HOSPITALITY POST PANDEMI P - global.hsmai.org · hospitality sales, marketing and revenue...

HOSPITALITY POST PANDEMIC PLANS A special HSMAI Report

June 2020

By Insight | Out

http://hsmai.org/

https://www.linkedin.com/company/hsmai/

Hospitality Post Pandemic Plans – HSMAI Report Page 1 | 20

In a crisis situation, business leaders don’t just need information. They need quantifiable data that can help guide strategic decision making and help in planning recovery. That’s what this HSMAI Special Report — presented with the support of our 4 regions; Americas, APAC, Europe & Middle East — provides. While the impact of the global coronavirus pandemic is still volatile, hospitality sales, marketing and revenue optimization professionals

should be focusing on how they are positioning their properties, companies, and brands — not just right now, in the midst of the crisis, but in the aftermath. Research like this is relevant because the ability to quantify sentiment about future strategy and scenario planning on a timely basis is unique and is vital. All hospitality and travel businesses globally need to pivot their strategic marketing trajectory and we believe this report will help guide that direction. We wish you well in the planning for your recovery and encourage you to continue to leverage HSMAI resources that will help fuel sales, inspire marketing and optimize revenue. Robert A. Gilbert, CHME, CHBA President & CEO Hospitality Sales & Marketing Association International | HSMAI

HSMAI is a global organization of sales, marketing, and revenue optimization professionals representing all segments of the hospitality industry. With a strong focus on education, HSMAI leads the way in identifying and communicating trends in the hospitality industry. Operating as a leading voice for both hospitality and for the sales, marketing, and revenue optimization disciplines, HSMAI connects its members with customers. Founded in the United States in 1927, HSMAI is a membership organization comprising 5,000 members from 35 countries and chapters worldwide. HSMAI operates around the globe via regional boards of directors and staff. There are four regions: the Americas, Asia Pacific, Europe, and the Middle East. Each region has signature programs and services for association members. HSMAI has a Global board which is made up of delegates from each region.


TABLE OF CONTENTS

SUMMARY .............................................................................................................................................. 3

Study Objectives ................................................................................................................................. 3

Sample Distribution ............................................................................................................................ 4

KEY FINDINGS ......................................................................................................................................... 5

Planning Horizon ................................................................................................................................ 5

Business Offering ................................................................................................................................ 6

Inventory ............................................................................................................................................ 7

Feeder Markets .................................................................................................................................. 8

Segmentation ................................................................................................................................... 10

Pricing Structure ............................................................................................................................... 12

Distribution ....................................................................................................................................... 13

Sales & Marketing ............................................................................................................................ 14

Technology ....................................................................................................................................... 16

Staffing Structure ............................................................................................................................. 17

TAKEAWAYS ......................................................................................................................................... 19

ABOUT THE AUTHORS .......................................................................................................................... 20


SUMMARY

HSMAI surveyed hoteliers from different regions, brands and property types around the globe and across the all commercial disciplines to capture their views and plans for recovery after the pandemic.

Overall findings reflect the deep transformation of travelers’ mindset and behavior following COVID-19 crisis and lockdown, which resulted in profound changes on hospitality commercial process.

Hotel executives are rethinking their mid-term business planning approach, and transforming their offering to match the new needs of the post-pandemic guest. There are also deep adjustments to sales & marketing processes as well as the staffing structure.

Demand is anticipated to be generated from closer geographies, which translates into a new segmentation main focus in “Staycation” as well as a regained interest in “Leisure individual” and “non-contracted” segments which are becoming of more interest via the development of distribution opportunities in many recovery plans.

All of this have resulted in changes in the pricing structure in favor of adopting dynamic-price contracting. In addition, there is now more interest in implementing one-to-one marketing approaches such as attribute based and customer centric pricing. In fact, loyalty programs are at the core of many hoteliers’ recovery plans. Online distribution focus continues to grow and digital marketing is considered to be a key focus for the commercial recovery plans.

