By Giovanni Angelini
OVERVIEW, SUGGESTIONS, GUIDELINES FOR A PLAN OF ACTION
IMPACT OF EPIDEMICS AND PANDEMICS ON HOSPITALITY
Part 1, COVID-19
Part 2, Hotel’s Plan of Action
Part 3, At Corporate Level
Part 4, For training purpose
Part 5, Embracing the New Normal
Part 6, Effective Communication in Times of Crisis
Part 7, Heal and Thrive in a post-outbreak world
Part 8, Destructive Crisis: Reflections-Observations-Views
Part 9, From Pandemic to Endemic
Part 10, Two Well-being & Revenue Opportunities brought to the forefront by the Pandemic
Part 11, On Track to Recovery
This paper will only address major epidemics and pandemics of the past 2 decade as they have directly impacted on the travel and tourism industry. We all have to accept that epidemics/pandemics come and go and have done so for centuries. History reminds us of the two major pandemics that the world has faced; the “black dead / bubonic plague” catastrophe of 1346-53 with roughly 200 million casualties and of the “Spanish flu” pandemic of 1918-20 that killed well more than 50 million people. The most important part is to learn from all of those disasters and we all should try our very best to prevent them and also be ready (individuals -organizations-governments).
[Situation after 11 months (Jan-Dec 2020) and no indications yet when the crisis will subsides]
Recent Epidemics and Pandemics
- SARS (severe acute respiratory syndrome) 2003, origin; Guangzhou-China.
No. of world-wide cases; 8,437, No. of casualties;813 (9.6%) (epidemic)
- H1N1, pdm09 Virus (Swine Flu) 2009-2010, origin; Mexico/(USA?)
No. of world-wide cases; over 60M, No. of casualties;250K-500K (pandemic)
- MERS (Middle East respiratory syndrome) from 2012, origin; Saudi Arabia
No. of world-wide cases; 2,494, No. of casualties; 858 (34.4%) (epidemic)
- COVID-19 (novel coronavirus) from late 2019 to (ongoing), origin; Wuhan-China
As of Dec 8, 2020; No. of cases;68,500,000; with 1,560,000 casualties (2.2 %) (pandemic)
(In the mid of a major worldwide outbreak, that as of this date is affecting 218 countries and territories, and no indication yet when it will peak and eventually when it will end. Our hearts go out to the many thousands in our industry who have lost their jobs for no fault of their own and to the many organizations that are forced to go out of business. Let's hope and pray for better times ahead).
Epidemics and pandemics are in general very disruptive for the hospitality business, some more disruptive than others. The outbreak of COVID-19 has devastated the global travel and tourism industry on a scale possibly without precedence in modern history. A few countries/territories within Asia experienced a similar situation with the outbreak of the SARS virus in 2003 but that was more of a regional epidemic and it lasted about 3.5 months while COVID-19 is a worldwide pandemic of a gargantuan scale, it spread much faster and it will last considerably longer as without a vaccines, the virus will continue to spread from epidemic to pandemic and now to endemic.
As the virus and infections are spreading very fast, countries around the world have imposed sweeping travel bans and advisories, some more severe than others, including lockdown/closing of borders with direct impact on hotel business. Temporarily, many airlines grounded most of their planes and a number of hotels had to close down and of course putting jobs at risk. In this labor-intensive industry, people are the best assets for any travel and tourism organization.
Retaining good people is a priority for most but under this drastic drop on the volume of business, shrinking of payroll becomes a must and all organizations will have to make very difficult decisions including large pay cuts, unpaid leave, shorter working week and others. This may be adequate in some instances but unfortunately, many companies will also be forced to let people go plunging thousands of families into terrible hardship as there are no jobs out there. Handling of this unusual large layoff/furlough of people is perhaps the most difficult and most painful task for any caring leader, very sad indeed.
Travel and tourism is the world's largest industry, it contributes 10.4% of global GDP and employs 319 million people (pre-pandemic statistics). The impact of the loss of business and, consequently loss of jobs/high unemployment, is so huge that it is sending the world economy into a tailspin with most countries/economies falling into recession. "A grounded planet with almost all the world's economies to their knees".
The situation has rippled through the whole travel and tourism industry in a way that we've never seen as fast. Most/all of the travel-related organizations, the small and medium-size in particular with depleted cash reserves, will be devastated and in need of urgent financial assistance in particular if the situation continues for long time. The industry may be faced with bailouts, liquidation of assets, sale/mergers and other unpleasant situations.
This crisis is a clear reminder of the fragility of the industry and of the world we live in. And all of us in this business have to ask ourselves a fundamental question on what our respective brands stand for when it comes to social and community causes, safety, and environment. What is more important to us and to the industry, corporate profit or people?. And in these lines, will this crisis change the consumer/guests' priority on selecting a lodging facility in the future? Will we see more conscientious travelers focused more on sustainability, care and protection of this disordered and sickish world? And what brands have to do to earn the "trust" of the caring travelers in those crucial areas?
One of the lessons we have learned from the COVID-19 pandemic is the importance of acting early and fast by all and for all sectors. Early intervention, meticulous tracking, and decisive actions are imperative as those cannot be delayed. Must for any organization to be prepared at all times to face and tackle any type of crisis. In this case, many countries were complacent at first and once they realized the size of the problem, they went into overdrive to make up for their laxity. By this time, the contagion had spread and out of control. And in most cases, countries are experiencing new waves of inflections.
With the pace of economic integration and globalization in the past few decades, we all now live in a global village. Person-to-person contact is now so frequent and intense that the world is all more vulnerable to new epidemics and pandemics and outbreaks will happen. The virus does not respect borders and practically impossible for countries to shut-down in full. This why governments, and the private/business sectors, must be prepared at all times, both are in need of strong leaders who are in need to put science before politics.
This outbreak has raised serious questions about global public health security and of the enforcement of health regulations around the world and the lack of closer global cooperation in research, development, and production of quality, safe and effective medicines and vaccines. The world may be better off with less diplomatic tensions and political debates and focus more on overhauling economic globalization, restructuring global governance and reshaping geopolitics.
Impact on the way we live & behave?
Will the recent coronavirus (COVID-19) change how we live? And will it change bad habits? This virus is a reminder that the world is not as controllable as it appears to be. We need to recalibrate and reevaluate our life to what is really important and put an end to the selfishness.
The outbreak may bring a much-needed end to an era of economic excess and overindulgence/consumerism and of taking advantage of the systems put in place by the politicians. The short and the long term effects of this virus on individual finances is of significant concern. But something had to happen to halt the headlong rush towards the perdition of over-indebtedness, overpriced assets, and corporate greed. Those are not sustainable. Things may not be the same again and the world has to change to a better and practical balance. And accept the fact that we all be poorer.
Even after it subsides, the COVID-19 pandemic will have wide-ranging and lasting repercussions on our lives. The recovery of our shattered societies depends on our deep examination not only on personal hygiene, on how we live, on how we spend and travel, and on how we treat friends, strangers and ourselves. But also on how governments, at local-national-international levels, have failed in their basic duty to protect citizens, and how they must learn and improve.
All over the world, people are slowing down, reflecting and are waking up to a new reality. And let's hope that the present hard time makes people stronger and can come out of the crisis wiser than before.
For time being, take care of yourself and of your family. Remember the basics in hygiene, social distancing and isolation as much as possible.
What have we learned from this fast-spreading and deadly outbreak, COVID-19?
(This is unlike anything we've ever experienced and an opportunity for all of us to learn from this abrupt disaster)
A pandemic is the most serious destabilizer, by any standard, on the hospitality industry and the most severe damage it can do to put our business to a halt. The worst crisis ever to hit the travel industry, a cruel blow. As caring hospitality professionals, we learned that during those unsettling times, both physically and emotionally, the safety and the health of the people come before revenue and profits, "health before wealth".
It is a clear reminder to all of us how precious is our health and our families. A reminder that in front of a nasty virus, we are all equal and that all human beings share a common destiny regardless of race, ethnicity, religion, ideology, social position, rich-poor, location, and political beliefs.
We learned that Governments should have been paying much more attention to investing in the public health care system and be better prepared for emergencies and catastrophes and also that the authorities must act swiftly and aggressively when faced with dangerous viruses, not playing politics and pointing fingers when the crisis breaks out.
Learned that International cooperation, transparency and timely sharing of first-hand information on all aspects of the virus, including tracking, spread patterns, changing symptoms and possible preventive measures should be made mandatory. Countries must be on the same page when it comes to multilateral global governance and not isolate themselves. This is a time when the world needs to come together to fight the pandemic.
That a pandemic affects personal livelihoods and Governments must be prepared to offer financial assistance, subsidies, reliefs and other types of assistance to reduce the impact on its people and to business. And learned that the hospitality industry must be united on soliciting reliefs from the authorities. Travel and tourism is a major industry providing more jobs than any other business.
We all learned the importance of Governments and for organizations to strongly promote and educate people on personal hygiene, including social distancing in this case. And on how to handle pandemics and emergencies, prevent panic and anxiety, and have a clear plan/document in place for all to refer to as an effective measure in avoiding infections.
We learned that false and misleading information about coronavirus pandemic seems to be contagious and we all have to realize that fake news spreads faster and more easily than this virus and is just as dangerous.
That pandemic creates regional/global financial recessions and in response to this, the key role of hospitality/business leaders is to protect their people/jobs, manage controllable expenses, preserve cash, be creative/innovative and prepared for the recovery.
