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Key Takeaways from Reports on Impact of COVID-19 on Hotel Industry
When COVID-19 struck the world, the hotel industry was one of the first to be adversely affected and it is expected that the industry will be one of the last to recover. While this is a grim picture to behold, one needs facts, numbers and some expert opinions to understand the situation to chart the way forward for their businesses. However, more often than not, the reports and studies published are complicated, long and riddled with numbers. So, here we have decoded a few of the recently published reports and listed down the key takeaways.
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Report – Hospitality and COVID-19: How long until ‘no vacancy’ for US hotels?
Publisher: McKinsey
Co-authored by Vik Krishnan, Ryan Mann, Nathan Seitzman, and Nina Wittkamp, this report examines the various set of recovery scenarios for US hotels in the COVID-19 times.
Key Takeaways:
- The researchers have narrowed down two scenarios that will most probably occur. First where the virus is contained and the growth of the hospitality industry returns. And second where the virus recurs resulting in slow long-term growth and a muted world recovery.
- The economy hotels are doing much better than the others. For example, in May 2020, occupancy was less than 15 percent for luxury hotels and around 40 percent for economy hotels. This is because it is easier for economy hotels to reduce variable and semi-fixed costs. Also, luxury hotels need occupancy rates 1.5 times greater than economy hotels.
- According to the McKinsey Consumer Leisure Travel Survey, which surveyed 3,498 travelers from five countries in April 2020, travellers want additional health and safety measures.
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Report – State of the Hotel Industry Analysis: COVID-19 Six Months Later
Publisher: AHLA
This report was published on 20 August, 2020 by the American Hotel & Lodging Association or AHLA. The report was produced using publicly and privately available data and polling from national and industry partners. Offering a grim picture, the report uses numbers to establish the fact that the hotel industry has very tough way ahead.
Key Takeaways:
- Four out of every ten hotel employees still remain unemployed. 37% of hotels have been able to bring back at least half of their full-time employees, while 36% have been unable to bring back any furloughed or laid off staff. This has resulted in hotel workers losing more than $1.7 billion in earnings each week.
- Although most hotels are open for stay, many consumers are yet to resume travel. According to a survey, only 33% of Americans have travelled for leisure or vacation since March, and only 38% say they are likely to do so by the end of the year.
- Almost 65% of the hotels remain at or below 50% occupancy.
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Report – The Hotel Recovery: How Smart Brands Can Make Short-Term Sacrifices To Gain Long-Term Loyalty
Publisher: Forbes
In this report, authors Adam Deflorian and the Forbes Agency Council discuss a few marketing ideas for hoteliers that could come in handy once the world is ready to get back to normal. He encourages hoteliers to think out of the box when it comes to short-term marketing decisions.
Key Takeaways:
- Data is power, use it wisely Key point here is to be aware of your guests and treat them accordingly. For example, an older guest will require more care as compared to a young guest.
- Be empathetic, do not force feed promotions He urges hoteliers to not be unrealistic while approaching guests with pomotions. He further stresses on the importance of making travel easy for guests and transport them to a world that feels familiar and safe.
- Sanitize thoroughly “Enhanced sanitation is a significant financial investment,” Deflorian writes. Communicate the hotel’s outstanding sanitation investments through email campaigns, blog publications, influencer sharing and ultimately PR efforts to gain pick-ups in high-profile publications
- Rethink Loyalty Programs: Since travel has virtually come to a standstill, there will not be many people who could take advantage of your schemes.
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