Hotels have experienced significant losses due to coronavirus. But, there are signs of recovery. A report on the travel industry generated by McKinsey & Co., the global consultancy, covers airlines, hotels, vacation rentals, tours and activities, online travel agencies (OTAs), car rentals, and ridesharing and cruises. According to this report, there are “… signs of latent demand for travel: Customers are interested and willing to travel again when they are allowed to do so, even before a vaccine is available at scale.”
The hotel section of the report examines the guest’s customer journey from exploring options to return. Each stage of the guest’s journey has pain points. However, with Covid-19, there are now additional pain points that hotels must also address.
Synthesizing these guest pain points, there are three overarching issues: Worry, Fear, and Uncertainty.
- Worry is the state of anxiety over actual or potential problems.
- Fear is the uneasy, scary emotion caused by thinking that something dangerous will happen.
- Uncertainty pertains to the lack of services regarding known amenities like gym usage, cleaning and disinfecting, health of housekeepers and staff, meal and beverage availability, and other expected amenities that may be limited or no longer be available.
To address these issues of worry, fear, and uncertainty, hotels should follow the four rules of FACE: Focus, Alignment, Collaboration, and Executional Excellence with Empathy.
The Focus Rule
Focus on core customers and gain greater insight into loyal guests and potentially loyal guests. Dig deeper into who is the loyal guest, why this guest chooses your brand(s), and on what occasions the guest uses each brand.
According to McKinsey, price is now considered a lesser driver of brand choice due to the coronavirus. Many hotels use the Smith Travel price-based system for categorizing the hotel industry. They use “average daily rate of the room” creating these price-based groupings: Luxury, Upper Upscale, Upscale, Upper Midscale, Midscale, Economy, and Independent.
For example, Hilton Hotels, with 18 brands in their global portfolio, uses the Smith Travel structure excluding Economy but including Timeshare.
- Luxury: Waldorf Astoria Hotels and Resorts, LXR Hotels and Resorts, Conrad Hotels and Resorts
- Upper Upscale: Hilton Hotels & Resorts, Canopy by Hilton, Curio Collection by Hilton, Signia by Hilton, Embassy Suites by Hilton
- Upscale: DoubleTree by Hilton, Tapestry Collection by Hilton, Tempo by Hilton, Hilton Garden Inn, Homewood Suites by Hilton
- Upper Midscale: Hampton by Hilton, Motto by Hilton, Home2 Suites by Hilton
- Midscale: Tru by Hilton
- Timeshare: Hilton Grand Vacations
This classification is not customer-focused. It is an arbitrary industry classification. It is doubtful that a potential guest calls the Hilton reservation system requesting a room in an “Upper Midscale” hotel. Instead, marketers should redefine their competitive sets using occasion-based benefit segmentation.
Focus means knowing your customers inside and out.
The Alignment Rule
Alignment is fundamental to building and marketing powerful brands. Alignment means that everyone in the brand organization is working together toward the same destination. Without alignment, the changes that must be implemented to re-attract guests and attract new guests will not happen or will happen haphazardly.
In an interview with The Wall Street Journal’s The Future of Everything, Marriott CEO, Arne Sorenson (Pictured above) spoke about a video he made in March 2020 to provide all employees with the same understanding of the pandemic’s effect on the business. He spoke about the impending layoffs; he spoke about his battle with cancer. He was open, transparent, and honest. Mr. Sorenson said that he had to be the one to speak to employees because when there is bad news or crises, the message should be delivered personally from the top so the entire Marriott community knows there is nothing hidden and that leadership is aligned and involved.
The Collaboration Rule
Collaboration means sharing what we know. We must maximize a return on global learning. With Covid-19, global collaboration is essential.
The CEO of French hotel company, Accor, Sebastien Bazin, said recently that chain hotels must collaborate to help independent hotels and restaurants. Otherwise, there will be no tourist industry. The places where hotels are located are what draw guests. Without the draw of “the place,” hotels, especially higher-end hotels, will suffer. He believes that the big hotel chains will need to think about taking a monetary hit to resuscitate the local tourist trade.
He said, “Let’s face it, anyone staying four days with me at a Novatel or a Fairmont in Bangkok, it is because they want to experience the Bangkok culture and explore the small restaurants or bars in that destination. This is what Bangkok is all about. The same in London, the same in Paris, the same in Sao Paulo. We need to help these people because they make that destination more valuable and more sexy.”
Monsieur Bazin added that this might mean directing guests to local food and beverage establishments instead of the hotel’s. “We need to direct traffic to them, make sure they are known. Give them access to your procurement. Since you have the scale and are probably buying cheaper, why can’t they have access to the same procurement and best pricing?”
The Executional Excellence With Empathy Rule
Operational excellence is an important factor regardless of crises. Marketing can bring guests to the door, but excellence of execution with empathy will keep them coming back for more.
Guests’ and employees’ worries and fears must be recognized and addressed. People’s priorities have been altered by coronavirus. All interactions must come from the perspective of empathy. As Mr. Sorenson said, employees want protections, too.
The Hotel Indigo at the Albany, New York airport re-imaged rooms, making changes that address customer worries, fears, and services. The new rooms have only one upholstered item, a chair: everything else is easily sanitized. There are no wall hangings or fabric headboards, no carpeting, only two bed pillows, no end-of-bed throws, sanitized TV remotes in plastic bags, and a small fridge for guests’ food and beverage. Meals can be ordered from the restaurant and picked up for in-room dining.
Now is a time for action on the part of hotels. There is a huge opportunity for brands to come out of this pandemic crisis bigger and more powerful with more guests who visit more frequently who are more loyal and who generate more revenues and profit. To succeed will require a new set of rules: the rules of FACE.
Contributed to Branding Strategy Insider by: Larry Light, CEO of Arcature
The Blake Project Can Help: Ask us about our strategy work with Marriott and Wyndham Hotels and Resorts.
Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Growth and Brand Education
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