Crisis planning for hotels: Best practices in communication, revenue management, and marketing
Experts say that COVID-19 could be the biggest shock to tourism since 9/11. The coronavirus outbreak has not only impacted travel in affected regions; it's caused the cancellation of the world's biggest exhibitions, including our own ITB Berlin.
More widely, we're seeing travel restrictions to certain regions and a huge downturn in tourism, especially in Europe and Asia. The biggest downtown by far is happening in China, where the ministry of transport announced that Chinese tourists had taken 73% fewer trips over the lunar new year holiday in 2020 compared with 2019.
Tourists are also traveling with trepidation — the threat of the coronavirus means that cruise ships or hotels are suddenly having to enforce strict quarantines. Knowing how to handle this kind of situation (including managing concerns from anxious guests) is a tall order that requires careful planning.
In these deeply challenging times, how can hotels manage the fallout from the coronavirus outbreak? And what wider lessons might be applied to future crisis management?
Crisis communication tips for hotels
Panic and misinformation can quickly spread in a crisis. If your hotel is placed under quarantine due to the coronavirus, clear and consistent communication will be vital — both internally and externally. Here are a few crisis communication tips to bear in mind:
Internal communication
First, ensure you have a solid internal communication plan in place. Your staff should be up-to-date on the latest news, your own crisis plan procedures, and ready to deal with "what if…" scenarios. Give them the opportunity to voice their own concerns and ask follow-up questions, and be sure to reiterate that employee health and safety is of utmost importance.
Your customer-facing staff also need to be ready to answer questions from guests. Consider carrying out role-play scenarios to prepare staff for a potential influx of questions from flustered and agitated guests (and possibly media outlets too). Above all, your staff will need to remain calm and clear to allay concerns where possible.
It's also essential that the answers your staff give are consistent. In the event of a highly stressful situation (such as a quarantine), the last thing you want is a mixed message being communicated by different members of your team.
Finally, make sure your internal communication plan is easily accessible via your own systems. Your staff should have a resource to check the information they're disseminating is correct.
Guest communication during crisis periods
When crafting a communication plan for guests, be sure to cover not just current and upcoming guests, but also recently checked-out guests, particularly if it involves a public health situation like the coronavirus outbreak. Aim to be as transparent about the situation as possible without inciting panic or giving away private guest information.
In your communication plan, remember to cover all possible channels of communication, including email, text, phone, and social media channels. In addition, update the homepage of your website with the most relevant news and information using a temporary page banner or a news section of the site, but do not replace your existing content with a temporary page or message. This is a major SEO no-no.
For an ongoing crisis, you may want to create an additional dedicated page that is SEO optimized (e.g. "Information about the coronavirus outbreak at ABC Hotel") and consistently updated with the latest news. This can help to counter any negative news media that may be showing up when potential travelers are searching your hotel on Google.
Our post on how hotels can mitigate the digital impact of natural disasters offers more essential communication tips, including:
- How to announce a temporary closure
- How to maintain your organic search rankings during a closure
- Nurturing reviews to maintain your hotel's online visibility
Adjusting your revenue and marketing strategy for crisis periods
It's inevitable that hotels will experience a downturn during crisis periods, whether it's a sudden drop from a major event cancellation (like ITB Berlin), or a gradual but accelerated downturn based on an ongoing situation (like increasing travel restrictions to areas affected by coronavirus). As a revenue manager, you'll want to ensure that you're managing the fallout properly. Some tips:
- Create an event within the Revenue Management System (RMS): This will help maintain an accurate forecast with the decrease of transient demand, and any cancellation of group bookings.
- Review booking cancellations: Is your leisure segment decreasing? Are you seeing a downturn from OTA or corporate business? In the event of a crisis, you'll need to determine if cancellation patterns are arising from specific market segments and then address these accordingly.
- Room night pick up: If your hotel has an increase in productivity, understand where the business is coming from, and from what channel. You can then aggressively market at the geographic regions (and use the specific channels) that are likely to drive more bookings, potentially compensating for a downturn in business from other market segments.
- Monitor airline flights for cancellations: By staying up-to-date with airline cancellations, you can prevent throwing away marketing dollars on regions where there's going to be a huge drop-off in tourists to your destination.
- Setting rates during crisis periods
As many hotel revenue managers learned the hard way during past economic downturns, dropping rates during times of crisis can greatly affect your RevPAR. It can be difficult to recover from this, so instead focus on figuring out how you can add value for your guests in other ways, such as offering packages for longer stays, promotions targeted at domestic guests or guests from unrestricted markets, or flexible cancellation policies.
Revenue managers using tools such as Pegasus CRS's Dynamic Pricing Rules can easily maintain their standard rate plans while applying rules to create special offers that can lift demand in strategic ways.
For example, if tourism from key geographic markets like China is down, you can encourage domestic or intercontinental travel by using geographic pricing rules to create package offers for tourists from those markets.
For travelers that might be worried about visiting your hotel market due to a crisis, you can utilize lead-time promotions (for example, 20% off of stays booked 60+ days in advance) to start creating demand for the future when the crisis is likely to be over. These promotions could also be backed by more flexible booking policies that allow for waived cancellation or change fees should the area still be affected by the crisis.
Once you've set your special offers in place on your website and booking engine, you'll want to ensure that you have a marketing budget set aside to start driving both awareness of your property and bookings on your site.
Investing in digital marketing
When you start to see that demand is recovering from the crisis and starting to rise in your own market, it's time to start investing in marketing again. Don't wait too long for rooms to start filling up through your third-party channels—aggressive direct channel marketing to your website can help you gain traction quickly and make up for the lost revenue during the downturn.
Top-of-funnel strategy
As interest in your destination picks up again, it's worth heavily investing in the awareness phase of booking (known as top-of-funnel marketing). Bear in mind that there'll be heavy competition for broad search terms (e.g. "hotels in London"). To generate top-of-funnel awareness, you'll want to stretch your marketing dollars by focusing on channels such as display networks, as well as TripAdvisor and Kayak CPM metasearch campaigns.
In particular, TripAdvisor can be a particularly useful channel for creating awareness and drumming up interest, particularly if your guests have been leaving good reviews about how your hotel handled the recent crisis.
Targeted bottom-funnel marketing
An important marketing tactic for driving bottom-funnel conversions is using tools such as Google Customer Match to personally target travelers most likely to book again: your former guests. Customer Match lets you upload a list of guest emails (that you've already collected and have permission to market to) and then specifically target those people with either display or search ads offering a promotional rate.
Be prepared for the unexpected
While the coronavirus is the big concern of the moment, tourism and travel demand is always at the mercy of uncontrollable events, including natural disasters and weather events such as the recent hurricane-force winds in Europe. As such, it's crucial that your hotel is prepared for the unexpected. If you need help with your revenue or marketing strategy in the event of a crisis, ask us how we can help your hotel to be "digitally" prepared.
About Pegasus
Pegasus combines high-tech innovation with high-touch service to give hoteliers more control over their revenue and distribution strategy than ever before. Following their merger with Travel Tripper, Pegasus enables hoteliers to better connect with their guests through an innovative and flexible platform of Reservations, E-commerce, Global Sales, and Business Intelligence solutions that help hotels drive demand and increase revenue and profitability, including the Pegasus CRS, named Best CRS 2022 by Hotel Tech Report. With more than 30 years of experience in global distribution, Pegasus serves hotels across 120 countries from eight offices worldwide in New York, Scottsdale, Las Vegas, London, Paris, Frankfurt, Tokyo, and Hyderabad. For more information, visit www.pegs.com.
Nancy Huang
Senior Marketing Director
Pegasus
