms were empty across the country, per STR. This is in addition to the thousands of hotels shuttered completely. CBRE is forecasting that 2020 is projected to be the worst year on record for hotel occupancy.
Since the public health issue began escalating in mid-February in the U.S., hotels have already lost more than $25 billion in room revenue. The human toll is equally devastating. Nearly 1.6 million hotel employees out of work and $2.4 billion in weekly lost wages due to the crisis. Additionally, nearly 3.9 million total hotel-supported jobs have been lost since the crisis began.
I think we can all agree that there will be two phases to recovery in our industry – pre and post vaccine. Or, a cure. I’m confident that science, as they have demonstrated in the past will provide us with the remedies, we need to get past this “once in a lifetime” event.
Although operators will argue that revenues are down so they can’t afford to invest, now – when occupancy is low – is an excellent opportunity to prepare for the “new normal” and ensure that your property is competitive and the earning the confidence of guests when travel resumes. In doing so, there are three C’s I recommend that you consider during your planning.
- CLEANLINESS PROGRAMS
Most of the major brands (Marriott, Hilton, Accor, IHG) and organizations (Singapore Tourism, AH&LA) have already published “standards” for cleanliness post-COVID.
- Difficult to communicate this message as I thought that hotels already were clean and sanitized. I’ve always “set the bar” at 1) clean room, 2) comfortable bed, 3) great shower water pressure, and 4) fast, reliable Internet as my standards for a great place to stay.
- Added costs decreases margins
- The good news is that “only” restaurant grade ‘cleaning standards’ are necessary – not hospital grade cleanliness which can be very expensive... however you do wonder if this will lead to municipalities inspecting hotels like they do restaurants and issuing grades (A, B, etc.)?
- .. you can’t go back in the future with lower standards, which apparently, they were before
- Did the industry overreact? The CDC reported last week that it is “highly unlikely” to catch the virus by touching surfaces
As part of this effort, it is important that hotels document their compliance with these programs and provide guidance to their staff in performing the program. Technology can play a role in meeting these new standards.
Operations management technology, for example, which provides housekeepers with digital checklists to complete tasks while cleaning a guestroom or public area are an ideal way to ensure that each space is “COVID-19 clean” and documented. Task information is stored in the system to provide management with records that the process has been completed and which employee completed it.
To go a step further and provide further assurances that travel is safe, telemedicine is emerging as an offering of the ‘new normal’. The CDC is recommending using telemedicine whenever possible because medical practice on the Internet via video, voice or chat can result in faster diagnosis and treatments. It can also increase the efficiency of care and reduce patient stress.
I’ve been involved with workgroups from HTNG where hoteliers have explored having medical personnel in their lobby in order to address this concern of “medical availability”. Instead, solutions are now available that enables hotel guests and cruise passengers to be ‘seen’ on a computer, tablet, or smartphone by a health care practitioner and have treatment prescribed as needed for a fraction of the cost of going to a local Urgent Care or Emergency Room. So, if a guest is feeling ill, he or she can access the service on a branded hotel or cruise app or website; or take a picture of a QR code on a room or stateroom table tent card, and receive immediate diagnosis and treatment from a local, leading medical professional.
From an operations and global health perspective, the platform provides analytical insight and identifies potential hot spots in real time while protecting patient privacy. The technology supports proactive polling, enabling operators to follow up with guests to see how they are feeling throughout the stay and ask if further help is needed. It also shields hoteliers and cruise operators from liability associated with medical care while demonstrating a strong commitment to safety.
Letting travelers know that if they get sick – whether it’s a cold, from food poisoning, or the Coronavirus – letting them know that your facility provides instant access to world renowned health experts that can diagnose and privately prescribe medicines will go a long way towards getting the travel industry back on its feet.
A group that we at PROVision Partners are currently working with is introducing a commercial model that enables licensees to roll out the solution at a significantly reduced cost on a pilot basis.
Which leads me to our second C...