Hospitality commercial executives are planning for major shifts in technology consideration and staffing adjustments to

align with the big changes that took the industry by storm

Study Objectives

This study was carried out for HSMAI’s global ROC@Home, a day designed to fuel recovery efforts across the industry (17 June 2020). This report aims to provide a global commercial-centric hospitality analysis that focuses on post COVID-19 plans, more specifically on mid- and long-term decisions that hospitality executives are working on in the perspective of the next budgeting & business planning period. The report also provides regional & commercial area analysis to deliver a comprehensive understanding of how hoteliers envision business in the next phase: the phase of recovery.


Sample Distribution

The study was based on an online survey that was distributed to hoteliers across the globe between 20 May and 2 June 2020.

211 hotel executives participated in the survey with different responsibilities and functions across the commercial disciplines in the hospitality business.

Organisation Brand

Multi-

property71%

Single

property29%

Organisation

International

69%

Local14%

Regional17%

Brand

Region

Americas

39%

APAC

5%Europe

20%

MEA35%

Region

Respondent’s Responsibility

Area10%

Corporate37%

Property -Cluster

19%

Property -Standalone

32%

Other2%

Respondent's Responsibility

Respondent’s Function

44%

37%

22%

70%

46%

25%

28%

8%

12%

Sales

Marketing

Communication

Revenue Optimisation

Distribution

Meetings and Events

Executive Management

Asset Management / Property Owner

Operations

Respondent's Function

Multiple answers


KEY FINDINGS

Planning Horizon

The majority of hotel executives across brand and hotel types are adjusting their business plans for the midterm horizon (up to 2022) to mitigate the deep effects of the pandemic on the hospitality business.

On the other hand, some hoteliers are considering adjustments for the short-term horizon (2020-21), however with interesting variations between different organization and brand types.

Interestingly, 17% of the international brands are considering a long-term path to recovery (up to 2023) while most of the local and regional brands are not looking that far yet.

29% 28% 25%37%

23%

44%

57% 54%69% 53%

59%

51%

14% 17%6% 10%

18%

5%

International Regional Local Multi-property Single property

Total Brand Organisation

COVID-19 impact (term)

Short Medium Long

Q: How will COVID-19 impact your approach to budgeting / business planning for the recovery

period?


Business Offering Hoteliers are working on adapting their business offering considering that the travel consumer behavior and needs have changed after the pandemic.

As expected across regions, brand and organization types, hotel executives reported updating their hygiene standards and practices according to the safety directives issued in their country of operation.

Majority of the hoteliers reported updating their lodging, F&B and meeting offerings as a consequence of the new social distancing requirements. About half reported making changes to their Leisure & Entertainment facilities, while only 2% have not yet done any changes to their business offering. Nevertheless, it is important to note that not all surveyed hotels have F&B, Meetings spaces or Leisure facilities.

Q: What changes will you consider for your offering (service concept, facilities)?

Multiple answers


Inventory

Digging deeper into the offering aspect, the study discussed inventory adjustments for the various offering categories. Hotel executives across regions, brand and organization types were largely optimistic, as the majority have reported plans for temporary adjustment in inventory, especially in F&B and event facilities and understandably to a less degree in room inventory.

Only about 10% of hoteliers are considering permanent adjustments to their inventory, which is an encouraging result illustrating the optimism of hoteliers regarding recovery.

Q: Would you adjust your business inventory?


Feeder Markets

International travel restrictions, anxiety of traveling far away from home (due to the pandemic), and travel budget cuts are some of the drivers behind the changes in the traveler behavior post pandemic. Naturally, hotel executives focus would shift to the local and domestic market Nevertheless, many hoteliers will maintain the same level of attention to international markets.

87%

50%

15%

7%

39%

18%

4%

8%

28%

1%

3%

21%

0.5%

0.5%

18%

Local & Domestic

Regional

International

Feeder Market Focus

Very High High Same as before Low Very Low

Q: How likely are you to increase your focus on the following Feeder Markets?