Pandemics are not solved by politics nor by military strengths and even less by weak politicians/leaders. Unfortunately, also learned that many politicians/head of states/leaders are not up to the task as "unparalleled times require unprecedented actions" and many autocrats/leaders are simply lost and/or playing politics and on top of it, are clueless on getting a sustainable recovery back on track. Blaming others is counterproductive and not going to help us solve the problem sooner.
The world could do with more international empathy, solidarity, and cooperation on developing cures and vaccines to fight deadly viruses now and in the future. All countries should invest much more money in people's health and less on military/defense. Unfortunately, the whole world has to learn and accept that under the best of circumstances there's going to be a very difficult challenge for mankind and there should be "no illusion that we have won".
In some cases, and due to an unusually low volume of business, we learned the process of temporarily closing hotels/businesses and on how to handle staff's continuous basic income, communication with customers, suppliers, partners, and all others involved with the business. And of course, when times comes, a reopening process/plan.
And finally, a strong reminder that we must take much better care of our sick planet, that we should have more respect for nature and conduct/practice a sustainable lifestyle on all that we do. We all wait with bated breath for this crisis to end but it appears that a lot more work remains to be done.
Hotel’s Plan of Action
We are faced with a new virus that spreads very rapidly and without a proper cure and/or vaccine. As guests/customers have canceled most/all of their travels, hotels have been forced to adjust and adjust fast. Cash is vanishing much faster than is accumulating and under this situation, the management priorities are very clear; safety of staff and guests first and second, cash conservation.
In some markets, the volume/occupancy at the hotels has dropped to the single-digit, while few other destinations are reporting slightly better performance but none above 15%-25% occupancy and in many cases hotels had to closed-down. This has been going on since January 2020, and the economic impact is immense. Very bleak indeed, and can the world control this virus? Unfortunately, nobody can foresee how long this situation is going to last.
COVID-19 (a pandemic) is a major world-wide problem dominating the headlines and many businesses are starting to contemplate how this outbreak is shifting customer needs, employee expectations and impact on the way we live and behave.
As is the case with any crisis-emergency-epidemics it is imperative for hotel leaders to be able to react quickly and avoid panic and confusion. Accept that when faced with a crisis of this dimension, people need reassurance and proper guidance. A clear message must be given to all that management is responding fast and all efforts will be made to stabilize the situation.
Considerations, Precautionary Measures, and Actions by Hotel Operators
(Planning, risk management, health measures & infection prevention, cost controls, communication). “Remember that prevention is better than cure”
Of course, different location calls for different actions/response as there are hot spots/clusters of infections and Governments regulations and travel directories may be different from places to places.
The following are basic guidance and advice for the hotel operator/s and with the objective to bolster safety response/protocols and actions. "The DOS and DON'TS" during this nasty coronavirus outbreak that has a serious direct negative impact on the whole travel and tourism industry and all its people. Brands must be mindful of the decisions they make as the impact on customer loyalty and the employee experience may last long after this health pandemic blows over.
It is never too early to be prepared. Must always have a contingency plan in place for unusual situations and ensure that your hotel is not suffering more than necessary. Don't panic and don't make snap decisions in any situation that may arise, leaders must maintain control and provide guidance at all times. This is a time for heads of the organizations to be precautious, pro-active, focused on hygiene/safety/security and align the whole team to handle/manage the situation the best they can. Remember that even during this difficult time, it is important to maintain your "public image" keeping things as positive as possible for internal (employees) and external (guests/partners) morale and motivation. Leaders need to call on a wide range of leadership styles, strengths and behaviors to help their organization and teams to move forward. Must gain trust from all subordinates.
General Response Planning;
- Creation and implementation of a flexible/agile response plan for dealing with the emergency, focusing on employees, guests, and facilities. The hotel General Manager, assisted by key Executives and Department Heads (the committee) develops and drives this plan.
- A written plan that takes into account potential virus exposure to employees and guests and proactive steps aimed at reducing the probability of transmission. The plan also includes the ongoing business/promotion activities, cost containment measures, and potential interruption of basic supplies/utilities. A fluid plan that can be adapted as the circumstances evolve. The plan must be clear on what is mandatory and what is voluntary.
- Important that the plan takes into consideration existing contracts, collective bargain agreements if any, and is in compliance with local laws and regulations as necessary.
- Be ready and prevent any potential criticism/accusation from external and internal parties; guests, authorities/officials, insurance, shareholders, employees of non-compliance/not caring. This can be very damaging.
- Communication; it is of the utmost importance that all the employees are fully familiar with the plan and of what is expected from them. In house guests and visitors are also to be informed of actions and activities that the management has put in place and reassured of their safety and wellbeing.
- It is also necessary that owners/shareholders and other stakeholders are kept informed of the evolving situation in case there is a need for additional funds to operate the hotel.
- Is the outbreak classified as "force majeure?". This will have a direct impact on insurance, claims/refunds/cancellations, contracts/budget performance and in some cases on loans repayments.
- Regular communication with the local health officials for advice/updates on the situation.
- Keep a record of cancellations/lost business and keep up-dating your monthly forecast for the next 3 months as you must have a clear picture of the cash flow status.
- How realistic is you forecast? And how much cash you need to weather the storm?
- Negotiation with lending institutions to obtain some debt reliefs.
Wise to also consider;
- Plan B in case the situation becomes worse/uncontrollable.
- Business continuity and resiliency planning especially for finance and maintenance people.
- Empathy, transparency and focus on health-safety/security-hygiene is what customers expects. No compromises on those areas. Must create confidence and trust.
- Waving of cancellation fee and allow guests to cancel or change reservations with no penalties.
- Extend loyalty/recognition programs benefits/points. Time to show care and concern.
- Change of dates/rebooking of events when/if possible at no cost to the guest. Not appropriate to hold medium-large events in the hotel during the period of the outbreak but can promote virtual meetings/seminars.
- Assess if it is necessary/appropriate to renegotiate groups/packages/promotions contracts.
- Body temperature check of all arriving guests and of all movement in-and-out of the property, front, and back. Isolate all people with high temperature (37.5 and above) and notify concerned medical/authorities.
- Obtain past 14 days' travel history of all guests at checking-in, and on a confidential basis. Basic information on their present health condition (precautionary measure). The objective of this is to define how to handle arriving guests who have been in infected locations as defined by the WHO or by the local authorities as you have to avoid the spreading of the infection in your hotel. This is not an easy task but must give confidence to all your people, guests, and staff.
- Must avoid accepting infected/potentially infected guests at all costs as this will be the reason by the officials to close a hotel.
- Make available hand sanitizers including alcohol-based disinfectants, face masks, latex disposable gloves, and others as per guest request on arrival and during their stay. If appropriate/good practice, can also place those in the rooms.
- Assess guest preference on housekeeping service in their rooms, if daily or at their preference as they may want to avoid contact with cleaning staff.
- Single-use/disposable and sealed cups/containers and bottled water in guest rooms.
- Provide guests with all information on safety/best practices, what you are doing to keep things clean and safe for guests and staff and provide a 24hrs point-of-contact in case of need/emergency.
- Offer automatic check-outs without guests having to stop at the cashier/front desk.
- Control of elevators, who uses, no. of people in the cabin, air-flow and constant cleaning & disinfection.
- Less communal access, use only one entrance for guests and one entrance for staff.
- Reduce some of the unnecessary high-touch elements of luxury.
- Daily briefings/meetings for updates on the situation and of a plan of action. A continuous reminder of hygiene matters; hands washing, avoid touching the face, avoid shaking of hands, daily changing uniforms, shoes and others, maintain a safe distance and others. Sharing of the good practices as received from the company, from the authorities, from the industry and WHO. Without creating panic and confusion, conduct conversations and training on how to manage during crises.
- Develop a face mask policy as appropriate and ensure compliance (disposable masks). (Note that face masks for all employees is a must at all times.)
- Review the status and compliance with the hotel/company vaccination policy.
- Strict instruction not to report to work if not well (a sign of cold/flu symptoms, fever or other related). Also not to report to work if there are confirmed virus cases in employee's housing complex/community or they had to visit hospitals, attended funerals, assisted old people.
- Remind all employees to stay away from large events and activities; sports, conferences, seminars, campaigning, weddings/celebrations, etc. Employees to notify the respective supervisor, in advance, if have to attend those.
- All must understand (as above stated) that an infected staff, or guest, is a reason for the authorities to shut down an entire property/hotel that must be prevented.
- Body temperature screening at employees' entrance for all coming and outgoing employees and every 4 hours (or less if there are concerns) during the work shift for all employees including management staff.
- Elimination of all business travels for all. Employees to report of any personal travels, leisure/family etc.
- Clarity on the handling of employees or guests requiring to be quarantined, who is doing what. Coordination with local health officials is a must.
- Change uniforms and/or working cloths on daily basis
- Provision of sanitizers to all staff including alcohol-based (60%-75%) disinfectants and promote usage.
- Importance of staff morale-motivation-alignment and caring attitude as all are on the same boat facing a common problem/crisis.
- A constant reminder to all to avoid the so-called "socially irresponsible actions" and of course of any stigma/discrimination.
- Invite/solicit the whole team to build-up personal immunity and a healthy lifestyle. Provide lectures/advice on this if necessary.
- Regular briefings and up-dates via knowledge sessions, video conferencing, walls of learning/posters, emails, etc. and continuous guidance. Take this time to learn and grow.
- It is a proven fact that during the crisis and with a caring attitude from the top, the entire work-force will respond positively and will contribute with whatever they can to the needs of the hotel/organization.
