One year on from COVID, Italian hoteliers recognize Booking.com is not the enemy

Last year at this time, COVID-19 was crushing Italy. Lockdown measures began in the northern municipalities in late February and extended nationwide by March 9.

Around that period PhocusWire spoke to Florence-based hotel manager Giancarlo Carniani, who is also the president of Confindustria Alberghi Firenze, the region’s hotel association, and Phocuswright’s analyst for Italy.

At the time, Carniani said he and other hoteliers in Italy were outraged with Booking.com for offering refunds for hotel reservations, even to guests that had already agreed to accept future stay credits in lieu of cash. He said this anger made them all feel that when the pandemic subsided, they would not go back to relying on online travel agencies and instead “there will be a new renaissance and distribution will be all changed.”

But, as is now known, very little of what was expected in March 2020 turned into reality. Back then it seemed that after a few months of lockdowns around the globe, the virus would subside and life would return to normal. Instead, Carniani says his life as a hotelier in Florence is still similar - eerily similar - to what it was 12 months ago. 

Tuscany, like most of Italy, is currently in the “orange zone,” with museums shuttered, restaurants and bars open only for carryout and travel between towns allowed only for essential reasons. 

Carniani talks to PhocusWire from Florence’s Plaza Hotel Lucchesi, the largest of the three hotels he manages for ToFlorence Hotels. The hotel is currently closed but, because they cannot afford to pay any staff right now, Carniani and the hotel’s owner are taking care of the building and answering the phone – although he says it rarely rings. The conversation has been edited for brevity.

When we spoke last year, you were clearly very angry and said “everything will change” about distribution once travel resumes. Do you still feel that way?

It’s a strange situation, because when we talked it was like, in that situation we were in last year, we were looking for an enemy. I had started thinking the enemy could be Booking.com. 

Yes I was very angry at that moment because Booking was doing refunds without thinking. They could not admit that, but I’ve spoken with [Booking Holdings CEO] Glenn Fogel once and have interviewed him for one of my conferences and he said he would have done a different communication. It was a problem of communication in that period, which was getting us angry because we were doing so much to get clients to confirm bookings on a later date.

But once Booking sent that communication [about refunds] to all its guests, obviously everyone was asking for a refund, even those who had accepted the voucher. That was really annoying for hotels in that period.

I have to say – Booking has not been an enemy in the recovery this summer. When everything reopened in July ... Booking had the same share, even more because during the summer there were only three sources of business, which were the OTA, your own website and the phone. There was nothing else. And it was mostly Booking this summer, because obviously Booking.com is stronger here in Europe than Expedia.

What really disappeared was all the rest of the distribution – so all tour operators, all wholesalers – all that was cut away. The only way you had to work was OTA, the website and incredibly the phone. People wanted to call you and ask you what you were doing against COVID. It was a very interesting experience to reopen the hotel in July. We opened Plaza Lucchesi on July 9 with zero reservations and two days after we were fully booked. One funny thing – I think this hotel has done one or two walk-ins in 10 years, and one day last summer we did 10 walk-ins. People were traveling with a car, stopping by and asking if we had a room.

What is the current status of your three hotels?

Plaza Lucchesi had a very brief reopening last summer between July and October where we got some business very last minute. We were able to stay open for a few months. But after the end of October when the virus came back, we had to close down of course.

The hotel we have open – Villa Olmi Firenze - has 62 rooms and it’s running at about 15- to 20% average occupancy, only people who are obliged to travel for business. And also you have to have the restaurant open in the hotel because there is no other place for people to eat, everything is closed down. So pretty much the same situation as we talked last March, not much difference. 

One of our hotels – the little boutique hotel, Mulino di Firenze - never opened. Now we’ve decided it will stay forever open only in summer, and in winter I will turn it into a hotelier school. All the three hotels are getting a few reservations, mostly starting from July. But we are not expecting anything before June.

Has this crisis caused you to revise your cancellation polices?

It has all changed. Non-refundable rates are not existing anymore. I see some hotels still doing that, but there’s no reason any more to do that. We have redone all the policies about that. 

Most of the hoteliers in Italy have decided to extend the validity of their vouchers for another year. If you had booked and prepaid for 2020 you can come through the end of 2022, and if you don’t want to come, I will refund you. But I’ve seen many confirm for the future, and I’m happy.

And what has happened with your rates?

When we reopened, I personally told my staff that we are a startup. Imagine we are opening the hotel now. Forget what we were doing before. We are a startup. We don’t have our usual clients - Americans are not here, people from Asia are not here. We only have domestic and European, and they cannot afford the rates we had.