- CONTACTLESS GUEST JOURNEY
So, in addition to heightened sanitation practices and social distancing, hoteliers can increase occupancy by appealing to guests who want an experience that is high tech … not high touch. Adding new technologies, or improving existing ones, that provide guests with a “contactless” experience will increase satisfaction while also adding differentiation in the market.
Once considered a “nice to have”, a mobile, frictionless, check-in experience will become more of a standard, “need to have”, and expected technology going forward. This includes the entire mobilized guest journey of being able select their room from a floor plan, check-in -- which may include guest identification and credit processing --, use their phone as a mobile key and perhaps in room remote control, communicate with hotel staff, and check-out of the hotel – all without having to stop by the front desk, thus avoiding face to face interaction.
During their stay, AI solutions can also reduce the amount of direct employee communication with guests by directing service requests via text message to the appropriate department. An excellent case study of this is where a resort reduced the number of guest calls and interactions with the front desk by over 12,000 per week because the inquiries where handled directly by the AI solution they had implemented. And while these numbers were experienced pre-pandemic, imagine the use case for hotels during the ‘new normal’ where staffing has been significantly reduced.
Another solution to consider is a voice-enabled communications platform. During this time of quarantine, people have become even more reliant on smart speakers with voice assistants to give them the information they need on voice command. Research shows that in first quarter 2020 alone, 300,000 more smart speakers shipped to consumers in North America over the same period last year. With smart speakers becoming part of people’s daily routines, it’s more important than ever that hoteliers embrace voice.
There’s also a “cleanliness” component here. When travel resumes, hotel guests are not going to want to touch in-room thermostats, telephones, TVs and remotes, HVAC systems, bedside alarm clocks, etc. They would rather just speak commands as they did at home to control the environment by saying things like “Alexa, turn on the TV and turn off the lights,” or “Hey Google, close the drapes, lower the thermostat, and ask the hotel to set a wake-up call for 6:00 a.m.” Key to identifying the best voice technology partner is finding one with multiple integration partnerships with IPTV, room control, energy-management, staff alert, and work-order management systems. When properly implemented, voice assistants will become powerful and highly secure business tools that boost operational efficiencies, influence guests’ behaviors, and drive much-needed revenues.
Speaking of revenues . . . one of the best ways to slash costs and operate leaner in the days ahead is to review all existing technology and service agreements – both on and above property -- as to their current effectiveness and value to the operations and the guest experience.
For example, energy consumption is a hotel’s most significant operational cost, comprising as much as 60% of utility expenditures. Implementing smart EMSs will not only reduce costs, but it will improve overall guest experiences. The ROI generated from some systems is so significant that financial returns can be realized in just 12 to 24 months. With such cost-saving potential, the example of smart HVAC technology simply cannot be overlooked by hotel operators as they continue to operate during the downturn created by the COVID-19 global pandemic.
Using downtime to add new solutions like these is the ideal time because there is no disruption to service – rooms aren’t being taken out of inventory and guests don’t need to deal with construction noise (if relevant). More importantly, satisfied guests will lead to an increase in positive online reviews.
Any technology that will help lower operating costs and drive crucial revenues through guest purchases should be considered and rolled-out today while occupancy is low. I’ve seen examples where vendors are offering a "Fee per occupied room" model to assist hotels in the recovery, and “deploy now, pay later”. The more assurances a hotel can give travelers that its facilities are virus-free and have reduced direct contact with employees or other guests will put us on a faster track to recovery by building consumer confidence.
The final “C” applies to both hospitality organizations and vendors in our community.
If this pandemic taught hotel operators anything, it’s that real-time communication with employees is critical, especially when business halts and workers are put on furlough. Most people manning the frontlines don’t have a company email address, and although human resources may have a physical address, phone number or personal email - they may not be accurate. And forget about phone calling. It’s time consuming and connecting is random. The only way to truly remain engaged with employees — keeping them updated on new policies and rehiring plans — is to implement an employee communication platform. Here’s why it’s important . . .
