By Larry Mogelonsky, MBA, P. Eng. (www.hotelmogel.com)
We all know that Covid will require the continued
implementation of enhanced cleaning protocols and capex, all of which will be
factored into the new room rates that’s offered to guests. We don’t want to
charge our guests more; we have to in order to break even.
But therein emerges the prolonged problem of sticker shock
whereby, except for the upscale or luxury customer, price sensitivity becomes a
foremost thought. And we can’t lower rate because this creates a milieu of
other problems including brand dilution, understaffing due to an occupancy
surge and running a deficit on each room sold. Given how important price
already is in the purchasing decision, though, I ask if there are certain
COVID-related services that can’t be offered as an add-on moving forward to
help present your hotel in as attractive a light as possible – that is, as low
a price as possible – while still keeping healthy margins above costs.
A strong caveat must be stated before debating what’s obligatory
versus optional for your customers. All hotels must ensure the safety of their
guests and stay in compliance with any new cleaning and sanitizing standards
that emerge from this pandemic. However, through what we are describing as
post-Covid stress disorder (PCSD), some travelers will be more anxious than
others in the post-pandemic world, meaning that this cohort will continue to
demand high levels of physical distancing and sanitization while others will
simply want to move on with their lives.
So, once you have the ‘basics’ covered to safeguard everyone
according to the local and state guidelines, what’s needed to appease the PCSD
guest might in fact make the nightly rate unappealing to everyone else,
especially if a lengthy global recession emerges which will make the average
guest even more sensitive to whatever BAR you offer. This presents the
opportunity to split off the more excessive measures as additional fees that
the PCSD customer can purchase a la carte in order to keep the sticker price as
low as possible to stay competitive on the OTAs, in meta-search and against
alternate accommodation platforms.
Because let’s face it, the very of essence of our humanity
is not compatible with all the draconian procedures stipulated for operating
during a pandemic of this sort. We endure it to flatten the curve, but we don’t
want these measures in place for any longer than they have to be.
Some poignant examples of our current economic model
demonstrate the increasingly urgent need to return to a normal state of
affairs. For instance, how is physical distancing possible for a little
restaurant that must pack its front-of-house full of tables and complete
multiple turns per night just to keep the lights on? A small enterprise like
this can hold out with shrewd finances and a loan, but long-term the business
structure is unfeasible. Next, how do we create a vivacious and emotionally
engaging space in our hotel lobbies without lots of people to give it that
energy? Building on this, how do bars, nightclubs and event halls ever open
again with some semblance of worthwhile capacity?
While I am indeed suggesting an eventual return to normalcy,
albeit with permanently upgraded sanitization standards, the key word is
‘eventual’. But within this next normal, the divergence in expectations for
PCSD and non-PCSD guests will present us with the opportunity to provide a safe
environment for all while still preventing drastic cost overruns.
Here are some thoughts for items that can implemented as
add-ons or bundled in a resort fee model to drum up ancillary safety revenues:
- Being
assigned to a ‘Covid safe’ section or floor at the hotel where more
extreme cleaning and sanitization protocols are provided
- Verified
48 or 72-hour booking buffers (over, say, a more reasonable 24 hours in
the new standard) whereby the PCSD guest pays for the extra prearrival
nights from when their room is off-limits prior to check-in
- Housekeeping
and turndown services that are ‘Covid safe’ for stayover guests whereby
the new standard may become no cleaning or staff entry whatsoever while a
room is occupied
- Superior,
branded PPE and customized hand sanitizer units made available in the
guestroom, with enough there for however many nights booked and guests
registered
- Upgraded
F&B service delivered in a safe, overly sanitized method to the room
instead of delivered at the restaurant or for pickup, and for all meal
occasions
- Guaranteed
safe airport transfers in a sanitized car and other transportation
services
- With
the trend towards décor minimalism so as to limit guestroom cleaning
requirements, perhaps hotels can even charge for the presence of extra
furnishings in the guestroom and soft goods that are not single use
As previously mentioned, the upselling model for many of
these additive amenities will depend on a property’s star level and target
demographic. For luxury guests, they may expect most of these already included
into the nightly rate and not bat an eyelash at the elevated price. Others may
not be so blasé.
If you do decide to offer these debatably superfluous
add-ons, know that selling them is just as important as the features
themselves. In a ‘do you want fries with that?’ model, your first step will be
to properly train your intake team to prompt customers about these options at
the appropriate times during the reservation process. Concurrently, you must
communicate to your loyalty base what you are including as standard and what
will be available for a surplus cost.
After that, investigate how your existing technology
suppliers can add in these upsell opportunities into the prearrival experience.
At the very least, PCSD guests should be able to select these amenities from
within the booking engine and via third-party websites. And then, what one
customer selects versus another must be put through to the CRM so that you can
better tailor the onsite experience to meet one’s anticipated level of anxiety.
What I would emphasize here is that like all things emerging
from the pandemic, it is an opportunity to reinvent your business. But that
model must be profitable or else it will fail, and so upselling certain Covid
sanitization procedures as paid-for amenities may be the way to keep your
margins.
About Larry Mogelsonsky
Larry Mogelonsky
One of the world’s most published writers in hospitality, Larry Mogelonsky
is the principal of Hotel
Mogel Consulting Limited, a Toronto-based consulting practice. His
experience encompasses hotel properties around the world, both branded and
independent, and ranging from luxury and boutique to select-service. Larry is
also on several boards for companies focused on hotel technology. His work
includes five books “Are You an Ostrich or a Llama?” (2012), “Llamas Rule”
(2013), “Hotel Llama” (2015), “The Llama is Inn” (2017) and “The Hotel Mogel”
(2018). You can reach Larry at larry@hotelmogel.com to discuss hotel business
challenges or to book speaking engagements.
Media Contact:
Larry
Mogelonsky
Email: larry@hotelmogel.com
Website: http://hotelmogel.com/
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