- It is also important that the whole team participates in labor cost savings including the top management, with no exceptions.
- A clear message to be given that the labor cost has to be reduced but without retrenching anyone if at all possible. Savings can come from; Clearance of all accrued leave. Implement a no-pay period/s leave for all. Reduction of working day/pay. Splitting of functions/multi-tasks. Freeze of all hiring and of all replacements. Offer/solicit advance leave and others as appropriate. (there are times when management may need to consider extended pay leave for "needy" individuals, but those are exceptions and should be discussed with respective supervisor).
- Implement flexible working hours with the objective to avoid the busy rush-hours and crowd public transport, buses, subway, etc.
- Unfortunately if the situation persist for long time, that it becomes necessary to retrench people.
- Plan for social distancing in all areas (as per WHO), guests & employees areas.
- Closing of outlets and other facilities based on demand and on safety. If feasible, look at shortening outlets operating hours. Simplified menus and spacing seating.
- Closing of room floors if there are savings.
- Special attention to sport/recreation areas/facilities; adequate chlorine for the swimming pool, clean gym equipment after every single use, close the sauna/steam/Jacuzzi.
- Assess if SPA treatments are appropriate or not (recommendation is to temporary close).
- Continuous cleaning of children's recreational areas if any.
- Prepare a couple of rooms/areas exclusively for emergencies, perhaps one in the lobby area and one in the guest rooms areas close to exits.
- Use of technology to replace people-to-people point of contacts.
- Set strict protocols for handwashing, coughing, sneezing and reporting symptoms. Over-communicate this in particular the social distancing.
- Must to have a face mask policy and compliance as/if appropriate.
- The virus can live on surfaces and objects for a few days in particular where the infected people droplets land. Everything that is associated with infected people is contaminated and potentially infectious and this is the reason for continuous cleaning and disinfecting anything that guests and staff would touch frequently; Lift buttons, light switches, door handles, toilets, telephones, TV controller, in-room safe, coat hangers, all surfaces, tabletops, chairs, crockery, cutlery, tableware, floors, rugs, containers, trolley, vehicles, etc.
- Detailed processes for handling line and guest’s laundry.
- Usage of proper disinfectant products (hospital-grade) and disposable cleaning tools throughout.
- Cannot accept that the same cloth/cleaning utensils are used to clean surfaces-equipment-facilities, very dangerous (rooms, public areas, F&B).
- Frequent washing of bedrooms comforters/duvets, pillows, mattress tops, bed runners, curtains. And frequent shampoo of carpets.
- Review the whole process of handling food from ordering, inventory, receiving, storage, requisition, preparation, and serving. Apply strict safety in all aspects. All food handlers to wear gloves and change those often. Not the time to serve/promote raw/uncooked food nor buffets.
- Ensure that all visitors/vendors/suppliers/deliveries practice all safety standards. Assess if appropriate for those people to enter the service areas or not.
- Disinfectant rugs at front and at back entrance.
- Review the process of garbage disposals and of any changes/improvements to be made.
- Review the efficiency and cleanliness of the hotel central and individual air filtration & purification system. Is there a need for UV air sanitation in specific areas?.
- Good practices posters/reminders on hygiene and safety throughout the property.
- An appropriate time to conduct a fire drill with an evacuation exercise and assess readiness.
- Customers will still want to be put at easy and want to know that the hotel is taking proper safety measures.
- Keep monitoring of any new safety measures that can be implemented.
Disposable face masks (basic information);
- Wearing of face masks is a useful preventive measure and cultural habits in some countries/locations in particular if one has a cold/flu. But, it must accept that the mask does not provide an adequate level of protection when faced with an infected person as based on experts, the virus is spread from normal respiratory droplets and in particular by coughing and sneezing.
- Evidence continues to mount that wearing a face masks is the most effective way to limit transmission, especially when combined with other personal hygiene initiatives and adequate distance.
- Wearing a mask is part of earning customer’s confidence.
- Important to recognize that there are infected people who are not showing any signs of sickness but they infect others, this is probably the biggest reason/source of so many infections.
- Ideally should maintain a distance of 1.5 to 2.0 meters from any encounters that in most cases is not feasible in the hotel and in particular when taking public transports.
- Note that wearing disposable surgical masks prevent you from touching your nose and/or your mouth as normally the infection takes place through nose-mouth-eyes.
- We need to remember that disposable masks attract dust/dirt and must not be reused. Special attention when taking off the mask and how it is disposed of.
Business Promotion and Activities & Recovery Plan
- Ensure that your hotel doesn't suffer more than necessary during the current situation and be ready. Be up-to-speed with the various travel advisories/restrictions and other relevant updates.
- Maintain the brand image & pricing during the crisis. Don't drop your published/retail rates as reducing rates, in general, does not stimulate demand and protect your online image. Offer discounts from those rates and/or added value. You can get creative with packages like "two for one " or "three for two" including F&B services and others but those must be for a specific period of time.
- Keep service levels and a sense of security/safety during those periods. Spend more time with guests as this is time to make friends (of course practice hygiene basics like no shaking of hands, maintain the so-called social distance, etc. with all encounters and with the guests).
- Continue looking for new markets during and after the crisis. Does the local market/community offer any opportunities?
- Promote web conferencing. A good time to position your hotel in this potential line of business as virtual event platforms/online events is growing very fast.
- Don't cut your marketing budget, you may need to increase it at the end of the crisis as you may have to "buy the business".
- Develop a strategy for the image for tactical advertising activities and based on the local situation, assess if to continue advertising (tactical) or not and how; if digital or other efficient ways.
- Thinking post crises and identifying new opportunities and articulating the vision for recovery.
- Prepare an attractive welcome-back campaign/package ready to go and implement as soon as the situation improves (avoid wasting time at that time).
- Assess the opportunity to promote the destination with other travel and tourism-related industries; airlines, agents, tourism offices, etc.
- Monitor your competitive set of what they are doing better than you.
- Any Government assistance/reliefs? taxes, fees, utilities, etc. who is handling?
- Look at the possibilities of renegotiating with vendors/suppliers with the objective of cost reductions without impact on the quality.
- Any opportunities to reduce repairs, maintenance and utility costs?.
- Time to review existing outsourcing agreements and assess if those services can be temporarily done by the hotel/staff.
- Based on the status of the cash flow, this is an appropriate time to do renovation/product up-grades and speed-up the planned schedule.
Clarity on Insurance Coverage and Responsibility
- This is also an appropriate time to review all insurance coverages what's it includes and what's not. General liability, business interruption, natural disasters, force majeure, directors and officers liability, claims and others.
- In the unfortunate case that an employee contracted the virus while working (on-site or on a business trip). Whether he/she spread it to family members, to other employees and/or to guests, the hotel must be clear on what is the coverage/who pays for what including the best/most suitable cure/hospital, time off, medical expenses, permanent disability if any, death benefits and others. Hotels must be covered and prepared for any possible scenarios.
Stay away from the "infodemic" (fake news) as those are creating unnecessary/additional problems and panic but do consult with your local health authorities and follow the WHO guidance.
Continuous message to all; we’ll get through this, we just need to continue to support one another.
At Corporate Level
Demonstrate/show of stability, professionalism, care, guidance, clear communication and avoiding panic/anxiety and confusion are simply basics for any corporate activities during difficult times. Develop trust and show determination on "we-can and we-will" come out of this unusual situation stronger than before. And remember that you as a leader, can’t help your team or anyone else if you’re not in control.
Develop & implement contingency plans including aggressive actions to manage costs, cash flow/credit facilities, and balance sheets. Also, asses if it is necessary to enter into negotiations with lending institutions on debt/s relief. Clarity on the various insurance coverage at both corporate and at hotels. Suspending payment of dividends and others. "Unusual times call for unusual actions".
Apply/implement similar labor costs reductions for the whole office (leaders first), on the reduction of operating expenses and of all hygiene, safety & security measures as described for the hotels. Make it clear with all on what is mandatory and what is voluntary.
Appropriate to put in place the business continuity and resiliency planning in particular for key functions. Also appropriate to develop plan B for the worst-case scenario.
Regular (by-weekly?) communication with members of the loyalty program and with important customers on the brand response to the crisis including the waving of cancellation fees, extension of recognition points, security and safety measures put in place at the hotels, and others as appropriate. The objective is to give recognition and keeping guests informed.
Communication/work closely with hotel owners and partners on what the group is doing and consider a reduction of some of the corporate fees/reimbursements for a period of time and on what can be done at their respective properties to reduce the cash outlay.
Assist, guide and motivate hotel GM's and Executives. Sharing of best practices on getting through the pandemic as a strong and unified team. Preservation of jobs and of cash flow being a priority.
Develop a group-wide guideline and policy on handling/taking care of employees who have contacted the virus. Salary-costs-care and do not violate their rights.
Close monitor of group-wide business trends/demands including bookings, cancellations, major happenings/events and of any opportunity. Review/update assumptions for forecasting at both corporate and at hotels with the objective of accuracy as it is important for cash flow purposes.
Regular briefings, updates and guidance to the whole team and this can be done via knowledge sessions, video conferencing, walls of learnings/posters, emails, and others as appropriate.
Every crisis creates opportunities; what are the new business opportunities after this period/crisis?
(Deal with the present and prepare for the future)
- Understanding what is happening in travel and tourism now, why and what is the path ahead.
- Prepare for the recovery from a financial, operational and marketing standpoint at corporate and at the hotels. Articulate the vision for recovery and finalize a detailed and attractive promotional plan/s to launch as soon as the situation stabilized with a clear objective to regain business ASAP. Coordinate with Country/local tourism offices for any available/relief funds to help to finance the promotion.
