Attracting Travelers After COVID-19

As states and countries relax their restrictions on quarantine and social distancing, airlines and hotels will likely start offering generous discounts in order to generate demand and entice travelers back out into the world beyond their front doorstep.

A major step towards recovery in this segment is likely to come when larger corporations relax business travel restrictions, and other smaller companies follow suit. It is estimated that 5-10% of business travel may be eliminated permanently due to reduced travel budgets, business closure, unemployment, and the growth of online meetings.

 A survey conducted by LuggageHero, indicated that 58% of Americans are planning to travel between May and September 2020, as long as their destinations aren't in quarantine.

Some analysts predict that air travel will not return to full strength until at least mid-2021 which means that leisure travelers are more likely to be taking staycations or car trips to surrounding states.

2020 may bring the re-birth of the road trip and hotels should pay particular attention to their drive markets as the likelihood is this segment is going to be the most likely to celebrate their post-quarantine freedom by taking a short trip within 2-3 hours' drive.

For these reasons, along with continued fear around the pandemic, leisure travel may recover at a slower pace and only recover to previous levels once a vaccine is developed.

The best way to manage your segmentation mix is to take a data first approach. Segment towards drive markets and test what works before expanding your reach and media spend. Also try to understand in-bound travel data as an indicator of where guests are arriving from and choose to target those areas first.

Time for the Hotel Industry to “Remove the Box”

The hotel industry is one of the worst-hit industries during this crisis. A lot of studies have been conducted to help us understand the impact on the economy and our organization's bottom-line. Industry experts, through their various associations, have predicted that the average hotel occupancy in Malaysia for the year will stand at around 25% or less.

According to a recent study by Malaysia Association of Hotels (MAH), the industry is looking at a potential loss of RM6.3b in rooms revenue alone. Assuming rooms revenue accounts for 60% of the total hotel revenue, with F&B and other income accounting for the remaining 40%, the industry is facing a RM10.5b in potential losses.

MAH represents about 1,000 hotels out of the 4,880 hotels registered with the Ministry of Tourism Arts & Culture (MOTAC). However, these 1,000 hotels with 164,000 rooms represent 56% of total rooms inventory available throughout Malaysia.

 The number of hotels closing for business is increasing by the day, indicating not only loss of business, but also loss of jobs. The current estimate is that 1 million travel industry personnel (including hotel, airline, cruise and travel agents) will lose their jobs by the end of this year.

While we take stock and moan how the hotel industry's poor prospects, let us focus our attention on what we can, and should, do moving forward.

According to a study by the University of Singapore Technology and Design, China is expected to be the first to get back to normalcy while Malaysia's magic date is predicted to be July 6. Whether we like it or not, we should look at China as one of our main feeder markets, besides the domestic market of course. Consider appointing representatives or affiliates based in key cities in China to work with online platforms and mainstream travel agents there and start re-promoting Malaysia as a destination. Hoteliers need to actively prepare for this, and as soon as China reopens its doors, hotels must already be "Chinese friendly" at all service touch points

A financial reprojection is necessary to understand your hotel's new breakeven point. We often hear that the breakeven point (BEP) in an operating hotel is at 40% occupancy levels

At least for the short to mid-term, hotels will be looking at domestic travellers as a main source of customers. This will indeed be the fastest strategy to regain some occupancy. Malaysians still love the "Cuti-Cuti Malaysia" short getaways

Hotels may in the near future need to be certified "Social Distance Compliant" by authorities after they have practised and passed SOPs set by authorities. This is going to be very similar to the HALAL certification we see displayed on public areas. This could be something we will all be used to in the near future.

Automating hospitality in times of social distancing

The global COVID-19 pandemic has brought the travel and hospitality sectors to a halt. The calls to enact social distancing measures mean no more travelling or meeting friends at pubs or restaurants. The consequences are devastating for airlines, hotels, events, restaurants etc. and result in closures and job loss around the world. Although governments have taken various measures to address these, we can expect consumers to remain cautious when interacting with others, thus continuing the negative impact beyond t he end of the crisis.

 Giving a careful consideration to immediate and long-term impacts of the pandemic and social distancing measures on overall consumer behaviour and business continuity, integrating automation into service operations could help addressing some of the issues around safety and access

Attitude Change

 In this period of isolation, we are witnessing how people change behaviours that long have been taken for granted: shaking hands or standing closely next to somebody to order drinks at a bar

Importantly, having limited mobility and restricted access to services while in lockdown may bring about felt needs for automated services and self-service technologies. Some consumers may get used to ordering meals online or through an app and opting for 'click and collect' or delivery for other shopping needs.

Beneficial Automation

As suggested here, key to implementing automation in travel and hospitality is ensuring that the technology will bring value and benefits to the industry and its people. We have seen cases where robots and other automated machines can help with the operational upkeep of buildings and facilities. Hotels employ robots to sanitise rooms and common areas, freeing staff from risk of contamination

With the likes of World Health Organisation (WHO) implementing chatbots to spread information about COVID-19, businesses can use similar conversational agents to engage employees and customers while they are on lockdown

Responsible Adoption

Looking into the future, the emphasis should be about responsible adoption of automation, whereby technologies augment people in delivering what the businesses do best: hospitality. As outlined here, adoption of automation in the travel and hospitality sectors should be balanced with priorities to invest in people. Perhaps while letting the robots handle things at work, we should give employees opportunities to up their digital skills at home, but only if they wish to.

.

Two new appointments at Palladium Hotel Group

Gabriel Rodriguez takes on the position of Director of Sales in Canada and Hugh Goodwin is appointed Director of Sales - Strategic Accounts for the Spanish hotel chain.

In his new position, Gabriel Rodriguez will strengthen the group's relations with Canadian travel agencies. He is a sales and marketing professional with more than nineteen years of experience in the travel industry, particularly in North American markets

Hugh Goodwin will be responsible for relationships and overall account management for strategic clients. He is also an established professional in the travel, airline and hospitality industries.