Strategies for hotels to stay afloat post COVID-19
Hotel operators in Thailand will have to adopt new strategies in order to survive the fallout from the coronavirus pandemic and without an influx of international tourists on the horizon, must overhaul operations, and set a new focus, experts say.
The absence of international visitors since the beginning of the pandemic means local hoteliers are having to share the domestic cake of about 35% occupancy. Foreign tourists account for 65% of the tourism industry in Thailand.
However, there is light at the end of tunnel. Amornpan Somsawat, a hotel business consultant, suggests that rather than dwell on what might have been, hoteliers should change their mindset and focus on the market that remains. “Expats are still here, and the operators have to narrow their target and concentrate on that segment,” she said.
During a recent online panel discussion on the hotel industry held recently by Siam Commercial Bank, Amornpan said adopting strict hygiene standards is crucial as hotel guests are now very concerned about safety. The pandemic has led to changes in consumer behavior and hoteliers must respond, accordingly.
Hoteliers have to rethink their marketing and communications strategies as well. “Due to the pandemic, your target group will be clearer – in fact, much clearer – so your marketing and communications must be redesigned to reach the target group. There’s no more beating around the bush,” she said.
Thailand is facing a dilemma. It will possibly see new infections and local transmission when it reopens its borders to international tourists. But if the country doesn’t reopen, the impact will be massive. Tourism Authority of Thailand’s Governor Yuthasak Supaporn predicted that around 2.4 million out of 4 million jobs in the hospitality industry will be at risk.
TAT forecasts a total of 6.7 million international arrivals in 2020 and revenue of 332 billion Baht, down 65% from 2019. It has also downgraded its 2020 estimates to 70 million domestic trips from 80 million, contributing 418 billion Baht in revenue, a decrease of 61% over 2019.
Although a large number of hotels across the country have not reopened, those known to attract local visitors and expats have resumed operations. The lifting of travel restrictions has benefitted many hotels, especially those in locations popular with Thais.
In addition, the staycation is booming, and some operators have adapted their businesses to attract local people. For example, hotels in Bangkok have launched special promotions to draw people to join the staycation trend while many tour activities; such as; bike tours, scooter tours, and whale watching have turned their focus to Thais now that there are no foreigners.
“We’ve just wrapped up a very special rate for the period since the travel ban was lifted, and we’re approaching the high season, so we will be offering a new promotional rate. The new rate will be applied across all platforms, which means you can book a room on our website and get the same rate as those offered on OTA (online travel agent),” she said.
Hotel Consultant Amornpan is full of praise for the Aksorn Rayong’s policy, pointing out during the webinar that “It’s a golden period for hoteliers.” “This is the time to grab the opportunity to bring back direct booking and bypass OTA, which will benefit your cashflow as you get the money faster than if customers book through OTA like booking.com or Agoda and also give you a higher return, as you won’t be paying commission.
“What you must work on now is convincing customers to book rooms with you directly. I’d suggest it is about time you went back and made your website attractive and user-friendly,” said Amornpan.
Hoteliers should consider developing their websites to make them compatible with mobile browsing. as this will enhance user experience and lead to successful bookings. The website should also have a strong presence on leading meta search engines like Google Hotel Ads.
Kitchen and menu overhauled
In the months or even years following the COVID-19 crisis, the entire market will be more price-driven than ever. With customers having less disposable income, affordable meals will be in high demand. People will also look for added value experiences, and hotels must respond, accordingly.
Dusit International Bangkok’s Global Vice President, Food & Beverage, Jean-Michel Dixte says he can foresee a trend where hotel companies will invest less in F&B operations and related human resources meaning F&B programming may be massively reduced overall.
He predicted quick service restaurants and fast casual dining establishments will take over the standalone market, each featuring minimum layers of staff and requiring minimal skills while still providing decent dining experiences in their related segments.
“To compete, hotels will increasingly use high-speed ovens, sous vide techniques, and other versatile cooking machines and methods that offer consistent levels of performance while simplifying cooking processes, allowing for smaller kitchens, and requiring less staff.
“The luxury dining sector will become super niche with table service led by staff who are skilled, knowledgeable, and passionate about their craft. Michelin Star chefs will become only affordable to the 1% who control the planet. High-end restaurants, as we know them, will become a thing of the past remembered only by a few,” he added.