So our ADR has decreased by about 40% from before COVID. But in some respects I can tell you it was one of the big satisfactions of my career when we opened on July 9 and then July 12 we were fully booked, while all around me some of the hotels they reopened with the same rates they had before, and they were completely empty. 

There is a law that we always say about hoteliers that if you drop your rates it will take a lot of time to come back. I do think this was something that was of the ‘90s. It’s not happening any more. With the digital world you can do whatever with your rates, it only depends on the demand that you have. If you are able to bring back demand, you will get people. 

What shifts that have happened due to the pandemic do you expect will stick around? 

This pandemic will change a lot of things. It has changed forever some behavior, like obviously hotels which work with business travel will have to change strategy for a long period. Near my hotel there is a 300-room hotel that was working with an average of 20 coach groups every day. And coach groups will take a long time to come back. 

Another thing that will change is the concept of luxury. Luxury was booming in Florence. Luxury hotels were opening everywhere. I think this pandemic will give us a different concept of what is luxury. Luxury could be finding a hotel of 10 rooms in the middle of the desert instead of a fancy hotel where you have frescoes in your room. That will stay for a while.

Also in distribution, there will be more direct. Our website in those four months we were open was performing double as before. So if hotels are really smart they could use what is happening to transform a bit the way they sell the rooms. We are getting used to doing video calls, and people are getting used to book direct now. They want to know a lot of things about the hotel. They are more careful about the product they book than before. We will see, but I do presume even big names will not be there at the end of the pandemic in distribution. I’m not talking about the big OTAs - they have the element to survive, but maybe some big wholesalers and tour operators, we’re not going to see them anymore.

So we are investing more on improving our website and also on Google Ads, which brought a lot of business to our website. And it is interesting what they have done with Google Hotel Insights, which helps us to understand demand. Google is moving very fast. It could be they will take the pandemic in order to become finally an OTA. We’ll see. 

I did change all my software in this period. I discovered I had too many systems and some of them were not used too much. We have updated a few things, like our system of automatic check in. But then even if people are expecting the automatic check-in, they still wanted to come to the desk and talk to someone. We might see a lot of change in hotel technology. For example hotels with big conference rooms, they will have to face the fact that the hybrid conference system will be there forever.

Give us a sense of what you are hearing from other hoteliers and what is happening in your region?

It’s an enormous crisis. In the first lockdown we were coming from a very good year and obviously most of the companies were able to have funds to stay closed for a while. We thought it was maybe three months and then everything would be over. Now it is much different because you are coming from a complete year where you have seen nothing, so you really have problems in paying the smallest things. 

The situation is very difficult. The government has promised for months and months to get some recovery in terms of money to the companies but that was very, very, very poor, so you cannot even pay the gas bill or whatever. It’s really impossible. I think average now in Florence there are no more than 10 hotels open, more or less, out of about 400.

Will the cleaning protocols you’ve put in place due to COVID be here to stay?

Yes, it is here to stay. But when we opened in July people were happy to see faces, even with masks, they didn’t too much care about cleaning. Obviously we have done everything, all the measures it is possible to do. You could see people wanted to have back a hug. They want to have back a smile. My impression was that last summer people were ready even to take a risk. People are desperately needing for social interaction.

One of my competitors he did a big video in which he was showing his hotel like an hospital, showing what they were doing, and he put on it on their homepage. That was not what people were expecting. They wanted to have a dream of vacation. They don’t want to go in a hotel and feel like they are in a hospital. So I’m against the fact that cleaning is the only fact that people are looking for. They do want it, because every call we receive they are asking about the measures we are taking. But then when they are here they want to have a vacation and relax.

And as you reflect on the past year, what lasting lessons have you learned?

I’m working in this business since 1982. I faced a lot of crises, of course, but nothing like this. The first thing that I’ve learned is like the day a turkey has at Thanksgiving. It’s fat, fat, fat, he eats and then one day you cut his head and it’s gone. This can happen in this business as well. So we always have to be careful. 

I never thought something could happen like this in tourism and travel. I’m feeling like it is our war. It is a war for our business, and we need to reconstruct. In Italy after the World War we had to reconstruct everything. We wrote a fantastic constitution after the war. That is what I am trying to do with my staff. We have said we have to rewrite all our values because they have changed. We are working, and we will write a fantastic document with a new value for us, for our company and for all the staff. Hopefully this will change the way we work and interact with other people.