Virtual Coffee Chat — Key Takeaways from April 1

On April 1, Pegasus hosted its first Virtual Coffee Chat with hoteliers from Europe and the Americas to discuss the current fallout from the coronavirus pandemic. A huge thank you to all who participated and shared their stories and insights. Here are some of the key takeaways from our April 1 chats:

How should hotels handle guests that might be staying for quarantine or isolation?

Some hotels that are still open are grappling with how to handle guests that might be staying for quarantine. One key debate is whether or not to work in the “known” or “unknown” — is it better to work officially with a hospital or government agency that implement specific protocols and public health measures, knowing that guests will likely be infected, or should you still serve transient guests that may want to quarantine or isolate, and not be sure if they are infected or not? It’s not an easy answer. For hotels that are exploring these options, we’ve put together an article on how to best prepare your hotel for patients, healthcare workers, and quarantine stays.

Marketing is largely on hold for hotels, but it’s still important to stay on top of marketing messaging.

Now is the time to audit all your marketing channels (website, social media, ads, etc.) and adjust your hotel’s messaging to take on the appropriate tone and voice for the times, as well as use appropriate imagery. You may want to also consider a landscape analysis to see how other properties are delivering their messages. The goal is to be thoughtful, strategic and tightly aligned across all channels where you are communicating with guests. And with the landscape changing quickly, it’s important that you’re also maintaining your message weekly. One opportunity for hotels now is getting creative with social media. With so many travelers confined at home, many are turning to social to engage with content and daydream about their next trip—this is the right time to catch them in the inspiration phase.

The pandemic could forever change hotel demand and segmentation. 

Most hoteliers predict that domestic demand will be the first to come back, as travelers seek to get out but may be hesitant to travel internationally. Corporate demand is slightly unclear—it will come back, but maybe not to the same levels as before. We’ve proven that we can all work remotely, and corporations may be hesitant to take the risk of travel if they can avoid it. Also, corporate contracting for 2021 is still up in the air—will hotels be able to maintain 2020 rates through next year, or will travel buyers demand additional discounts?

Initial booking data shows that group business for Q2 and through July is pushing to August and September (in Las Vegas) and to September, October, November (in Ireland). That seems to be the time frame that the market is currently comfortable making commitments for, although hoteliers noted that some major events have been cancelled altogether and pushed to 2021.

In the past, major events like 9/11 and the Great Recession changed segmentation significantly. Will the same happen here? Will a new type of traveler (like the bleisure traveler) emerge? Will we see things like day-use rooms rise as companies like WeWork close spaces? How should hotels be tracking these potential changes in demand and segmentation? This are all theoretical questions at this point, but are great food for thought.

The OTAs’ approach to dealing with cancellations and refunds has been poor; will this ultimately affect their reputation?

Hoteliers report that many OTAs have been providing extremely poor customers service to the overwhelming number of requests for cancellations and refunds, particularly of non-refundable bookings. In some cases, travelers have not been able to get through to customer service before the booked start date of a trip, leaving them extremely frustrated and angry. Hotels have had to field calls from OTA-booked guests requesting cancellations, but then not understanding why hotels cannot process cancellations on their end.

This has laid bare the often complicated relationship between OTAs and hotels, as hotels often can’t cancel OTA bookings on behalf of guests because of the commission costs that are still due to the OTAs. Hotels should take the opportunity to remind these guests that they would have a lot more flexibility with their bookings if they book direct. In the future, will guests be more risk averse and prefer refundable to non-refundable bookings? Will they be more inclined to book direct? Either way, OTAs will have a lot of damage control to do in order to win back consumer trust.

Now is the time to leverage your relationship with your local CVB and industry associations.

Hotels should work with their local convention and visitors bureau, who can help facilitate discussions among all stakeholders during this time and will also be helpful in positioning the market for the return of demand. While we can all expect a long and perhaps painful road of recovery ahead, the markets that will come out of this stronger are those that are working together.

Join us next week to chat about corporate contracting and rate strategy

Interested in participating in the discussion? Next week we will have guests Elaine Kennedy, VP of Hotel Market Planning at Pegasus, and Cathy A. Enz, Professor Emeritus at Cornell University School of Hotel Administration, SC Johnson College of Business on our virtual coffee chats. Click here to learn more.

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