The second day of the virtual Hotel Optimization conference, presented by Questex Hospitality Group (parent company of Hotel Management and the International Hotel Investment Forum) and AAHOA and sponsored by AVIXA, examined everything from new normals for meetings to best practices for marketing and revenue-generation.
Technology and the Customer Experience
The first panel, sponsored by Chargerback and moderated by Hotel Management Senior Managing Editor Elaine Simon, explored technology and the customer experience in a post-COVID world. The first question on everyone’s mind, of course, was whether or not meetings and events would ever return to the precrisis norm. “In the short term, the answer is, unfortunately, no,” said Eric Gavin, chief sales officer, Benchmark Hospitality. Instead, he said, event organizers are leveraging a hybrid approach of live streaming to multiple locations or pairing interactive breakout experiences with live streamed content.
Larger in-person gatherings, he said, may not return until Q2 of next year—or beyond—as restrictions soften.
Katherine Kies, VP of the food and drink innovation group at PM Hotel Group, suggested that thousand-person events will, for the time being, be 200-person events. She was, however, more optimistic about the time frame than Gavin, predicting that large events may return within a year. “I don't think that meetings are going away, and if you'd asked me that three weeks ago, I might have had a slightly different answer,” she said.
Mark Van Amerongen, COO Prism Hotels, agreed, noting that his properties are seeing increased demand for Q4 of this year and the first quarter of next. The key, he said, will be having the necessary space and the technology to suit all demands—including hybrid meetings. “You've got to have the bandwidth and you’ve got to have the technology in your property to be able to accommodate those guests' needs, and they're going to want to test it and they're going to want to see proof before the conference,” he said.
By and large, Van Amerongen is seeing two different kinds of meetings these days: “There is the single company meeting—a retreat or a product launch—and we can be very clear with the meeting planner what our policies are,” he said. “And typically, all of our attendees adhere to those [rules] very well. Where there's a greater challenge is when there's people from different organizations coming together for a meeting.” In those situations, he said, some people adhere to safety guidelines and some do not. “The biggest issue that we've had is calming both sides. That is a skill that we need to train our associates for.”
Michael McCartan, VP of food and drink at McCartan Tech Consulting, suggested that events may not attract the crowds they once did for a while. “People are going to be a little more selective about which events they attend,” he cautioned, noting that people may feel more comfortable attending local gatherings than ones they need to fly to.
In the meantime, hotels can still make use of their event spaces for different kinds of events. Van Amerongen reported getting a “lot of requests” for alternative uses—for example, a hotel in a university town is renting its event space to the school to use as a virtual classroom. “So adaptability and being able to meet the customers' needs are going to be key when [the events industry] comes back,” he said.
The second panel, moderated by Andrea Stokes, practice lead, hospitality at J.D. Power, examined the changing messages hotels need to send and how to reach the right guests.
Marketing, said Chris Daly, president of Daly Gray Public Relations, can be defined as “what to say, when to say it and who to say it to.” Professionals across the industry, he added, are struggling to convey the message that they are doing everything they can to keep both guests and staff safe. “What it really gets down to is people want us to send some transparency. So if you can communicate [that you] are very much aware of what's going on, what the issues are, what the problems and concerns are to both your staff and to the people who will be staying in your properties ... you're beginning to stake out a leadership position, which is going to help you and your properties moving forward.”
Loren Gray, founder and CEO of Hospitality Digital Marketing, emphasized that hotels need to focus on the preopening steps before they get to reopening. “You can’t come back into the market the way you left the market,” he said. “You can't have a rate and date, you can't talk about how beautiful and sunny or whatever it may be. You have to talk about the realities of what people are most interested in [talking] about.” The downturn, he said, is a chance for hotels to take control of the conversation and emphasize what hospitality is: “We take care of you,” Gray said of the message’s theme. “‘This is what we're doing for you when you arrive. This is what you need to know when you get here. How can we help you?’ Not, ‘Welcome to wherever we are.’ ... We can get to really personalized communication, genuinely, for the first time in a long time.”
Brian Klein, senior business strategist at MMGY Global, noted increased media and social media consumption during quarantine, and encouraged marketers to take advantage of new demand. “We have advised our clients to move their budgets to more flexible, lower funnel channels,” he said. With budgets slashed, less-expensive and more-targeted channels like programmatic digital and online video can help. “Media is definitely a lot cheaper right now as well,” he added. “Now is actually the time to be turning your budgets back on and actually plussing them up when you can because we've seen almost a 50 percent drop in [cost per thousand impressions].”
But while short-term shifts in strategy may be good for attracting attention now, Klein cautioned, the industry \ likely will return to something recognizable soon, and the new strategies may no longer be effective when that happens. “You want to make sure that you aren't necessarily throwing out your long-term strategies because a lot of what we found success with in the past is going to come back,” he said.
Recharge your Revenue Management
The day’s final panel, moderated by David Eisen, HotStats’ director of hotel intelligence & customer solutions and former editor-in-chief of Hotel Management, examined best practices for maintaining or even growing rates as occupancy increases.
Hoteliers, said Joe Pettigrew, director of revenue maximization at Starwood Capital Group, need to re-evaluate their entire business strategies and hit the reset button. “How does COVID-19’s new norm apply to each one of those revenue streams?” he said owners should ask themselves. “And what would we need to pivot towards in order to maintain or gain market share?”
Rachel Moniz, EVP of operations for HEI Hotels & Resorts, said her team is using data to understand where there's demand in order to maximize profitability. “Right now, it's no secret that [most occupancy is] really leisure,” she said. “So our commercial strategies have been targeted towards the leisure customer.” With demand primarily for weekend trips, she said her team is calculating competitive rates and then pricing to gain market share.
For possible business guests, she said, hotel sales teams are sharing photos of event rooms set up for social distancing, making sure organizers are aware of steps being taken to ensure safety. “We're not taking our eye off the ball for future business,” Moniz said. “It's very important that our sales team is rebooking business instead of something getting canceled outright.”
Donald Wise, senior managing director and co-founder of Turnbull Capital and founder of CBRE, said the downturn is an opportunity to make lemonade from lemons. Hoteliers can use the time to better understand their guests and what matters to them. “Put yourself in their shoes as far as their fears [about] coming back into their hotels,” he suggested, adding that “savvy hoteliers” who are well-capitalized have a chance to cannibalize some of their market share. “Go ahead and do a PIP,” he said. “Spend $10,000 $12,000, $15,000 per guestroom. You’ll see your recovery faster, your occupancy come back faster, have a better chance to [raise your] average daily rate quicker, [because] you may be the only hotel on the market with a new, fresher product.” What better time to do a property improvement plan, he added, than when occupancy is at 30 percent?
One bright spot in this downturn, Wise added, is that business professionals have access to significantly more data and more skills than they in previous recessions. “We know what our issues are,” he said, but emphasized that many of these problems, like sluggish travel and limited airlift, are beyond hoteliers’ control. What hoteliers can control, he said, is the message they send to guests and staff alike, both via marketing and through visible sanitization efforts.
During the session, AVIXA sponsored a poll asking attendees to rank the use of digital displays and other AV technologies as a priority in their post-COVID strategies from 1 to 5, with 5 being the most important technology you will use. Fifty-eight attendees responded as such:
Breaks during the day were sponsored by CleanBrands.
Click here to register for Day 3 of Hotel Optimization.