Hotels in the time of COVID-19: lessons learnt from around the world

Gil Karni, CEO at Leumi UK, outlines his expectations on changes within the hospitality market.

Causing disruption across the globe, the coronavirus pandemic has turned the economy on its head. With widespread restrictions on movement, consumer spending has reached devastating lows, and industries such as travel and hospitality have been gravely affected as a result. As the UK continues to emerge from the crisis, local hotels can look to their overseas neighbours to determine how best to navigate the journey ahead 

As hotels look to open their doors from the start of this month, many will be questioning what lies ahead and, more pressingly, exactly how long it will take for business to return to normal. As countries continue to open their borders and movement slowly returns, stakeholders can now look to welcome tourists both domestically and from overseas, with travellers keen to make the most of the summer months while the opportunity presents itself. Yet recovering from over three months’ lost revenue will not be easy, and hotel owners will need to be creative to ensure they are able to meet demand while abiding with the rules of the “new normal”. 

Financial burden

Until recently, a key concern for hotel owners was to ensure they fulfilled their working capital needs at a time when income had all but dried up. With staff put on leave in an attempt to cut costs and hotels temporarily closing down in a bid to limit damages, the effects of the pandemic have been far-reaching. 

Of course, for many hotels, lockdown presented much more than an inconvenience. For those still in the construction phase, for instance, cash-flow shortages were magnified and financial institutions were forced to step in, postponing interest payments in some cases and extending working capital loans in others in order to cover the shorter-term losses caused by the pandemic. Governments, too, have intervened, providing financial support for corporates and enabling them to continue with projects that would otherwise have come to a standstill due to social distancing restrictions. 

As for the hotels themselves, many have had to get creative in the interim, taking advantage of the recent upsurge in the use of video conferencing platforms and social media to keep in touch with customers, while increasing their scope by publishing content created by members of staff. By conducting online marketing activities, hotels have had to rethink the fundamentals of their business models to better encapsulate the image of their brand and build on a more engaging relationship with their customers. 

Certainly, as establishments return to financial independence and look to recuperate lost revenue, making sure they continue to capitalise on changes and progress made in the interim will be key to ensuring business returns to health as quickly as possible. 

Following the lead

In order to welcome guests post crisis, high criteria for hygiene and sanitation will be an industry standard. As part of this, countries have been introducing measures to ensure compliance. In Singapore, for instance, the tourism board has launched a clean auditing initiative that ensures hotels comply with stringent hygiene standards. To be awarded an “SG Clean” quality mark, hotels must appoint a manager to ensure compliance with health and travel advisories, guidelines, and government orders on the coronavirus, while overseeing the meeting of hygiene criteria. Singapore has already certified many businesses – including the Grand Hyatt Singapore, where a COVID-19 outbreak occurred earlier this Spring.

Closer to home, and like the UK, European countries such as Spain, France, Austria and Germany have tentatively loosened their lockdown measures as borders reopen. Similarly to Singapore, hotels are implementing high levels of hygiene awareness in order to prevent a second wave of the virus, with international hotel brands promising to elevate cleanliness standards to meet new health and safety criteria and recommendations. Marriott international, for instance, which operates in 131 countries internationally – including 40 across Europe – has formed its own ‘Global Cleanliness Council’ to promote higher standards of cleanliness in line with current challenges, with technology such as electrostatic sprayers being implemented to disinfect both communal areas and guest rooms and contactless access to check-ins, room access and room service being introduced in over 3,000 of its hotels to minimise person-to-person contact. 

But it’s not just down to hotels to get the tourism industry up and running, and when it comes to recovering from problems in this area, Israel leads by example. With excellent crisis management protocols in place – including frequent updates on tourism trends, consistent engagement with audiences and strategic advertising campaigns, businesses have instilled confidence in the tourism sector, in turn speeding up the recovery process. In turn, this has a knock-on effect on hotel occupancy, with travellers turning to local establishments as part of their visit. What’s more, hotels can further maximise recovery by hiring an independent project manager, according to Oren Drori, an Israeli Tourism and Global Marketing Expert and Consultant. He advises that hiring someone without a personal interest in the business can provide neutral, unbiased guidance on the fastest path to recovery. 

Looking ahead

As UK hotels prepare to reopen, changes are to be expected – and this includes adjusting to different types of visitor. Despite air travel being permitted, many people will still be unwilling to travel overseas until the virus is brought further under control. For the UK’s larger cities, which are used to receiving high levels of international visitors, this will likely signify a far bigger focus on domestic tourism. As Dr. Eran Ketter, Tourism Resilience Advisor and Author, notes, capitalising on this opportunity will be crucial to business recovery and presents an excellent opportunity for the tourism industry to challenge existing attitudes while remaining proactive. 

Of course, while preparation is important, there is still uncertainty over how the future will look for the hotel sector, and when – or even if – things will return to pre-COVID-19 normality. As such, hotels must remain flexible and will need to ensure they adapt seamlessly to societal changes, adjusting cleaning practices and digitising payment processes and documents such as menus and services in order to ensure the safety and comfort of their clients. In turn, the recovery phase will very much depend on agility and hotel management’s ability to create maximum value for customers with minimal resources. 

Bank Leumi (UK) plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

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