- Do not stop the development/expansion activities and work closely with existing and new potential developers. This is time to show care and professionalism.
"This too shall pass"
"Infodemic", fake news at its worst....
The internet has been flooded with false information and misinformation about the epidemic creating confusion, panic, and disgust. All have to realize that anxiety, panic, and stress are more infectious and more dangerous than the disease itself.
Avoid Stigma and Discrimination;
Must separate the virus from anyone people or culture. At times, panic and ignorance spread faster than the actual coronavirus. Beyond the economic headwinds, Chinese around the world are targets of mounting xenophobia and discrimination. Bullying, shunning and racist behaviors cases have been reported in many parts of the world, speared by unfunded fears that people with Chinese futures are more likely to carry the virus. This is simply ridiculous and embarrassing for the western world/other cultures and clear proof of ignorance and racial insensitivity. Must focus on facts, not on misinformation and disinformation.
For training purpose
As of 30 January 2020, the World Health Organization (WHO) has declared the coronavirus (2019- nCoV), first reported in Wuhan, as a global health emergency. As governments and businesses take steps to mitigate risk and infection, hoteliers around the world are no doubt also seeking to do the same in their properties.
What is a pandemic?
A pandemic is an epidemic (infectious disease outbreak) that spreads on a global scale. Pandemics usually occur when a new infectious disease emerges that can spread rapidly around the world.
The World Health Organization (WHO) declared the outbreak of COVID-19 a pandemic on 11 March 2020. This COVID-19 pandemic is the first caused by a coronavirus. (WHO)
What are coronaviruses?
Coronaviruses are a large family of viruses. Some coronaviruses cause illness in humans and others cause illness in animals, such as bats, camels, and civets. Human coronaviruses generally cause mild illness, such as the common cold.
Rarely, animal coronaviruses can evolve to infect and spread among humans, causing severe diseases such as Severe Acute Respiratory' Syndrome (SARS), which emerged in 2002, and Middle East Respiratory' Syndrome (MERS), which emerged in 2012.
What are the symptoms of novel coronavirus (COVID-19)?
The range of reported symptoms for novel coronavirus continues to evolve but practitioners have agreed that common symptoms include:
- Respiratory symptoms
- Shortness of breath
- Breathing difficulties
- Body/bone pains
In more severe cases, the infection can cause pneumonia, severe acute respiratory syndrome, kidney failure and even death. However, a number of patients who have been reported as infected by COVID-19 have been treated at hospitals and released within a few days
Protecting yourself against infection
The best way to protect yourself is the same as you would against any respiratory infection. Practice good hygiene by:
- Making sure to clean your hands thoroughly for at least 20 seconds with soap and water, or an alcohol-based hand rub.
- Cover your nose and mouth when coughing and sneezing with a tissue or a flexed elbow, dispose of tissues immediately and safely.
- Avoid close contact with anyone with cold or flu-like symptoms.
- With face mask at all times when in public/contact with people.
If you have returned from a country or region that is at high or moderate risk for COVI D-19 you should monitor your health closely. If you develop symptoms including a fever and cough you should isolate yourself immediately and urgently seek medical attention.
If you believe you may have been in close contact with a confirmed case of coronavirus, you should also monitor your health and seek urgent medical attention.
Social distancing is an effective measure in avoiding infection, but it is recognized that it cannot be practiced in all situations and the aim is to generally reduce the potential for transmission.
While practicing social distancing, you can travel to work (including public transport). For non-essential activities outside the workplace or attendance at schools, universities and childcare - social distancing includes:
- Avoiding crowds and mass gatherings where it is difficult to keep the appropriate distance away from others.
- Avoiding small gatherings in enclosed spaces, for example, family celebrations.
- Attempting to keep a distance of 1.6 meters between themselves and other people where possible, for example when they are out and about in public place.
- Avoiding shaking hands, hugging, or kissing other people.
- Avoiding visiting vulnerable people, such as those in aged care facilities or hospitals, infants, or people with compromised immune systems due to illness or medical treatment.
What to do if you believe you have symptoms
If you display symptoms such as:
- Fever, cough
- Runny nose
- Shortness of breath
You should self-isolate yourself until you can arrange to be tested by a medical professional.
If you are sharing your home with others, you should stay in a different room from other people or be separated as much as possible. Wear a surgical mask when you are in the same room as another person, and when seeking medical care. Use a separate bathroom, if available.
Make sure that you do not share a room with people who are at risk of severe diseases, such as elderly people and those who have heart, lung or kidney conditions, and diabetes.
Visitors who do not have an essential need to be in the home should not visit while you are isolating.
If you are in isolation you should alert your employer immediately through your normal processes. Depending on your type of work, and provided you are well, you may want to discuss alternative arrangements such as working from home.
Facilitating guest’s isolation
If a guest advises you, or your hotel team that they are displaying symptoms they should be isolated.
If a guest advises you as a team member, you should inform hotel management immediately.
The hotel will identify an area in the hotel where your guests may stay. Guests are not to engage with other guests or receive visitors. Hotel staff will be able to deliver food and other supplies that the guest may require, please refer to specific hotel procedures.
Best practice includes:
- Supplying isolated guests with a surgical mask to wear if room service and housekeeping services are provided.
- While guests are alone in their rooms, there is no need for them to wear a mask.
- If a guest needs to leave the hotel, such as to seek medical care, they must wear a mask.
- Isolated guests are not to use hotel facilities, such as restaurants, cafes, pools, gymnasiums and business centers and others.
Providing Services to isolated guests;
In general, contact with isolated guests should be limited to only essential services such as cleaning by approved personnel who are well protected. And by room service but food and beverage items left outside the door in protected containers.
Limit contact between staff and other guests with the isolated guests. Isolated guests should not leave their room for any reason until cleared by a health professional/official.
The following is forwarded from an infectious disease specialist at Johns Hopkins
(for training purpose)
- The virus is not a living organism, but a protein molecule (DNA) covered by a protective layer of lipid (fat), which, when absorbed by the cells of the ocular, nasal or buccal mucosa, changes their genetic code. (mutation) and convert them into aggressor and multiplier cells.
- Since the virus is not a living organism but a protein molecule, it is not killed, but decays on its own. The disintegration time depends on the temperature, humidity and type of material where it lies.
- The virus is very fragile; the only thing that protects it is a thin outer layer of fat. That is why any soap or detergent is the best remedy, because the foam CUTS the FAT (that is why you have to rub so much: for 20 seconds or more, to make a lot of foam). By dissolving the fat layer, the protein molecule disperses and breaks down on its own.
- HEAT melts fat; this is why it is so good to use water above 25 degrees Celsius for washing hands, clothes and everything. In addition, hot water makes more foam and that makes it even more useful.
- Alcohol or any mixture with alcohol over 65% DISSOLVES ANY FAT, especially the external lipid layer of the virus.
- Any mix with 1 part bleach and 5 parts water directly dissolves the protein, breaks it down from the inside.
- Oxygenated water helps long after soap, alcohol and chlorine, because peroxide dissolves the virus protein, but you have to use it pure and it hurts your skin.
- NO BACTERICIDE SERVES. The virus is not a living organism like bacteria; they cannot kill what is not alive with antibiotics, but quickly disintegrate its structure with everything said.
- NEVER shake used or unused clothing, sheets or cloth. While it is glued to a porous surface, it is very inert and disintegrates only between 3 hours (fabric and porous), 4 hours (copper, because it is naturally antiseptic; and wood, because it removes all the moisture and does not let it peel off and disintegrates). 24 hours (cardboard), 42 hours (metal) and 72 hours (plastic). But if you shake it or use a feather duster, the virus molecules float in the air for up to 3 hours, and can lodge in your nose.
- The virus molecules remain very stable in external cold, or artificial as air conditioners in houses and cars. They also need moisture to stay stable, and especially darkness. Therefore, dehumidified, dry, warm and bright environments will degrade it faster.
- UV LIGHT on any object that may contain it breaks down the virus protein. For example, to disinfect and reuse a mask is perfect. Be careful, it also breaks down collagen (which is protein) in the skin, eventually causing wrinkles and skin cancer.
- The virus CANNOT go through healthy skin.
- Vinegar is NOT useful because it does not break down the protective layer of fat.
- NO SPIRITS, NOR VODKA, serve. The strongest vodka is 40% alcohol, and you need 65%.
- The more confined the space, the more concentration of the virus there can be. The more open or naturally ventilated, the less.
- This is super sad, but you have to wash your hands before and after touching mucosa, food, locks, knobs, switches, remote control, cell phone, watches, computers, desks, TV, etc. And when using the bathroom.
- You have to MOISTURIZE. HANDS DRY from so much washing, and the molecules can hide in the micro cracks. The thicker the moisturizer, the better.
- Also keep your NAILS SHORT so that the virus does not hide there.
Embracing the New Normal
Bigger Brands and Commoditization?
This global pandemic has created serious financial difficulties for most travel and tourism-related companies/groups. Consequently, the industry will be faced with an increasing number of mergers, acquisitions, buyouts and, unfortunately, some instances of bankruptcy. Like it or not, "Large Global Brands" will become even more dominant, resulting in less identity/personality, and the danger that hotel business will become even more commoditized.