There is no guarantee that when hotels reopen employees will return. How well an employer communicated during the shutdown will determine if an employee wants to come back. If an operator closed its doors and said, “see you later,” chances are high that management will probably have a lot of rehiring to do – and that costs money. Putting a mobile-first communication plan in place will enable hoteliers to reach every single employee regardless of their job position, and it will go a long way towards building loyalty. Some technology providers are offering free roll-out of their solution for a limited time. With this type of financial assistance available, hoteliers can get the tools they need today to be successful tomorrow.
While real-time communication prior to reopening is essential, operators should also be doing everything they can today to keep workers safe when they return. That includes adding employee safety devices or panic buttons that enable service workers to call for help during an emergency. Whether a housekeeper is in danger of sexual assault or a room service attendant discovers that a guest is in medical distress, investing in safety alert technologies speaks volumes towards a company’s integrity and the empathy that it shows to employees. If given the choice to work at a hotel with panic buttons or without, my guess is safety will win hands down.
There is also a huge social responsibility component to employee safety. By the end of 2020, more than 60 hotel companies representing 20,000 properties have pledged to add employee safety devices through their commitment to the American Hotel & Lodging Association’s 5-Star Promise initiative. While participation is voluntary, legislation in New York, New Jersey, Miami, Illinois, Washington State, Las Vegas, and California is mandating implementation. And again, help is available to offset the costs associated with these safety installations. Hoteliers wanting to step-up their safety protocols can receive several months of free service with deferred payment terms if they sign up soon. When workers are equipped with panic buttons, it does much more than just deter crime; it stops negative reviews from popping up, it adds integrity to the brand/property, and it makes the hospitality industry stronger overall.
Prior to the doors reopening, hoteliers have a new opportunity to remarket themselves. Travelers will be returning and it’s more important than ever before that hotels capture market share. If a hotel struggled to compete prior to this pandemic, now is a great time to emerge even stronger than the competition.
This is also a good time for vendors to stop and evaluate their current business practices, implement new strategies, or make improvements to existing operations. Think of it as not just weathering the storm but playing in the rain.
Technology “leadership” is ephemeral in today’s travel and hospitality landscape. It’s essential to understand how quickly and to what degree technology can improve the business of a hospitality or travel organization. For a technology solution to truly stand-out in the crowd, it must effectively communicate that improvement capability in its go-to-market message and embed that value in its applications. Now is a good time – while the world has stopped -- to ensure your technology, products, and solutions are meeting these criteria.
A core tenet to growth is strategic marketing. Implementing strategic marketing into an organization requires purposeful, tactical business development and marketing plan aligned with the core business growth strategies. I recommend that you consider these four ways you can improve your organization’s go-to-market messaging during this temporary slowdown in the business world:
- Perform a Marketing Audit to include a review of your brand style guide, website, and sales enablement materials. Do they effectively communicate your solution’s value proposition and its benefits?
- Review your 12-month Strategic Marketing Plan (assuming you have one). The Plan should include insight on talent, dynamic growth planning, tactics, marketing communications, product roadmap, pricing, operations efficiency, competition, and other business issues. The strategy should also contain potential costs and timelines associated with the implementation and delivery of the Plan throughout the organization.
- Develop a Target Prospect Listing of industry analysts, consultants, trade press editorial, travel and hospitality executives, etc. so that you can effectively and frequently communicate the Unique Value Proposition of your technology, products, and services.
- Retrain your sales organization on how to present the solution, its technology and benefits. Make sure everyone is delivering the same message to your potential customers every time.
As a result of these efforts you can expect to see increased brand recognition, improved product positioning, identify potential opportunities for new sales, and the ability to achieve your growth and scale objectives.
In this time of social distancing, the beauty of a strategic marketing program is that it can be executed effectively through “remote collaboration”, not requiring face-to-face engagements. If your organization needs assistance with developing a Playbook around these objectives – we are here to help.
This current situation we are in will soon end and it will either be back to business as usual or back to business as an effective enabled organization. Following these three C’s will provide the guidance operators need to earn consumer confidence and prepare for the “new normal.”