Don’t panic, even if the times call for it
Don’t panic, maintain connections with your customers and still plan for long-term growth. These are a few pieces of advice shared by Sherri Kimes, visiting professor at National University of Singapore (NUS) Business School, with the global hospitality industry amid the pandemic, during a recent webinar titled “How the Hospitality Industry can Survive the Crisis.”
The webinar is part of NUS’ “Navigating the New Normal” series, which are uploaded on NUS Business School’s Facebook page.
“The No. 1 rule is: Don’t panic. You need to think clearly to be able to create a strategy to get through a challenging situation such as this,” says Kimes, who also shared findings of a recent survey she conducted among over 900 respondents in the hospitality sector from 89 countries.
One result that struck her most, says Kimes, was that only 35 percent of respondents said they have a contingency plan in place.
“That just floors me. There’s a higher percentage in Asia Pacific—44 percent—but this is something that you really need to have. Obviously, you couldn’t have predicted this, but at least have [a response to], ‘what if something bad happens?’” she says.
One thing hoteliers and other industry executives can do is to keep a log of the measures they are taking to combat COVID-19, as Kimes says those who had done so when dealing with the SARS (Severe Acute Respiratory Syndrome) outbreak back in the early 2000s are now finding the information they recorded then very useful.
She further advises hoteliers to examine both the external and internal factors affecting their business.
The external, she says, are issues surrounding customers. “[Your customers are] also nervous, worried. What are their pain points, and how do you address them?” Kimes says.
Even with travel heavily restricted, Kimes highlights the need for hotels and other hospitality establishments to maintain good customer relationships—and one way to do so would be to strengthen one’s marketing. Citing a similar study done by her colleagues in Cornell University, which looked at which hotels emerged as winners and losers during the global financial crisis, Kimes says the research revealed that almost everybody cut costs, which included marketing expenses— but that “the winners cut back a lot less than the losers.”
Kimes adds: “To me, the particularly fascinating thing was that the winners actually increased their spending on other marketing activities, such as training in travel, local promotions and relationship building, as opposed to the more traditional type of marketing. So that’s something to think about, as you go through this [pandemic].”
In her own study, Kimes found that many in the industry are taking this time to provide community service—another way of maintaining connections to clients and guests. She cites the measure taken by the Singaporean government to “book” certain hotels as quarantine facilities as a “creative” and “win-win-win” way of offering community service.
“Whoever came up with this idea is brilliant, because from a public health perspective, we needed it, and it’s good for families of these people put in quarantine, and it’s also good for the hotels, because there’s nobody in them,” she says.
When it comes to the internal issues, Kimes focuses on two: operations and finance. With no guests and minimal staff, hotels now have the perfect opportunity to undergo repair and rehabilitation, she says.
Another activity that can keep staff occupied, Kimes adds, is training.
“In the study I just did, people talked about the training that they’re doing. There’s [now] virtual training, whereas before, especially for the smaller hotels, everything was done in person,” she says.
“Now we realize it doesn’t have to be [done] in person. It’s something we can do, to take our valuable employees, and help them with the skills they’ll be needing to improve themselves, and also be in the position to help the hotel in the future.”
As for cutting costs, Kimes says that while it may be inevitable, industry leaders should be mindful of what they plan to cut back on. Lowering rates, for one, is a no-no.
“Research I’ve done from 10 years ago surrounding this [shows that] people’s biggest regret was cutting rates. Lower rates won’t bring more people in, and it starts a price war,” says Kimes. “Lower rates don’t bring in more customers, they bring in the wrong customers.”
With economies starting to reopen, and businesses scrambling to adapt to the changes brought about by the pandemic, Kimes also tells hospitality players: Take things slow.
“In the study I just did, people talk about the need to be positive, but realistic. Are things going to go back to the way they were before? No, they are not. [So] I would take it very, very slowly, and I would spend time building relationships,” Kimes says.