137In this episode, the Fueligans chat with Industry Guru, Tim Peter, about his advice for hotels and travel industry businesses who are feeling the shock and pain of the past few weeks. Fuel is here for you as we all try to navigate these stormy waters and adjust to the “new normal”.
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Here’s Tim’s original post that was an inspiration for this episode:
1. Realize that we’re playing Poker, not Chess
Why is this situation so different from anything we’ve seen in the past? It comes down to uncertainty. Typically, our threats have been more about risk. This is an entirely different game and we need to understand the rules, we need to be adaptable, and we need to focus on the things we know, the things we control, and then make a bet on the rest of it based on our confidence level.
2. Review your insurance, talk to your bank, and stay informed about government assistance
Is coronavirus COVID-19 part of your coverages? Are you able to recoup any losses from business interruption insurance or similar? While insurance is unlikely to cover all your costs, they may help lessen any economic burden COVID-19 places on your business. Also, we’re seeing that a lot of banks are being extremely flexible right now. If your biggest worry is that you may not be able to make your next loan payment, go have a conversation and see what help they may offer. Finally, there are new government assistance programs being announced at a federal and state level on a daily basis. Get involved with your local Chamber of Commerce and use them as a resource to help you understand what’s available.
3. Cut Your Costs Strategically but Ruthlessly
For many of us, this is an existential crisis. The very survival of our business is hanging in the balance. As you think through ways to cut your spending, do so with an eye on the short term and the long term, and be prepared to consider the things that were unfathomable a few days ago. However, while you’re doing this keep in mind that there is a future and those that are best prepared for the new normal will make the most of the opportunities that present themselves
4. Don’t cut your rates.
Anytime business softens, an easy “fix” is to offer deeply discounted rates to your guests. The theory behind this action supposes that you can use lower rates to attract attention and steal market share from your competitors. Except that most of the time it doesn’t work, especially when price is not what’s preventing people from traveling, it’s fear.
5, Change Your Marketing Thinking not Your Budget
One cost you absolutely don’t want to cut is your marketing spend. Yes, you absolutely must monitor and control your expenses during any economic disruption. But evidence shows that travel companies that continue to invest in marketing during a downturn significantly outperform their competitors in both the short and longer-term. Research from Amrik Singh at the University of Denver and Chekitan S. Dev at the Cornell University School of Hotel Administration shows that “The results of this study show significant differences between winners and losers when measured by top-line indicators (Average Daily Rate [ADR], RevPAR, TRevPAR) and profitability (GOPPAR and NOIPAR). Winners were also found to spend significantly more on marketing than losers… total marketing expenditures are significantly and positively correlated with RevPAR, GOPPAR, and NOIPAR [during a downturn]. This finding implies that an increase in marketing expenditures has a positive effect on revenue and profit.” [PDF link]
6. Don’t disappear from social.
The team at Screen Pilot put together an outstanding set of recommendations on how to effectively be “aware, available, and agile” on social. Many of these include items addressed above such as “encouraging consumer confidence” and using your FAQ pages to reassure guests. But the whole set is excellent and truly worth your time. You can check out their advice here.
7. Keep learning but don’t burn out
The current situation requires an adaptable approach to the rapidly shifting marketplace. Anything that helps you keep learning is a good move. Tim’s post is a great resource to stay informed. Fuel has also put this Master List of Crisis Resources together for folks who are looking for more information.
8. Help others and Keep Smiling
While you are certainly hurting right now, there are likely others around you who are hurting as much or more. Be someone who is bringing a little light and levity to the world by sharing your ideas and your talents. The thing we love most about the hospitality industry is the love for others. We need each other now more than ever and we encourage everyone to put on their best smile and help both your local community and the hotel industry as a whole. We will come through this and we will come through it stronger if we do it together.
In The Newsaroos:
Submit your questions and topic ideas on Twitter to @fueltravel or firstname.lastname@example.org.