History tells us that, after every single crisis - whether financial or health-related - the industry has always experienced a drop in ROI. Hospitality professionals who have been in this business for a long time will clearly remember that, prior to the Asian financial/currency crisis of 1997, hotel developers within Asia expected a return on investment in hotel assets within seven years after opening. At that time, there was a much healthier balance of supply and demand in most of Asia's hotel markets and destinations.
Unfortunately, however, major crises such as the SARS epidemic (2003), the global financial crisis (2007/2008), the H1N1 pandemic (2009), and the MERS epidemic (2012), brought a succession of negative market situations. From changing spending patterns, shifting trends and expectations, to changing source markets, stricter lending policies, and increasing operational costs - hotels had it tough.
This, and more, will be repeated following the COVID-19 pandemic, and all people/investors/newcomers in this industry must realize this and plan for it.
Also remember that OTAs, with their high booking fees at the expense of hotels, consolidated their position in travel and tourism immediately after the 9-11-2001 terrorist attack/crisis in New York. At that time, the majority of hotels in North America were desperate for business and, in exchange for volume, committed themselves to the high commission of the OTAs. This would then go on to become the industry norm.
As we move forward, asset-heavy operators will suffer from considerably lower ROI. The asset-light model and "economy of scale" will become even more relevant for operators in order to progress. The owner-operator formula has worked well in the past, but, faced with the lower ROI's, operators need to increase their revenue with fewer investment assets. Ideally, revenue from asset-light operations should be higher than revenue from their own assets.
To compete in demanding markets and remain relevant, hotel brands and products, regardless of size and location, must clearly understand their competitive advantage. A well-administered/recognized loyalty program, efficient data-channels-forecast management, a sales-oriented attitude, and a consistent product delivering brand promises are all essential.
Consumer expectations, and rethinking operational protocols
It's become very clear that, after this crisis, customers will change their priorities about what they value most and what is important to them. They will be far more concerned about health-safety-security (well-being) than brand-location-price. The industry may need to rethink, revise, and perhaps redesign the way hoteliers operate, and at what they are good at. It's time to streamline operations for enhanced effectiveness/efficiency in response to trends, innovations, and travelers' expectations. Also, it's time to put your house in order, not just tweak it.
Pandemic likely to cause "radical shifts" in how the business operates, and how consumers behave. Going forward, the travel industry needs to re-think, re-envision and re-design what the future will look like.
Consumers' desire to travel, explore, and connect will remain after this shock, but travelers' mindset may shift, and they will distance themselves from the bad habits of the past. Showing care and compassion is a cornerstone of our business, and now is the time to show it as consumers will be less tolerant of bad/thoughtless behavior, and far more selective with their patronage. Of course, the desire for new experiences and value for money will remain important deciding factors when selecting a property or a destination.
Operators must understand how the expectations and behavior of consumers are changing and alter the way they express their company's values and priorities, and the way they respond to those changes. The industry needs more team spirit and camaraderie towards this common goal, with full recognition that people are the strength behind any successful hotel brand. This will not change.
In all probability, recovery from the pandemic will be gradual as consumers will only travel when they are confident that the crisis is under control. In the short term, less long-haul travel is anticipated, and more business will come from regional and domestic markets. China remains by far the country with the strongest potential within Asia.
It is anticipated that over-tourism in popular destinations may not return for some time to come. In the short-medium term, expect to see less focus on mega destinations and more focus on eco-friendly and cultural attractions that highlight environmental, social and community care. We must accept that during the recovery - which may take longer than seen in other recent crises - the market will expect to see many discounts and deals. This is only natural. Respond positively to this but do not drop your base room rates. It is important to track and respond to the sentiments of the various market segments and develop attractive products/packages based on added benefits.
Focus on the right offers and the right messaging throughout all phases of recovery.
Hygiene, security, safety, and training
No short cuts-no compromises in those critical areas. They must be a competitive advantage of the brand.
Cleaning and sanitation have become a customer expectation, and they must be part of a hotel's marketing message.
The oversupply situation in most of the Asian cities/destinations has made the past decade particularly difficult. The strong demand of shareholders and corporate officers to continuously increase the cash flow/profitability of the hotels in this highly competitive environment has taken the focus away from physical product upgrades/improvements - including attention to hygiene, security, safety, training, and in most cases, they have been kept at the very minimum required. This is a terrible habit that must be corrected.
It is worth considering installing the thermal imaging cameras at the hotel's and employee's entrances permanently? There has been a positive reaction to this by the authorities and by a few customers. And till a vaccine is found, we have to get used to body temperature taking at the entrance of every outlet and enforcing some social distancing measures.
Hotels in general, need to do a better job in a few important areas;
- Ventilation systems for rooms and public areas have to be modernized, and provision for air purification, sterilization, and deodorization systems has to be available for guest rooms, public areas, and employee areas. Quality of air and water simply basics.
- Programs to be in place for regular guest room sanitation, sterilization, and decontamination done by certified experts.
- Provision for in-room fresh air (windows) should be made available wherever possible. A very high percentage of hotel guests prefer fresh air.
- In-room soundproofing has become so important for travelers who are tired of all forms of pollution, including noise, light, and smoke, and who are looking for a clean place to get away and rest.
- The overall hygiene of in-room bedding could be improved. Ideally, consideration should be given to infectious-control bedding products similar to the hermetically sealed bedding for mattresses, pillows, duvets, cushions to keep viruses and allergies out. Of course, brand standard lines will have to be used as well.
- Sanitation and disinfection of all areas used by guests and employees must be done much more frequently, by the hotel or by a qualified contractor using high-quality products.
- Additional focus on employee vaccinations. Personal hygiene standards must be among the best in class.
- This crisis is forcing all involved in hospitality to be more creative.
In Food and Beverage, important areas to look include;
- Note: food sanitation and safety regulations are paramount to ensure the health of consumers.
- Adjust menus based on demand. Avoid exotic/wild animal meat and limit options to globally accepted livestock. And more organic and healthy items.
- Guests will want to see gloves, masks, and surfaces being wiped down often, practically after every usage.
- Hand washing of glasses and equipment in the bar or other parts of the hotel (like in rooms by the maids) is a thing of the past. Machine washing is a must.
- After this crisis, there may be higher demand for room service and/or take-out items, as some guests prefer privacy.
- Food displays and buffets are to be protected by food shields (sneeze guards), and proper equipment should be installed to keep the food temperature safe (hot or cold).
- Health-wellbeing-wellness has become a top priority for travelers, and this also includes a healthy diet while on the road or vacationing.
The industry will experience rapid changes in all areas, including MICE business, which is an important market segment for most operators. There may be less demand for face-to-face meetings in the future and more demand for high-quality integrated-hybrid-virtual-live streamed meetings and events. Hotels will have to prepare for this, including a remote simultaneous interpretation.
- Now is an appropriate time to review all insurance coverage and assess if there are any opportunities.
- Sustainability is an area where the travel and tourism industry, including hotels, have to do a better job. Our sick planet demands that we should have more respect for nature and conduct/practice more sustainability in all aspects of work and life.
- Learn as much as possible from this outbreak, have a contingency-emergency plan in place, and remember that every crisis presents business opportunities. For example, will hotels have an advantage over Airbnb and OTAs after this crisis? This is something we must all look at.
As the situation surrounding COVID-19 continues to evolve, it is important to keep abreast of industry trend-innovations-forecasts and booking behaviors that will ultimately help to shape strategies and actions.
The pandemic will subside over time, and people will plan to travel again. That would be the time that you "need to hit the ground running" with the objective to maximize revenue before and after travel demand picks-up. For the time being, it is a must to keep loyal guests, and new potential customers, engaged at all times, be supportive/empathetic, and follow-through on a solid strategic plan. The plan must be a team effort and all to take responsibility and accountability.
Global coordination for a vaccine?
The continuing spread of the virus around the world and the associated damage to global economic activity (worse global decline since the great depression of the 1930s?), the world has to come together trying to come up with proper cure and vaccines. Despite many geopolitical differences and rivalries, global coordination is needed to tackle the COVID-19 crisis because "even with the best will in the world" the efforts of individual countries will not be enough. A crisis of this dimension requires globally coordinated action both in health and in economic activities as the pandemic knows no international borders. It is a global effort for mankind.
Travel is one of the world's most resilient industries but, without a vaccine, this virus will not go away on its own and the world cannot resume regular economic activities. And, we all continue to suffer.
Effective Communication in Times of Crisis
HEAL and THRIVE in a post-outbreak world
(COVID-19 Comments, and Suggestions)
Getting to grips with a destructive crisis:
Reflections, observations, and views
Reflecting on the overall health of the hotel industry during the COVID-19 outbreak, I find there are many unanswered but crucial questions surrounding how hotel business will be reshaped during these trying times and also in the recovery ahead. Similar questions are also being asked by heads of hospitality organisations worldwide.
Here are just some of the questions which immediately come to mind:
- With the market already confused by a proliferation of similar-looking brands, who will survive and who will not?
- With safety a major factor affecting consumer behaviour, will customers now prefer to stay in smaller hotels rather than larger, branded properties?
- What do small operators have to do to compete and survive?
- Who will be the best innovator/s in introducing clear competitive advantage products that stand out in the industry?
- What does a flat/lean/efficient corporate, or an individual hotel, structure look like?
- What is the best way to handle disruptors such as online travel agents and the sharing economy?
- How can new hotel projects be financed and positioned for sustainable value creation? What would be a lender's expectations for ROI and loan repayments?
- What do hotels of the future look like? Where are the new sources of business coming from?
Fulfilling obligations, firming-up balance sheets, and securing adequate cash-flow for the duration of the crisis has become a considerable and vital challenge for any business leader.
