Earlier this week, part 1 detailed how the hospitality industry can recover from the COVID-19 coronavirus from a revenue management, sales and marketing perspective; for part 2, it examines recovery across food and beverage, meetings and events, operations and finance.
2. Food and beverage
During the freeze period, the food and beverage department can work on two to three simplified set lunch and set dinner menus with the consideration of purchasing. This action will greatly serve the in-house or outside customers’ needs.
In cooperation with a trusted logistics third party, hotel restaurants may also qualify to provide “contactless” food delivery services to capture the demand during the freezing period.
During the Chinese New Year, some hotel groups began food delivery services, taking advantage of hotel labors and food storage with professional cooking to supply outside customers and increase revenue to maintain cash flow.
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COVID-19 will have an impact on guest dietary habits and taste preferences. After the outbreak, people will pay more attention to hygiene and dietary considerations. Hoteliers may consider redesigning menus with this in mind.
During the freeze period, in-house guests may be required to eat meals in their rooms or sit individually (not to dine with anyone else) in the restaurants. This could have an impact on table layout design and seating effectiveness in restaurants. Optimize your floor plan with this in mind.
3. Meetings and events
Convention hotels are facing especially difficult times during the COVID-19 outbreak. For example, last-minute cancellations of major trade shows such as Mobile World Congress, in Barcelona, ITB in Berlin and other international celebrations such as the Venice Carnival and global sporting events, will have far-reaching effects.
The loss of revenue, not only to the hotel industry but also the local economy, will have repercussions for years to come. The recovery of the meetings and events business segment, including international conferences, will take much longer than other segments. These hotels have more guest rooms, meeting facilities and cooking equipment, and they usually rely on group business the most.
Throughout history, the hospitality industry has never been completely destroyed in any tough period.
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Convention hotels may explore expanding into new markets, such as office buildings or small enterprises in the area that do not have a staff cafeteria, to provide food delivery and deli products. This can help to promote the hotel’s reputation, increase total revenue by fully using the resources as well as release some cash flow pressure.
In addition, convention hotels are qualified officially as outside catering businesses, so you can get business from this segment for banqueting revenue during the recovery period.
Additionally, people will still have concerns about lunch or dinner gatherings in big groups. Chinese hoteliers may consider providing a western dining style instead of the traditional Chinese family style in restaurants, even for wedding events. This new style can prevent the spread of the virus contagion and also avoid food wasting. However, it will require careful calculation on the potential increase of labor expense and food cost.
4. Operations
Focus on forecasting for sanitation and room control. During this outbreak, revenue managers should update hotel daily occupancy forecasts and provide them to the operations department for proper staffing. The revenue manager needs to keep close communication with the front desk and housekeeping department to make reasonable arrangements for the use of rooms so the hotel can carry out energy control, saving energy by floor or by area.
After the outbreak, to keep up with increasing public attention on a healthy environment, hotels need to focus on more details of health services, including guest room hand sanitizers, fresh-air systems, display of indoor air quality, high-quality bedding, nourishing, organic food supplies, airport transportation vehicles in clean and disinfected condition, etc., to improve service quality and customer satisfaction.
5. Finance
Forecasting is key! The forecasting of cost focuses on energy, labor and all those unnecessary expenses, and then controls those costs to minimize it. This process requires collaboration from all departments.
In terms of labor cost, try to clear out staff overtime and encourage everyone to take annual leave and/or schedule mandatory training sessions during the period of low demand.
Maintain cash flow and hotel operations. In times of economic crisis and major emergencies, most small- and medium-size enterprises fail to survive due to cash flow disruption. The hotel management team and finance department can consider the following ways to counteract this:
- Energy cost controlling is always the crucial way of saving. Based on the business forecast shared by your revenue management team, the energy consumption of guest rooms can be arranged in advance. When occupancy drops significantly, block the area by floors or by areas to reduce unnecessary energy consumption.
- The finance department can negotiate with the purchasing suppliers to extend the payment cycle or temporarily reduce the proportion of expenses.
- Try to seek help from rent reduction or reduction on brand management expense.
- With the help of the policy of loan rate reduction, only keep the necessary purchases to maintain hotel operations.
Throughout history, the hospitality industry has never been completely destroyed in any tough period. Although we can’t press the “restart” button on 2020, we can definitely launch into “repair” mode now, despite being forced to a standstill by the big pause button that is COVID-19.
Chinese hoteliers have done a tremendous job thus far staying calm and responding positively to the challenges in this freezing period and should stand as a testament to other regions being affected. The rapid response of hotel groups to protect the health of staff and guests and to take various actions to support the first-line medical staff has been heartwarming to see.
Meanwhile, the future of our industry is bright, the outlook remains positive and better, healthier days lie ahead.