Looking into the feeder market focus by region, it is clear that there are variations especially in the interest in International markets.

MEA and APAC are more likely to continue to attract business from international source markets, while the Americas and Europe will rely mainly on their local and regional base.


Segmentation

Segmentation is key to understand future demand. The survey asked hoteliers about the market segments they would focus their attention on during recovery. Quite rightly, the immediate focus would be on “non-contracted” and “local” leisure and corporate segments, mainly because they will form the base of the upcoming short and midterm demand compared to other segments, also, they are easier to sell using existing distribution channels.

Hoteliers are focusing, to a less extent, on long term segments that include residential, leisure groups and MICE, local that is, as they form a safe business base, albeit for specific inventory types. The interest in medical tourism and airline crew segments is generally low and usually related to local market opportunities such as proximity to hospitals or airports for instance. The least considered segments by hotel executives are, quite understandably, the international corporate and MICE segments, because business travel is going to take long to return to normal, according to experts.

From a regional point of view, there are quite significant differences in segment consideration: hoteliers in the Americas have greater interest in leisure individual and leisure group segments compared to other regions. While hoteliers in MEA and APAC are more interested in non-contracted segments than their counterparts in other regions. The other specificity of MEA and APAC is the higher focus on international segments (Corporate and MICE) as mentioned before.

Staycation, on the other hand, are of interest in all regions, however not with the same level of enthusiasm. Hoteliers in the Americas will focus on staycations more than their counterparts in other regions.

Q: How likely are you to increase your focus on the following Business Mix categories?


Pricing Structure

An increasing number of hotel executives are considering dynamic contracting in their recovery plans. This is followed by a focus on length of stay offers to drive demand.

Interestingly, Customer-centric and Attribute-based pricing are strongly emerging as pricing methods to be adopted by hoteliers, however, both require a solid technology backbone for distribution.

Overall, non-refundable offers never had much interest, however, some hotel executives said they may look into that as a way to drive demand since guests would be expecting to see flexible policies in the post-pandemic era.

Advance purchase offers are somewhat appealing to hotel executives; however, this raises the question of the booking window: how long in advance is considered an “advance purchase”?

Looking at the pricing focus from a brand type point of view, similar trends to those in the overall, however, with a bit of a variation. Dynamic contracting is definitely on the radar of International groups but regional and local brands are not far behind, which begs the question about the use of static contracting rates in a post-pandemic world.

The focus on customer-centric & attribute-based pricing is also something all brand types agree to. This is probably due to the fact that both methods are being applied widely as a pricing practice, not just by international groups, it is seen as an accessible opportunity by local and regional brands as well, thanks to their increasingly affordable technology.

16%

22%

26%

26%

28%

31%

51%

20%

26%

28%

40%

42%

39%

28%

25%

31%

33%

29%

27%

25%

18%

26%

14%

9%

4%

2%

4%

2%

12%

6%

3%

1%

2%

Non-refundable cancellation policy offers

Advance purchase offers

Opaque offers

Attribute-based pricing

Customer-centric pricing

Length-of-Stay offers

Dynamic contracting offers

Highly likely Likely Same as before Unlikely Highly unlikely

International Local

25%

29%

26%

16%

24%

36%

39%

14%

18%

19%

48%

48%

32%

29%

29%

36%

41%

28%

28%

25%

29%

29%

11%

11%

8%

7%

4%

4%

7%

4%

Non-refundablecancellation policy…

Advance purchaseoffers

Opaque offers


Customer-centricpricing


Dynamic contractingoffers

22%

22%

31%

31%

24%

39%

47%

17%

22%

28%

41%

61%

28%

25%

28%

36%

39%

25%

12%

33%

22%

17%

8%

3%

3%

3%

17%

11%

3%

3%

Non-refundablecancellation policy…

Advance purchaseoffers

Opaque offers


Customer-centricpricing



16%

22%

26%

26%

28%

31%

51%

20%

26%

28%

40%

42%

39%

28%

25%

31%

33%

29%

27%

25%

18%

26%

14%

9%

4%

2%

4%

2%

12%

6%

3%

1%

2%

Non-refundablecancellation policy offers

Advance purchase offers

Opaque offers


Customer-centric pricing



Regional

Q: How likely are you to increase your focus on the following categories related to your

Pricing Structure?