Wise leaders and established companies have to be prepared for the worst and know that additional capital/loans may be required if the present unstable situation persists longer than anticipated.
Observations and Views
Adjust to the moment and readjust over time
The travel and tourism industry is vital in any functioning economy, generating a considerable amount of GDP. The industry's global contribution, however, has been decimated by the COVID-19 pandemic, which has hit travel and tourism harder than any other economic sector.
This unprecedented fall-off in demand has left the industry facing its toughest challenge ever, leading many companies to financial distress, cash crunches, and fighting for survival.
Preliminary indications are that hotel business has reached rock bottom in most parts of the world, and from now on, the only way is up.
Some regions and countries are showing signs of improvement, but, in general, there is a long and painful way to go to return to acceptable performance and profitability. An immediate turnaround is impossible.
In this period of 'doom and gloom,' hotel companies should use this time to reflect on, and try to understand and correct, the slip-ups of the past and ultimately plan for a brighter future. Look at this crisis as an opportunity to implement new principles and business models and strategies.
Think not where the organisation was going, but where it wants to be. This will require a total rethink and reboot from previous frameworks, structures, and dependencies.
Ironically, this destructive crisis has created a 'convenient excuse’ for any poor results generated (and that includes problematic areas and mistakes made prior to the outbreak). The hotel industry has to recognise and accept, however, that some important corrections were indeed necessary well before the crisis as performance/yields were gradually moving downward.
While the crisis has brought the travel industry to a screeching halt, remember that the world is not coming to an end. Undoubtedly, the industry will emerge from this dark period, travel will gradually return, and business will eventually start to grow and return to a position of strength.
However, the industry has to adjust to a changed market driven by different consumer needs, and readjust over time. The past is gone forever and it will not return. Preparing a well-articulated and practical recovery and action plan is a priority for everyone in this business. Plans should take into consideration shifting travel trends/expectations, the best ways to leverage brand strengths and competitive advantage, and also the continuous evolution of customer preferences.
Rebooting for a leaner, agile, and wiser future
Following the pandemic, behaviour at work must change.
The business landscape will face multiple transitional changes (in some cases transformational changes) and hotel groups have to embrace new values based on the principles of Efficient Processes, Agility, Innovation, Entrepreneurial Drive, and Financial Viability. These will be the characteristics of any organisation seeking to redesign itself for sustainable growth. The extent to which organisations learn from the pandemic and set their learning strategies will be critical to future success.
Employees' values and expectations are also evolving rapidly and, now more than ever, people are looking for engagement, innovation, continuous learning, and open communication. The bureaucracy and micro-control of the past is out in favour of adaptability, a greater focus on people, and the opportunity to work together towards common objectives and goals. Mature and trusted leadership is essential in this crucial area.
Agile business practices are also essential. Hierarchical structures based on control mechanics are definitely over and hotel companies which do not recognise this will remain stuck or become obsolete. Leaders must promote agility and flexibility in all aspects of the business – from mindset and learning, to operation, innovation/technology, and, most importantly, in their ability to compete and perform in the marketplace. Of course, in this business, RGI and Profitability remain the key performance measurements, and this will not change.
The time it takes for the divided world economy to get back on its feet, coupled with the duration of official travel restrictions, will profoundly shape the future of the travel and tourism industry. We also have to accept that, in the medium term, most households around the world are expected to have less disposable income, and consumer confidence will be much lower than in the past.
No expert can predict the future, but there's no doubt that 2021 and 2022 will be very challenging years, and hotel business will be faced with new normal practices that, in addition to much more stringent and transparent hygiene and safety practices, must also incorporate:
- A leaner/flat/efficient management structure.
- The ability to operate profitably with lower occupancy levels.
- Multi-skilling and cross/functionality ensuring higher productivity and efficiency.
- Methods/products to inspire a new generation of discerning and demanding travellers.
- Increase in online business opportunities.
- A strong empowerment culture enabling effective decision making at all contact points.
- Technological transformation based on innovative, practical, and user/friendly solutions.
- New products and services, including wellness/well-being, healthy eating, and new-interesting F&B concepts, virtual/live events/conferences, sustainability, and others.
- Getting the basics right, and embedding long-term resilience.
Facing the new reality and implementing progressive/radical measures will be vital to surviving the crisis. Be future-ready in delivering your brand promises, and be absolutely clear about why travellers choose your destination and particular hotel. To stimulate demand, you must promote both, and offer a more authentic and purposeful product and/or service.
Hotels have to be sensitive and respond to the fact that, for the next couple of years, the volume of business is expected to be lower than normal and customers have a much wider choice of places to stay.
Now is the time for the whole management team to be fully aligned and made accountable for their actions/performance. All must contribute to assessing what's changed temporarily, permanently and fundamentally, and respond effectively. As an example – how much longer will it take to clean and sanitise rooms and public areas? And what is the cost of the new tasks and processes? (It will be interesting to see which of the current changes are temporary and which are permanent).
Take this opportunity to challenge existing norms, and align expectations and intended results. Reassess, re-evaluate, and strategize all aspects of the business, from changing consumer trends/sources of revenue to expenses and profitability. And remember that the future is all about building trust, as customers will only do business with organisations that they trust. Clear/frequent communication and transparency are essential to creating trust.
Caring and visible leadership is needed now more than ever.
Keeping each other safe and connected during this difficult period is everyone's responsibility. Mental health and psychological support services should be provided by all companies to help colleagues who are struggling with feelings of fear, anxiety, stress, depression, anger, or other negative emotions in these difficult times.
Companies must be very sensitive to this and provide all necessary assistance and guidance. It's important that leaders are visible and personally involved in people's well-being during these trying times.
We are all human, and we all have personal, family, and job-related situations to deal with. Always treat others with sincere empathy, and never forget that health – including physical and mental well-being – should and must always come first.
From Pandemic to Endemic
Common sense for the new reality
What we all want most now is to go back to some semblance of normality, but unfortunately, this is unlikely to happen in the short term. Many scientists and medical practitioners have stated that the virus will not go away anytime soon, and may become endemic in our communities. Even with a vaccine, or with effective medical treatment, humanity may still be living with this problem for years to come – most likely on a seasonal cycle requiring annual vaccinations. And we must be ready to accept this reality.
Now, and in the future, we all have to play our part. We cannot become complacent. Collectively lowering our guards will only lead to new waves of infections which will make the bad situation worse – and put an even greater strain on our already stretched public health systems.
Common sense tells us that once a vaccine has been found, approved, produced, and distributed, it would take several years for the whole world to be vaccinated. During this time, the virus will only continue to spread.
What does all of this mean for the travel and tourism industry? And what about hotels? How can they survive in a business world turned completely upside down? In short – a long road to recovery lies ahead.
For hotels – an added emphasis on hygiene, cleaning protocols, mitigating costs, and driving enough revenue to reduce operating costs will all continue through 2020. In this challenging climate, most properties will report operating losses for the financial year. While we may see some improvement next year, substantial recovery is not likely to be seen until at least the second half of 2022 or the start of 2023.
Strong and focused leadership is essential to navigating the tough years ahead. On a less negative note, we have to trust that the world is not coming to an end and take some comfort in the fact that ours is a resilient industry. Eventually, we will emerge from this dark period, travel will gradually return, and business will start to grow again.
The pandemic’s impact on the global economy has been broad and deep, resulting in extremely high levels of unemployment and fostering disillusionment among the workforce. Making matters worse: the outlook is increasingly grim.
Unfortunately, income inequality is widening worldwide, and the pandemic is exacerbating the divide between the haves and the have-nots. In most industries, many low paying jobs have been eliminated, leaving millions of people unemployed. In contrast, those in higher-paid positions have been less affected given, among other things, their ability to work from home with the help of advanced technology.
Cash really is king now, and with many banks and financial institutions providing financing to those who possess assets – enabling them to survive the crisis and acquire distressed assets at bargain prices – we have a scenario where the rich are only getting richer, and the poor are only getting poorer.
Unprecedented times call for unprecedented action
It’s difficult to comprehend the multi-faceted dimensions of the COVID-19 global pandemic and the unprecedented financial damage it has caused to the travel and tourism industry. This pandemic has inexorably shifted the trajectory of most organizations, leading to drastic loss of business, shortage of cash flow/working capital, loss of jobs, deep cost cuttings, the closure of some business/units, forced disposal of assets, and so on.
It’s a testing time for hospitality leaders who are faced with many tough decisions to keep their business activities going during the crisis, and also in preparing for the future. Securing adequate liquidity for the duration of the pandemic is perhaps the biggest challenge faced by all heads of organizations – especially as the road to recovery will be long and bumpy.
What reality will we face after the dust has settled, and what are our priorities/actions now? What must be done to be competitive and survive? Can the present ownership structure finance the business, or is there a need to merge or get new investors and capital?
These are all scary questions, but, unfortunately, this is the reality.
History tells us that crises and disasters have continually set the stage for powerful change, often for the better, and the present pandemic is forcing significant changes in all industries – travel and tourism in particular.
To thrive and survive in this competitive environment, hotel companies must try to define what will be the new normal for their business. A detailed action plan should be drawn up with the goals to improve brand image/position, enhance overall product offering, and, most importantly, gain and retain the trust and confidence of employees, guests and customers.
Accept that trying to predict and prepare for an unpredictable future that lacks precedent is a considerable task. But now is the time for leaders and executives to reorganize their teams, put in place a lean/flat, agile, and efficient structure, and foster a more productive culture by limiting bureaucracy.
