The Coronavirus pandemic is having major implications for business all over the world and all accommodations are currently seeing a drop in incoming bookings as well as a high amount of cancellations.
For that reason, we would share the most relevant tips on how we in the Revenue team of GODO Suite are working on countering this. These are based on the expertise, current market developments, as well as best-practices that we have picked up from fellow industry professionals.
Being less restrictive short term
There is currently a great uncertainty in the world, meaning that guests are less willing to book non-refundable rates. Therefore, in order to cater to the market while staying on a competitive level, a solution is to forego the non-refundable rate for the near future and lower the standard rates to the level in which that the non-refundable used to be at. By doing this, you are adjusting to the market situation while at the same time not hurting your bottom line.
How to block certain rate categories for a number of days prior to arrival varies depending on your setup but if this is mapped from Godo then there is a specific function for this.
Example: If your standard rates are €100 and your non-refundable rates are 10% cheaper (i.e. €90), block the non-refundable rate for e.g. 45 days and lower the standard rate to €90 for those coming 45 days.
Promote changing dates (or give vouchers) instead of just canceling
Guests are willing to travel and still have the same buying power, it is only the matter of them not being able to travel in this given circumstance. By promoting a change of dates for standard bookings and not accepting cancellations (only date changes) for non-refundable bookings, you can retain some of your business for when the business starts resuming to normal. A good alternative to date changes is also to give vouchers for future stays instead of reimbursement.
Unfortunately, the major channels are taking their own actions on this and therefore this is not always an option, it is however advisable for eligible bookings (e.g. direct bookings).
Do not dump rates but stay within your compset
When the business starts to slow down, or drastically drop, which is the case here, it is easy to enter panic mode and start slashing the prices. It is important to remember that the travelers that are still out there have the same purchasing power as before. While we are to some degree fighting for scraps, we want to remain competitive mainly towards what we define as our competitive set (compset), which might mean having to reduce prices slightly to remain appealing. However, keep your variable costs and brand image in mind before resorting to drastic rate reductions.
Highlight the precautions that the hotel is taking to counter the virus at your property
Many bookers are justifiably scared and as such, will try to opt for properties that they deem as safe. In order to verify this, the first place for them to make this judgment is on your property website. For this reason, if you are taking actions to prevent spreading (e.g. extra cleaning of common areas, hand sanitizer in the lobby, informed staff, etc.) highlight this prominently on your website.
Start setting future rates early
Despite that fewer bookers make reservations with arrivals in the near future, we see bookings coming in during fall and the upcoming year. As the market reaction from the current uncertainty extends the booking window outside of what we believe to be affected by the pandemic, start setting rates for at least the whole of 2021. Non-refundable bookings far into the future can also help generate the current cash-flow needed to stay afloat during this lower occupancy period.
We will bounce back
There is no argument that this has catastrophic short-term effects on the hospitality industry as a whole. There are several predictions on the future development, but generally, they agree on that we do not know as of yet how long it will last and it is all up to the pandemic in itself and the world’s ability to counter it. The silver lining is that once the pandemic starts to reduce and restrictions loosen again, there will be a world full of people who have not spent their money on vacations, have taken fewer holidays, and that has an urge to travel. As long as we as accommodation providers are able to ride it out, there is a potentially great market ahead.