Running a Hotel During a Pandemic: How to Make Up for Lost Revenue

Without a doubt, the travel and hospitality industries are easily among those that have been hit the hardest by the fallout from the spread of COVID-19. The U.S. Travel Association has projected that spending on travel in the United States will plunge by $355 billion this year (31%), which is more than six times the impact of 9/11. Spending on transportation, overnight accommodations, retail, attractions, and restaurants all fall under the umbrella of “spending on travel.” According to Smith Travel Group, hotel room occupancy rates for the week of March 24th to the 30th fell 67.5% when compared to the same week in 2019. The group also expects 2020 revenue per room for the hotel industry to fall 50.6%.

These scary statistics are everywhere, and if you’re part of the hotel industry, you can feel the struggle without reading the numbers. You see your own numbers and as the days pass, you may be desperate for ideas on what to do to keep paying your employees and to keep your business running in some capacity. The good news is that, with many states reopening in phases, there does seem to be a little shred of hope starting to shine through.

But, without a vaccine for the virus, the impact the pandemic is having on the hotel industry is here indefinitely. Conferences, weddings, all those group events that many hotels and resorts make big money off probably won’t be happening for quite a while still. The World Health Organization (WHO) said that those thinking of holding events should consider taking steps such as increased frequency of transport to and from the venue, designated seating, adjusted venue capacity, and limited duration. Even when big events are safe to host again, many people who would usually be eager attendees may continue to be more cautious than they were before, which might result in them opting to stay home.

So, are there ways that a hotel can try to keep afloat when they can’t operate in their “normal” manner? We say yes. There are definitely some small solutions worth trying, especially if you own an establishment that isn’t part of a big chain, such as a boutique hotel or a local bed and breakfast. Although independently owned hotels have smaller profit margins than big brands, they also have less rules, and therefore more wiggle room for getting creative. Here are a few of our favorite suggestions for how to make up some of your lost revenue during this difficult time…

Encourage people with reservations to postpone their stay instead of canceling.

During this time, a lot of businesses across multiple industries have been tempted to give up without a fight. For example, many have offered full refunds for canceled shows instead of saying the dates will be rescheduled and some have shut down conferences instead of attempting to create a virtual version. This pandemic should shove businesses outside of their usual boxes.

As a hotel, one of the ways you can get creative is by running a campaign that encourages people to postpone their booked stays instead of all together canceling them. Have your employees suggest this over the phone, post about it online, and make it a part of your overall marketing message. Explain to guests how making this choice will help you keep the place running and allow you to continue paying your hardworking employees.

Make it easy for people to buy gift cards, and perhaps other items, online.

A lot of people are aware of the hit hotels have taken and are interested in offering their support. Aside from a “postpone not cancel” campaign, you could also suggest to your audience that they purchase gift cards. This way, when things open back up, they’ll be able to have a nice stay at your hotel, but you’ll receive the much-needed monetary support in advance.

Plus, there may be a few other ways for hotels to make money online. For example, check out the initiative Buy Now, Stay Later. Essentially, people buy something similar to a treasury bond that works like this: a $100 bond is redeemable for a stay at a later date and will mature to a value of a $150 credit after a minimum of 60 days. Something like this is even more tempting for people than a gift card because it’s value will actually increase.

Also, it has come to our attention that many boutique hotels have shops with more than just microwavable meals and overpriced water bottles. If you sell unique items at your hotel, such as local goods, try setting up an e-commerce store. Taking your shop online is another great way to keep making some revenue during this time.

Keep your restaurant open.

If your hotel has an attached restaurant or even just a kitchen that room service is prepared in, consider keeping that feature up and running. Make your menu available for takeout, and even delivery if you can. It’s also worth noting that many restaurants are re-opening their outdoor seating areas for dine-in service. Doing this could be a great way to encourage people to spend at your hotel if your state will not allow you to fully reopen yet, or even just to make up for other avenues of lost revenue, such as those previously mentioned events.

Re-think your communal spaces.

One of the reasons that restaurant patios have been allowed to reopen before indoor dining rooms is because there’s more and more evidence being released that the virus has a difficult time spreading outside. Because it is spread via droplets, it’s still very unsafe to be inside a crowded, poorly ventilated area. In fact, according to a study reported on by Business Insider that examined 318 coronavirus clusters in China, outdoor coronavirus transmission is indeed rare. In all but one of those outbreaks, which each involved three or more cases, the virus jumped between people indoors.

So, if you’re able to spend any time and money on updating aspects of your hotel this year, we definitely recommend focusing on your outdoor spaces. People are likely to be more comfortable socializing outside than inside, so cater to that trend. Plus, for everyone’s safety, guests should probably be discouraged from lingering around any indoor lobbies or lounges, so you could move what you normally offer in those areas to an outdoor space.

However, if people are outside but are still in close proximity to others it’s not a safe situation. That’s why it’s important to make sure that all of your seating is spread out appropriately. You can also consider if the styles of furniture you’re using encourage social distancing. For example, high top tables without seating make a great set up for someone to enjoy a drink with their party without getting comfortable enough to linger longer than necessary.

Stay connected to your community through social media.

All of these ideas might help you make up some of your missing revenue, but not if people don’t know about them. Take to social media and let your target audience and community know how they can support you during this difficult time, whether that be purchasing gift cards or ordering take-out. It’s easy to let marketing efforts slip when your main focus is simply getting by but updating your social media profiles is an easy and free way to stay in touch and reach out. It will also help you to ensure that people remember your hotel and get excited about their next stay, even if they may not be able to pick specific dates yet.

If any of these suggestions seem like feasible ways for you to bring in some revenue, we highly recommend giving them a try. People love to travel and miss having the opportunity to stay in a new place, so try not to throw in the towel. Your guests are excited to see you as soon as they can!

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