Adjust business models and core strategies, redefine strengths and weaknesses, maximize competitive advantage through clearly communicated innovations and digital improvements, and you will be best placed to thrive in the pursuit of sustainable growth.
Where an organization was going before the pandemic no longer matters. Instead, everyone must be clear where their organization needs to be, and where it can and wants to be.
Adjust and readjust over time until there is clarity on what must be achieved. Teamwork, efficiency, alignment and commitment at all levels, and additional training on prevention and safety protocols are simply indispensable.
Tourism as we knew it might not return for a long time. As hospitality professionals, we have to look at how we can bring back the fun-loving industry we all helped to create in the first place.
Two Well-being & Revenue Opportunities brought
to the forefront by the Pandemic
quality of indoor air and mental well-being
There’s no doubt that crises come ripe with problems and far-reaching negative impacts. But they can also be the catalysts for positive change – creating new opportunities to improve the guest experience and, ultimately, enhance the bottom line.
Despite all the stresses and strains placed on global hotel business by the ongoing COVID-19 pandemic, hotel companies now have a clear opportunity to make well-being a key component of the guest experience.
As the pandemic has made people realize that health is the most important personal asset, here two very clear opportunities for hotels to consider:
- QUALITY OF INDOOR AIR – A clear competitive advantage that can generate additional revenue
Quality of indoor air is of paramount importance to hotel guests and employees. Unfortunately, ventilation systems don’t always get the necessary attention nor funds required to keep them in top condition and up to date with the latest solutions and technology.
Following the COVID-19 outbreak, much emphasis has been placed on surface sanitation, hand-washing, mask-wearing, contactless interactions, the promotion of social distancing and others. These are all valid public health pursuits and should continue, in keeping with expert advice. However, little has been said about the indoor air that we breathe.
Most hotels – especially urban properties with sealed windows – have to deal with a constant flow of airborne contaminants including dust, pollen, mould, mildew, bacteria, chemical fumes, volatile organic compounds from carpets, cigarette smoke, CO2, outdoor pollution and others.
If not dealt with effectively, these contaminants can pose health risks to guests and employees, potentially giving rise to infections and aggravating allergies.
A hotel or resort is legally responsible for ensuring that its environment is safe for all, and at all times – especially during times of crisis.
When it comes to safety and comfort, it is important that hotels implement top of the line equipment (not the cheapest) and strictly implement regular maintenance and cleaning – paying particularly close attention to air ducts, HVAC, cooling towers, and air filters.
It has been proven that the HEPA (high-efficiency particulate air filters) types are at present the very best in the market as those filters can capture 99+% of all indoor contaminants (it is important to note that in order to support the HEPA filters, a stronger than normal ventilation system is necessary).
Second best filters available at present for commercial & hotels buildings are the MERV-16 (minimum efficiency reporting value) filters that with a proper ventilation system, can capture 95% of all the indoor contaminants/particles.
It is to be noted that the MERV scale goes from 1 to 16 and in order to prevent infections, it is strongly advisable that hotels do not go below MERV-13 when installing filters. In addition, UVC germicidal lamps with proper contact velocity, ensuring that the quality of air is safe for all at all times, should also be installed next to the filters.
Of course MERV-14, 15 or 16 will give hotels a much stronger competitive advantage and a clear reason to promote/market it to the consumers. Quality of air is of particular interest/demanded by most market segments patronizing the hotels. Note that with MERV 14-15 filters combined with UVC germicidal lamps, your risk of catching airborne viruses in a room is practically nil.
In case of old buildings where up-grade is not possible, portable air cleaners with MERV-13 or better filters can be used in each room
And let’s not forget the exhaust air system of the public restrooms – which should be running 24/7 at around 30 cfm.
An important question – and a key objective for any hotel – should be: What can be done to achieve similar air quality to a modern airplane, where the cabin air is filtered and renewed every two-to-three minutes?
This may be expensive, but customers would definitely welcome it. It would also be a clear competitive advantage that the hotel could promote.
Of course, it is not easy to measure the impact on business, but operators with top of the line HEPA (or MERV14 or 15 filters with UVC germicidal lamps) facilities can expect a considerable higher revenue in both rooms and public areas as compared with the run-of-the-mill facilities.
Properly explained and properly marketed, a hotel has the potential to increase its RevPAR by 10%-15%. Of course It’s hard to forecast it, but do remember that safety and well-being have become the biggest factor for customers in choosing a hotel, and, in the new normal, properties which take care of all aspects of a guest’s health will be in the highest demand and paying 10%-15% more for it is in most case not an issue.
- Responding to WELLNESS TRENDS and rising demand for holistic health experiences
A holistic approach to well-being could not only help hotels to meet the shifting needs of customers in the new normal, but also enhance the hotel experience overall.
Prior to the pandemic, wellness was already on the rise. Post-pandemic, people are even more focused on personal health and well-being, making wellness-focused offerings a clear opportunity for much-needed revenue generation.
We live in a highly demanding, competitive, ruthless, and stressful world, complete with information overload, unrealistic business expectations, and rising global inequality and people are searching for a better way of life as an antidote to stressful present way of living.
Depression, anxiety, sleeping disorders and trauma are skyrocketing globally at such an alarming rate, the WHO recently stated that responding to mental health issues is now one of its top priorities.
All of this is creating a clear opportunity for hotels to upgrade and expand on their wellness services and facilities to focus not only on the physical, but also the mental well-being of their guests.
Hotel spa and wellness centres have long served as the main port of call for guests seeking to relax and beat back tension with massage therapies and beauty treatments. Many have served – and continue to serve – this purpose well. But at present, savvy hoteliers worldwide are finding different ways to engage with new demands/trends.
The best-placed for success in the new normal, however, will be those wellness centres that recognise they can play an important role in attending to the emotional and psychological needs of their guests too.
To develop or improve a competitive wellness destination, urban or resort, it is exceptionally crucial to create its own distinct concept and philosophy from the very beginning, appealing to the targeted audience.
When properly planned, applied and conducted in a pleasant and professional environment, there are numerous therapies and treatments which can help to enhance guests’ peace of mind and bring long-lasting value to them.
Emotional balance assessments, mindfulness sessions, guided meditation, breathing techniques, acupuncture (including electro-acupuncture), ayurvedic treatments vedanta, tai chi, yoga, reiki gemstone and precious metals therapy, diet advice, sleep-inducing programmes, and hypnosis sessions are just some of the services which could be offered – following some thoughtful renovations and employment of qualified therapists, of course.
Going one step further, hotels and wellness centre operators could partner with professional psychotherapists and neuroscientists to provide comprehensive services to hotel guests and customers. Some of the programmes could also be offered in the hotel room via TV, or streamed via mobile or other in-room accessories.
Making use of virtual reality is also becoming in demand. As an example, new reclining indoor “pods” allow users to see, smell, hear and even feel different virtual nature settings with the objective of creating a more tranquil state of mind.
By effectively responding to the growing prevalence of chronic lifestyle diseases, hotels have a tremendous opportunity to develop top of the line and profitable wellness centres.
To succeed, however, owners and operators must take this opportunity much more seriously. A change of mindset is essential – especially when it comes to the allocation of space and the introduction of new facilities and services.
The traditional hotel wellness set-up consisting of a swimming pool, gym, massage rooms and sauna is no longer enough to meet the demands of today’s guests and customers. Guests now want more than just a copy-paste wellness getaway.
To attract and retain high-spending customers – and ultimately generate financial results – investment in new products and innovative facilities is essential.
Vitality/hydrotherapy pools, infrared and bio saunas, snow cabins/ice fountains, salt caves/brine pools, Hammams, Kneipp Walk paths, Rasul thermal mud treatments, Onsen therapy, anti-ageing treatments, hydrotherapy pools, relaxation pods, and oxygen rooms are just some of the options available for wellness centres seeking to expand their offerings.
Keeping abreast of the latest technological developments is important too. Numerous apps are available to supplement wellness treatments and provide additional relief for guests. ‘Time-shifter,’ for example, is a handy app which helps long-haul travellers adapt to their new time zones. Various virtual reality products are also available for wellness and fitness, which can bring added value to the overall guest experience.
In these uncertain times, well-being has become the most important factor for all of us and in this industry there is need to take hotel wellness to the next level.
Hotels which implement the latest wellness facilities and services could easily double or triple their revenue in this important profit centre. It has been proven that with a proper urban or destination wellness there is an increase in the length of stay, in guest retention and in direct bookings.
(Note: Wellness in the workplace also must be addressed for sustainable success in the new normal).
With every major crisis comes a moment of opportunity. This is a time for the hotel industry to think outside the box and must accept fundamental shifts and structural changes. In addition to efficiency, automation and technology, hotels have a clear opportunity to maximse on well-being as it has become the most important factor for travelers and the industry should maximise on this.
With a broadening audience and heighted search for well-being, the quality of indoor air and an immersive/transformational wellness facility, will definitely spur new and distinctive demand in the coming years. The industry’s pivot to well-being is no longer a trend but a necessity and in some case, this requires a change in hoteliers mindset.
ON TRACK TO RECOVERY
Speech given at the SKAL Club of Hong Kong
by Giovanni Angelini
20 November 2020
Warm greetings and many thanks for inviting me to address this important group of top travel and tourism professionals. I am truly honoured to share my views with you.
Today I have been given the task to share with you my views and position on what the travel and tourism industry is facing, and recommendations on what needs to be done to recover from this nasty pandemic that has caused so much damage. This is not an easy task at all, but I will do my best to share my observations and suggestions.
