It is inspiring to see some hotels starting to open around the world. As the industry commences its bounce back, clearly supply will outstrip demand. Basic economics shows that generally in those cases, rates start to fall in order to entice customers and fill empty hotel bedrooms.
- Is that the right strategy?
- Will it be a race to the bottom?
- How will we ever then recover rates in the future?
- What about the commission to OTAs etc?
- Cost per room actually increases with these new protocols so shouldn’t that be passed on to the customer?
There are many sides to this argument and each company must decide on its on strategy. Below are a few of my initial thoughts:
- Currently we all have an obligation to build confidence back in our industry. Hopefully, the first guests will soon encourage others and we can start to build momentum on the back of this. We must not underestimate the current nervousness of would be travellers.
- Many hotels will be focussing on the domestic market more seriously and this change of market should dictate a change of rates. It is not the same as before.
- As such, we should consider offering very attractive package rates on a temporary basis to attract guests.
- It is not all about rate. It MUST also be about experience and what enjoyment, pleasure and piece of mind a guest will have.
- There should be some sort of joined up approach, especially in big cities where international business is not relevant for the time being. This should ideally be headed up by the tourist board, who could work with hotels to include additional packages and add value to an overnight stay.
- Consider offering multiple rooms at no extra cost. Families could therefore have 3 rooms for the price of 2 and allow children to sleep in separate areas.
- OTAs need to be aligned as well and help ensure that we can all take a fair piece of a smaller pie.
Of course, this is all very easy to say but I really believe that now is the time for creativity, ingenuity and true commercial thinking. I know our industry can do it but we must think quite differently from now on.
Please let me know your thoughts below and reshare.