“The best part of our industry, given the effects of COVID, has been the deeper understanding of how and why people travel.”
The hospitality sector, like most travel-related sectors, has been hugely impacted by COVID-related disruptions. There are no easy solutions and most involve the loss of jobs and a shift in how the products and services, as well as how the producing market segments, are approached. First, the business must scale quickly to avoid losses. To protect flow through, a reduction in revenues must be met with an equal reduction in expenses. This means reviewing all expenses, service agreements, advertising, operating systems, payroll and benefits, and so on. We cannot assume that existing agreements cannot be altered.
Next, we need to pivot our focus on market segments that have the highest propensity to produce. If business travel and conventions are no longer providing revenues, we must turn to the local, and drive market transient audiences and social events that will continue to occur. We can use consumer interest in escaping their homes and typical surroundings by promoting length-of-stay options, outdoor activities, remote office options and sprawling space that our environment in vArizona provides.
Then, we need to adjust our business model to best protect our clients and the team members that we continue employ. This involves designing a health and sanitation program that meets and exceeds government suggested standards so as to ensure we have the buy-in and training of all team members.
Finally, we must rebuild. It is very similar to opening a brand-new hotel or resort, with the exception that there is a larger labor pool available — so those that can recover first have the opportunity to arm themselves with the most qualified associates available.
Most people understand that it is easier to run a “busy” business than it is to run a business with peaks and valleys for business levels. Our strategy is to focus on layering in a consistent amount of business so that we can retain and add team members. We also ensure that all leaders in our organization know that they have the ability to scale to business levels. Strategies include adding utility players to work in different departments, changing responsibilities of the past to encompass new areas of focus, and making sure that we are hiring the right candidates for these evolving job descriptions.
The best part of our industry, given the effects of COVID, has been the deeper understanding of how and why people travel. Sure, there will be a permanent shift in how certain business is conducted, but society for the most part needs travel in their life agenda to be able to connect, discover and explore. And while many businesses are simply pausing their standard travel practices, there will soon be a realization that those businesses that begin traveling and investing in global sales growth strategies through travel will be the businesses that rebound the fastest.
On the leisure side of travel, we have learned that the past travel trends of people taking eight to 10 trips a year that are three to four days in length will undoubtedly be replaced with three for four trips a year for a week or longer stays. This allows for hotels and resorts with more residential-style accommodations to gain traction and it gives those travelers the ability to appreciate their destination more and provide additional time to unplug and recharge.
While there are other aspects I could expand upon, such as the advancement of technologies in the touchless realm or the pivoting of to-go meals or the great rebound of golf, the appreciation of travel is what I feel is going to resonate the most with any and all people who have been quarantined, asked to work from home, or simply want to go somewhere that is more vibrant and open than their current environment.
In 2021, we will witness the slow and steady growth of the travel industry. I have to commend Arne Sorenson of Marriott Hotels with his prediction back in March of 2020 that it will take this industry until 2023 to be able to recover to the business levels of 2019, and that even then it will not be the same. I thought that was a pessimistic statement back then, but now I feel it was amazingly accurate. Recovery will be directly impacted by the amount of COVID cases and global travel restrictions in place. When a vaccination or a treatment can be brought to market, obviously the speed of the recovery will increase.
Strategies in the hospitality industry will revolve around consumer sentiment, pricing controls and labor. Beginning with consumer sentiment, there is a new travel experience evolving from all of this — how rooms are cleaned, how services are executed, and how the majority of travelers are perceiving hotels and resorts adapting to and adopting these changes. These added initiatives all have new expenses tied to them, so it is likely that travelers will see price increases across the board for accommodations and services at hotels and resorts.
And to further accelerate those costs, labor costs are increasing faster than ever before. While some may point to the labor market having more opportunities due to the reduction of workforce in the travel sector, many of these people have already found other occupations or are not willing to return to an occupation that deals with the general public in fear of health issues.
To the business community, I would suggest prioritizing travel expenditures with businesses that can directly impact/improve your local community. If you are supporting a locally owned and operated business, your money is supporting local employees and owners, keeping those dollars in that community. Sure, it might take a little research to determine which establishments meet those criteria, but there are many tools to use, like Local First Arizona and others.
A dedicated and passionate sales and marketing leader with more than 25 years of experience specializing in hospitality, brand positioning, revenue generation and team development, Jesse Thompson is the area director of sales and marketing for Hotel Valley Ho in Scottsdale and Mountain Shadows Resort in Paradise Valley. He is skilled at creating omnichannel marketing strategies that execute online and offline tactics to engage consumers while providing unique and memorable experiences. Thompson has a proven track record of driving profitability utilizing creativity, digital and data-focused initiatives.