Distribution

Following the explosion in online shopping during lockdown, many hotel executives are increasing their focus on online distribution channels, however quite naturally, their primary focus remains on their own online channels.

The main priority for most hotel executives in their recovery planning is to increase room distribution – which aligns with the focus on Non-contracted segment and dynamic pricing. That translates into focus on distributing on own online channels, of course, but also via 3rd parties

To a less degree, hoteliers have also expressed high interest in online direct distribution for F&B and ancillary revenue streams, while the use of 3rd parties is more likely to remain as it was before the pandemic.

.

Q: How likely are you to increase your focus on the following categories related to your

Distribution?


Sales & Marketing

Looking at the promotion aspect, the study discussed the importance of loyalty programs in the recovery plans and other key Sales & Marketing functions.

It was somewhat surprising to find from 13% of the hotel executives that they do not have a loyalty program in their hotels, albeit a few of those work in international and regional brands. As an industry known fact, loyalty programs are not just about loyalty, it’s about the system.

Therefore, it could be a concern if these hotels do not have a CRM system, meaning limited or no guest data, and as a result, might not be able to embrace customer-centric pricing as efficiently as others.

For the hotels who have a loyalty program in place, the study highlights a few interesting trends: the reliance on loyalty programs in the forthcoming recovery phase varies by brand types and, to a less degree, by region and organization type.

The importance of having a loyalty program is that it aligns with the approach to adopt customer centric pricing and confirms the 1-on-1 Marketing approach highlighted earlier.

13%

63%

23%

11%

3%

We don’t have a loyalty program

Significantly Somewhat significant Very little None whatsoever

Loyalty program Focus

63% 58%

80%

50%

71% 70%

38%56% 60%

69%

23% 32%

10%

22%

16% 18%

47%19%

24%21%

11% 7% 10%

19%

13% 11%9%

19%12%

10%

3% 3%9%

1% 6% 6% 4%

Total Americas APAC* Europe MEA International Regional Local Multi-property Singleproperty

Region Brand Organisation

Loyalty program Focus

Significantly Somewhat significant Very little None whatsoever

Q: To what extend will your customer Loyalty program play a role in your post COVID and

recovery planning?


The survey also covered questions to understand which Sales & Marketing functions would in focus for the recovery action plans. In a nutshell, post pandemic key orientations and activities will revolve around: digital marketing, partnerships and PR. These options would optimize resources whilst keeping staffing at lowest levels, in addition, they are ROI measurable, especially partnership.

On the other hand, Direct sales activities involving travel and trade shows are not on the radar in the same proportions. These are probably seen as non-safe activities (yet!) for the employee in addition to their limited expected ROI due to a potentially lower response from the target audiences.

Q: How likely are you to increase your focus on the following Sales & Marketing functions?


Technology

No business or action plan is complete if resources are not explored. The study results are quite encouraging since they suggest that the interest in technology investment is on the rise. The majority of hoteliers across regions, brand and organization types reported an increase in focus on technology tools, except for the Channel Manager, which is already a widely adopted technology.

Digital marketing tools, Website functionalities and IBE, to which we could add system integration, relate the previously highlighted focus on online distribution of the various revenue streams and attribute-based pricing. The interest in Upsell and RMS tools also contributes to the dynamic pricing and non-contracted segment focus.

Hotel executives who are interested in CRM and Data/BI tools are aligning that with their focus on loyalty programs, customer-centric and attribute-based pricing strategies. Lastly, the lower interest in Channel Manager is most likely impacted by the higher percentage of executives from hotel groups – who already have a channel manager.

Q: How likely are you to increase your focus on the following technology tools?


