The hotel industry has experienced its share of crises, including economic downturns, terrorism, and natural disasters, but nothing has shaken the hospitality sector quite like the COVID-19 pandemic.
Travel has quickly come to a standstill, with international borders closed, flights grounded, and social distancing measures in effect, and hotels are left, empty, to deal with a flood of cancellations and a big financial dilemma.
While hoteliers make decisions about layoffs and closures, hotel technology companies are grappling with emerging trends that will shape the future of the industry.
As I wrote in a letter to the Hotel Tech Report community last week, “the only thing hoteliers can really do now is negotiate with lenders, stay current on local bailout opportunities, make prudent layoffs, focus on helping their employees as much as they can and pray that this ends soon.
Once we’ve sorted out all of those issues and have some downtime while our businesses are closed, the best thing we can do is prepare for the next downturn and improve our operational capabilities.”
In this article, we'll discuss six long-term trends that coronavirus has accelerated. We’ll connect these trends to technologies that are likely to see a surge in popularity in the aftermath.
Tough times force companies to think outside the box and become more efficient. While it by no means takes away the pain of the present, this time will undoubtedly accelerate the long term trend towards digital transformation in hospitality in a variety of ways that will create a stronger hospitality industry in the medium to long term.
Washing hands for 20 seconds wasn’t the only behavioral trend to pop up during the pandemic; we saw people in many industries embrace remote work en masse.
At hotels that remained open, employees who could work from home were encouraged to do so: revenue managers, sales managers, and even general managers.
In the past, hoteliers might not have given much thought to managing their hotel from afar, but during this crisis, it became evident that technology solutions that employees can access remotely are crucial to keeping operations on track.
Cloud-based property management systems enable hoteliers to manage their properties entirely off-site, from managing reservations to setting rates, in contrast to older local-based systems that staff can only access on hotel computers.
In addition to property management systems, cloud-based guest messaging systems allow hoteliers to communicate with their guests about reservation changes, cancellation policies, and refunds - all without setting foot on property.
Sanitization and germophobia
Cleanliness certainly isn’t a new topic to hotels, which have to constantly clean up their image after bed bug incidents and mysterious stains on sheets. But the coronavirus situation will certainly make guests more sensitive to hygiene in hotel rooms.
Companies like Xenex and Pure Room offer high-tech solutions for disinfection, air purification, and sanitization that can give guests more peace of mind than the standard housekeeping routine. In order for guests to feel comfortable staying in hotel rooms again, hoteliers will need to step up their cleaning procedures, and these tech-meets-hygiene companies can help.
Managing high turnover
Besides accounting for changes in guest behavior, hoteliers will need to think creatively to reduce turnover. The hotel industry always has high turnover, but the coronavirus outbreak prompted mass layoffs and furloughs on a scale we haven’t seen before.
Hotels need to be prepared to do a full staff turn and keep their hotel running consistently on the other side. Rehiring and training staff can be costly and time-consuming, so a savvy hotelier will look to digitization of SOPs via task management software, engineering software, and internal communication platforms to streamline the process.
But even before staff can be re-hired, hoteliers will need to find ways to maintain the physical hotel asset without guests or staff on-site. Just like turning on the engine to a sports car that's not in use, hotel staff must determine which essential tasks need to be done in the interim - and how technology can help - so the hotel can re-open in full working condition.
Black swan preparation
Job losses are certainly a negative consequence of this unexpected pandemic, but a positive effect is that hotels will become more cost-conscious. We’ll surely see hotels reaping the benefits of leaner and more efficient operations for years to come when they realize opportunities to cut costs.
Hoteliers can reduce their expenses by switching payment processors, cutting vendors who charge high upfront integration fees and more, which will help them become more prepared for the next “black swan” event.
Many investment managers are using this as an opportunity to “upgrade their portfolios”. Let’s say you owned the 2nd to best stock before the crisis and it went down by 30%, the same amount as the best stock in that industry. Stock pickers use times like these to “trade up” when the best stocks are hit.
What does this mean for hospitality businesses?
You can upgrade your tech stack. If you have vendors you don't love you can easily swap them out for best of breed providers using force majeure clauses in contracts and having the peace of mind that limited reservations are coming in anyways.
Automated revenue management
Hotel revenue managers rely heavily on historical data when making pricing decisions, but historical data isn’t much help after an unforeseen and unparalleled event like the COVID-19 crisis.
In order for hotels to bounce back - and book rooms at strategic rates - they’ll need access to real-time pricing intelligence to properly capitalize on demand as it ramps back up. Since we can’t predict exactly how and when people will travel again, hoteliers will need to pick up on trends and take action immediately.
The only way to be this fast is to automate the revenue management process. Global hotel companies like Marriott and Hilton have reduced their revenue management departments, and we predict that more brands will follow their lead and place a stronger emphasis on revenue management technology.
Evolution of HR
It’s not just revenue management that’s evolving; in many industries, human resources has shifted from an administrative to a strategic function. Major tech companies, for example, are investing heavily in teams of former consultants to optimize onboarding, culture, and more.
In hospitality (and small businesses in general), that change hasn't happened as quickly, but when the pandemic is over and travel ramps back up, hotels will need to identify talent and onboard new teams quickly. They'll need HR managers and recruiters who understand and can leverage technology like next generation applicant tracking to make the hiring process move as efficiently as possible.
When the storm passes
The coronavirus outbreak might be a dark cloud over the hotel industry now, but we anticipate that when the storm passes, we’ll see a rush of innovation and creativity coming from travel technology companies who can adapt to these six emerging trends.
We knew that change was coming, and the pandemic looks to be the catalyst that will push the hotel industry toward more tech-forward and efficient operations.