5 ideas to monetize the hotel in the COVID-19 context
The challenges facing the hotel industry today are unprecedented in recent history, even for those, like me, who remember well the 2009-2012 crisis. Therefore, it is essential, even more than before, to rethink strategies in a disruptive and courageous way, without fear of questioning assumptions and thinking outside the box.
As a contribution to the exercise proposed to me, I present five ideas that are five challenges to hotel owners and managers.
Idea 1: New paradigm, new office
In a time when travel is avoided at all costs, and remote work has become not only socially accepted but also accessible to most management positions, there is an opportunity to create new individual workspaces that ensure all functional, privacy, and security conditions without the inconveniences of staying at home. Renting hotel rooms, suites, or even meeting rooms on a weekly or monthly basis could be a practical and convenient solution, taking advantage of all the facilities and services that the hotel provides – gym, spa, restaurant, room service, etc. While logically targeting a high segment of the corporate market, it is also possible to work at different levels of the market and budget, depending on the category and location of the hotel.
Idea 2: Shift to lease – permanent or temporary
In units closer to traditional housing configurations – apartments and aparthotels, for example – moving to the traditional rental market can be an opportunity. Especially considering the shortage of supply in major cities and, for those willing to make a more permanent change, the tax incentives for affordable rentals. For those who prefer not to commit permanently, there are seasonal markets, such as student housing, and temporary needs, such as postoperative medical recoveries. In both cases, solutions compatible with a temporary approach that ensures, for example, a return to normalcy before the peak of summer. This strategic option will obviously have significant implications for profitability, with lower revenues and higher operating costs. But there are also savings, for example, in commissions and front office. In reality, it is another business. And many will prefer to have a worse business than no business at all.
Idea 3: A hotel for periods of prophylactic isolation or quarantine
If the hotel operator has confidence in all the hygiene and safety procedures set up in the context of the “Clean & Safe” label, they can leverage it as a ticket to an entirely different business – Covid isolations and quarantines. Whether in the city center – with the psychological advantage of proximity to family and local hospitals – or in a resort setting – with the advantage of turning two lost weeks into a relaxation opportunity – a hotel will be, in most cases, a more attractive option than staying closed in a room without seeing family. In addition to expertise in room cleaning and hygiene or laundry collection, the hotel also offers a set of highly convenient services, such as room service or a concierge tailored to this specific customer. Warning: regardless of the practical benefits, selling the idea of spending a period of uncertainty away from family and in an environment of potential contagion will always be a challenge. But that’s what marketeers are for…
Idea 4: The hotel experience… at home
The idea of bringing hotel services home is not new. There are already online platforms that allow you to have a chef at home, a bartender for a special cocktail with friends, or a massage with a ritual you experienced during a visit to that spa. However, these remain niche products, far from people’s routines. Here, the strength of the hotel brand can be crucial to convey the confidence the market needs to make the service at home as normal and routine as going to a restaurant, especially at a time when leaving home is a second thought. Who wouldn’t want to have a Sunday brunch or a special dinner prepared by the team at the Ritz or another prestigious hotel?
Idea 5: A strategy for my restaurant
As painful as the reality may be for a hotelier, it is undeniable that hotels, in general, have a huge difficulty competing with the dynamics at the concept and promotion levels of street restaurants. With honorable exceptions, the hotel restaurant works for its guests and fails to develop a concept that makes it autonomous and appealing to the local market. It also lacks, typically, the promotional and permanent novelty dynamics that the market demands, ignoring the potential of social media or specific restaurant platforms, such as Zomato, The Fork, or Uber Eats. If the accommodation market has collapsed, there is really no alternative but to define a new strategy for F&B. It is necessary to develop an appealing concept for the local market, create a brand that makes it autonomous from the hotel, create an appropriate marketing and distribution dynamic… and go into battle.”
Written by Pedro Rodrigues Catapirra
October, 2020
This article was published in Ambitur. You can access the printed version here.