Before getting into details, let’s try to look at this pandemic as a disruptor that brings important opportunities rather than mere losses and do remember that the present situation will not las forever, and that there is a future out there.
In principle, I don’t want to sound negative, but we must accept the reality of the challenges that the industry is facing.
None of us in this room has experienced a pandemic of this dimension. Sure, some of us had to deal with the severe SARS regional epidemic in 2003. But that lasted only three-and-a-half months, and business bounced back quickly. The H1N1 pandemic in 2009 also had limited impact on the Asian travel and tourism business.
With this pandemic, and with closed borders, we all face more questions than answers, and all of us are in the dark about what to do. There is no manual out-there to refer to, and we’re all in this together. On top of this, the world has entered a period of turbulence and transformation.
Travel and tourism rely on stable and predictable situations, but, at present, it is practically impossible to forecast and plan for the next six months, next 12 months, or even longer as the pandemic is becoming endemic.
The virus is expected to be with us for a long time to come, even with a vaccine, so we have to learn to live with it. Most likely, we will all need to be vaccinated on a seasonal cycle.
My concerns are that, for most hospitality-related organizations which mainly rely on international travellers, the worst is yet to come. Up until now, most companies have been able to secure some type of financing and/or cash to remain in business. But all indications are that cash-flow is becoming very tight or not available for many. Then what?
In terms of getting back to some semblance of normal, I don’t expect the situation to improve much before 2022. And as for getting back to profitability, we will have to wait longer.
This year is a total loss for most (if not all) in our business. Next year, we may see a similar situation. Perhaps during the second half of next year, there could be some minor improvements. But most organizations will be in negative territory. Two consecutive years of losses, who can support it?
2022 is expected to be a stabilizing year, with international travellers regaining some confidence and gradually starting to travel again. Profitability, in most cases, will not return before 2023. The objective here is of course, to shorten the timespan from recovery to profitability. And accept that the cost of getting some business back to operational efficiency will be extensive.
We will have to wait for 2024 or even 2025 for international travel to return to the 2019 levels. Because of this, most organizations will have to rebuild their customer’s historical data. Capturing customer’s preferences and new revenue streams are essential as consumers’ habits have changed throughout the pandemic.
Of course, countries with substantial domestic travellers like China, the USA, India, and some European countries may experience a faster recovery but in general, all organizations have to adopt a longer-term view towards investment returns.
But a very crucial question is arising as to who will survive and who will not. Adequate cash flow will be the deciding factor here. We will definitely see a number of mergers and acquisitions, and unfortunately, some bankruptcy too. The closure of Dragon Air, the insolvency of Virgin Air Australia, and the takeover of Asiana by Korean Air are just a few of the big changes we have seen so far. Many cash-strapped/distressed hotels are searching for new partners and/or buyers.
To this date the pandemic has resulted in only a few insolvencies within the hotel industry, and this is thanks in large part to government aids. But that might change as the pandemic rolls on, consumers await the approval and distribution of vaccines and cash flow simply dries up.
As for Asian hotel companies, we could see two very clear patterns – the ones owned by large groups/families will secure the necessary cash flow, while small organizations will find it very difficult to get the necessary lines of credit.
And sadly, we all have to be sympathetic to the many hard-working and committed people within this industry who have lost or are going to lose their jobs and their income. Very sad indeed.
As for small and medium-size Asian hotel groups, they will find it very challenging to compete against large global brands with extensive networks and economies of scale.
To this day, I find it very difficult to understand why most Asian hotel companies have gone into developing new brands and products without first creating a strong and sustainable base with their main brand. We see many small - and medium-size hotel groups with four-to-five products/brands. To me this is wrong; it’s very expensive, confusing to both guests and employees, and it is the fastest way to damage one’s main brand, which, in most cases, is their ‘bread-and-butter.’
I have tried to explain this to many owners, but it looks like that their egos are bigger than themselves (second and third generations in particular), and who I am to tell them what to do? But it really is a pity to see some of the popular Asian hotel brands constantly losing market position and recognition.
On the other side, there are two successful Hong Kong-based hotel brands, the Peninsula and the Mandarin, which are both focusing on one-brand-one-market. Both have enviable reputations as a result. For me, this is the way to go. Do what you do the best, and what you are known for. Do not confuse the market.
We have to accept that with this virus, travel and tourism as we know it may be over – overtourism in particular – and most organizations have to make adjustments to anticipate and respond to trends and expectations. We may see a change in the overall approach to travel in particular toward culture and nature. Social responsibility will come into play and remember that sustainable tourism is always a big drawcard for many.
This pandemic is transforming the world, and on top of the many geopolitical problems we see arising, in most cases we will be faced with high unemployment, social isolation, anxiety and increased poverty too. Therefore, there will be less demand for travel in the short-medium term. Airlines and hotels are the most affected.
The core business of providing hospitality and experiences will not change, but hoteliers need to rethink the whole administrative and economic process. The road to recovery will require organizations to adjust to an operational new normal which includes, amongst others, multi-tasking, efficiency, productivity, and, most importantly, everyone in the organization to take responsibility and accountability for their efforts. Note that the pandemic is accelerating technology-digital-automation transformation and all must respond to it.
The four basic rules of doing business – revenue-cost-risk-profit – will always remain the same, and nothing is not guaranteed. The present situation reminds us to pay particular attention to risks, especially when it comes to proper insurance and safety measures. Do not take anything for granted.
We must accept that cutting costs alone is not sufficient. It’s easy to do, but it’s only a short term solution. Organizations must be clear on their respective competitive advantages and offer something special in order to compete and attract and retain customers.
Rules have to be rewritten, and mindsets have to change. But are the people in the driving seats capable of steering their organizations in the right direction? We must accept that business will not come automatically; we will have to get it in an increasingly competitive environment.
It’s important at this stage for organizations to pick up the pieces and put their houses in order. But are the present leaders able to adjust their business models and recalibrate the core strategies? This is a very important question for owners, boards of directors, and financiers to ask themselves and take action.
Personally, I have not seen anything new and interesting within the industry yet, and I find this concerning. It looks like everyone is waiting, and not sure what they are waiting for. Also, I have yet to see an inspiring leader who can articulately and convincingly present an innovative way ahead.
Trends are changing fast, and it is clear that airlines and hotels will be faced with fewer business/corporate travellers, with an increase in video conferencing, virtual events, advanced technology and automation. Customers will also expect more. There will be new demands for better indoor air filtration (including HEPA or MERV filters and UVC technology), specific wellness services and facilities/health tourism, healthier foods including meat and dairy alternatives, and, most importantly, for consistency in product offerings.
Traveler preferences and behaviours are shifting toward the familiar, predicable and trusted and in response to this, it is a must for hotels to be more authentic, work on relation building rather than short-term focused and transactional.
In short, we must deal with a clear change in lifestyle and consumer behaviour. Designs for new hotel projects will have to change, and focus on efficiency, comfort, and safety – making everything as easy for the customer as possible.
A crisis should bring about a better way of doing things in the future. Now is the time for hotels to correct some of their bad habits – especially when it comes to irritating additional charges for late check-out, in-room minibar, laundry services, airport transfers and so on. These all have to be properly addressed.
And, on a more important topic, when will the industry fully embrace the 24 hours flexible stay, and get away from the staid and unaccommodating 12-noon check-out and not before 2.00 PM check-in?
Properly implemented, this could be a very clear competitive advantage, and it will be appreciated by all customers. It’s not easy to put it in place, but it’s definitely worth looking at.
We have to recognize that the only organizations to survive and prosper in the face of the current and future challenges will be those that are able to be agile and innovative in their response. Do invest more in your people and create a stronger culture in the long run.
Presently, most regional hospitality-related organizations are having to rely solely on the potential of their respective domestic markets, but not all is negative, and we must look at the positives as well. We know that most people want and need to travel, and demand will eventually return.
Looking at the economic prospects within Asia, as compared with the rest of the world, we should anticipate a positive outcome post-COVID. With the spending power of the rising middle class in most areas, the low cost of capital, the low cost of oil, the controlled inflation, the trade agreements (RCEP and others), and most importantly with the ever strong China engine driving the region, all fundamentals are there for a brighter future and a positive impact on travel and tourism. Personally, I believe that Asia will lead the recovery.
As for Hong Kong itself, questions we have to ask ourselves and address include:
- Is the Hong Kong Government (and other regional Governments) taking tourism seriously?
- What will be the impact on the GDP if we include all the spending from visitors and related services/businesses/activities – airfares, hotels, shopping, dining/ entertainment, sightseeing and others?
- Is the present tourism structure/organization efficient? What needs to be done in this area?
- Are the appointed tourism officials responsible and accountable?
- What are the main attractions for foreign tourists to visit in Hong Kong and the region?
- Why are the two largest entertainment parks in Hong Kong losing money? Is it better to fully privatize them?
- Promoting Hong Kong to the right markets is not an easy task (China alone is not sufficient). We have to ask ourselves if the present team and structure is qualified to do so.
- Based on the facts that travel and tourism in Hong Kong involves the livelihoods of several hundred thousand full-time and part-time people and that most sectors within the industry are facing mounting losses and exhausted funds, the government relief funds as announced, are simply not sufficient to prevent further losses of jobs.
- Tourism should not be taken for granted. It requires serious effort, funds and most importantly, qualified professionals, not political appointees...
On closing, it is appropriate to remember that this pandemic has given many of us an enormous appreciation for the preciousness of life and that we have to take care of ourselves and respect others.
Thanks for listening.