Guide: How to Protect Your Hotel Business during COVID-19
The effect of COVID-19 is being felt around the world and in different sectors of business. The school can’t go face-to-face, the mass gathering is prohibited, business related to concerts and going to the clubs are not allowed, and many countries are either still closed or implementing restrictions for international travelers, etc. Furthermore, the hotel business during COVID-19 has been almost non-existent in some countries. These are just a few to mention.
The Tourism Sector is one of the groups hardly hit by COVID-19. This sector includes Transportation, Accommodation, Travel Agency, Parks, Souvenirs, Entertainment, Food, and Beverage, etc. Many workers from this sector have been experiencing layoffs due to the inability of the company to give them proper compensation since the demand has decreased dramatically. Although companies didn’t want this to happen, they had to in order to protect their businesses.
Hotels around the world, which are still under the Tourism Sector, are making efforts to survive and protect their business especially this time of COVID-19. What measures are they exactly implementing? Let’s find out.
How to Deal with Changes in Demand and Forecasting Overall Profit
The first thing that the hoteliers will notice if there are changes in the demand is the number of hotel bookings. Even some of the countries were able to contain COVID-19, there still are some nations not yet open for tourism. Also, some of the people are still scared to travel and we can’t blame them should they cancel their hotel reservations just in case they have. The hoteliers should be understanding about the situation but do something at the same time to combat the problem.
One of the things hoteliers can do is to encourage customers to simply retain their bookings at no extra cost. If it’s an event, the hotel can encourage customers to move its date.
The forecasting of the overall sales is affected as well by the decrease in hotel bookings. If the hotel bookings plummet, the company has to find new markets to find more potential customers. The first step to this is to evaluate the company’s position at a corporate and property level.
The Corporate Level
When we’re talking about Corporate Level, we’re dealing with the position of a hotel in a certain ranking. For example, after the different hotels in a certain country submitted their monthly sales to the Bureau of Internal Revenue, they will be ranked according to their sales. If your hotel is at rank 50 out of the 100 participants, you’re not even on the Top 10. This signals that you have to work more to position your hotel in a better ranking.
The Property Level
The Property level, on the other hand, pertains to your own hotel and how you evaluate your performance based on the objectives you have set up for your company. You can develop your own rubrics to measure the performance of your sales, the performance of the employees, customer satisfaction, etc.
The final output of all these efforts is a better marketing strategy to position your company in a good ranking by providing good products and services, prices, distribution strategy, and improved advertisement for increasing your potential customers.
How to Deal with the Demand Forecast by Using a Pricing Strategy
Lowering the prices for your goods and services doesn’t mean you’re going to get more customers. Although this idea may attract some people, in the long run, it might not just work. Some people would still prefer better products and services rather than the price. In fact, some people might even think your offerings are not good because your offerings are cheap. Thus, the hotelier must find a balance between cheap prices and products and services.
Creating forecast demand doesn’t only depend on your pricing strategy but also on your product and services offering, distribution strategy, and advertisements.
How to Control Your Costs and Continue Your Growth at the Same Time
As an effect of COVID-19, expect that there will be a drop in your sales. You wouldn’t want unnecessary expenses to have a good cash flow. However you do this, your business will still continue to operate. Your employees and the company continue to grow. Make sure you have a budget for employees’ training and development and for the company’s marketing campaign.
How to Bounce Back After COVID-19
Life is like a wheel of a car. Sometimes you’re at the bottom but sometimes you’re on top. While your business is down, it gives you time to reflect on what’s really happening with your business and plan for your come back. The attack of COVID-19 has a duration. The earth will go back to normal soon.
Review your past performance and plans for the past 5 years and create a future plan for the next 5 years to come while the pandemic is still in effect.
Do you need further advice regarding protecting your hotel business during COVID-19? 3E Accounting has some of the best Philippine business startup specialists. Contact us for more information.