Staffing Structure

Finally, on the resource’s discussion and from a staffing point of view, the consensus amongst hoteliers is that nothing will ever be the same.

CHANGE OR STATUS QUO?

The functions that will not see much change in staffing are asset management roles followed by executive management, distribution, training & development, data analytics and communication. While the highest change by far is actually within sales and marketing roles, though both in very different ways.

ONSITE OR REMOTE WORKING?

Commercial functions such as revenue, sales, marketing, data analytics, communication, and distribution are considered eligible for offsite/remote working by many hoteliers, that is depending on the function. Operations, executive office, and meetings & events teams, even reservation, would not have the same flexibility to work remotely. Interestingly, training & development stays close to the operation (only 16% of the executives saw an opportunity for remote working).

CLUSTER AND OUTSOURCING

Clustering and centralizing are well known practices for optimizing costs & improving efficiency, the same is true with outsourcing, though this is not a consensus. Unlike their counterparts in other regions, MEA hoteliers are seeing opportunities in outsourcing commercial functions, operational roles and training & development. Revenue, sales, marketing and distribution are also considered as potentials for clusters (in certain functions), as are communication and data analytics, however in a lower proportion. Operations, executive office, and meetings & events teams would not be clustered as much. The need of proximity to the guest to ensure quality of the experience is the focus, quite logically. Only 20% of the hotel executives consider clustering the reservations department. Technology limitations could explain this figure.

No Change Offsite/Remote working

66%

49%

49%

44%

44%

41%

39%

38%

38%

34%

25%

21%

Asset Management


Distribution

Training & Development

Data Analytics

Communication

Reservation

Meetings and Events


Operations

Marketing

Sales

No change

12%

15%

31%

16%

32%

33%

20%

10%

37%

6%

37%

40%

Offsite / Remote working

11%

15%

25%

20%

19%

21%

20%

15%

32%

15%

28%

32%

Cluster

1%

1%

4%

8%

5%

7%

7%

7%

4%

6%

7%

5%

Outsource

15%

29%

13%

25%

9%

19%

38%

41%

16%

54%

27%

43%

Decrease staff

1%

1%

4%

10%

8%

4%

4%

4%

4%

2%

9%

6%

Increase staffCluster Outsource Decrease staff Increase staff

Q: How would you reconsider your Staffing structure?


STAFF INCREASES

Of course, staff increases are minimal in a post-pandemic recovery scenario, however, even considering increasing staff in certain functions represents a mind shift that is interesting to highlight. Specifically, in marketing, data and training functions (all often have limited headcounts) are seen as of an increasing strategical importance.

STAFF DECREASES

The anticipation of soft occupancy levels in general for the current and upcoming period results in plans to decrease staffing of operational departments, meetings & events and reservations. Small teams such in marketing, distribution or revenue functions are not expected to suffer from major cuts, but there might be clustering opportunities. The situation of sales roles, though, shows a major shift. As highlighted earlier, the importance of marketing (particularly digital marketing) and distribution is growing. 43% of hoteliers are anticipating/considering decreasing sales staff, while only 32% would consider clustering sales. This raises crucial questions around the role sales will play in post-pandemic recovery plans: What is the sales teams’ scope of work? responsibilities? where do they fit between marketing and distribution? So, are sales teams ready and trained for the shift?

No Change Offsite/Remote working

66%

49%

49%

44%

44%

41%

39%

38%

38%

34%

25%

21%

Asset Management


Distribution


Data Analytics

Communication

Reservation

Meetings and Events


Operations

Marketing

Sales

No change

12%

15%

31%

16%

32%

33%

20%

10%

37%

6%

37%

40%


11%

15%

25%

20%

19%

21%

20%

15%

32%

15%

28%

32%

Cluster

1%

1%

4%

8%

5%

7%

7%

7%

4%

6%

7%

5%

Outsource

15%

29%

13%

25%

9%

19%

38%

41%

16%

54%

27%

43%

Decrease staff

1%

1%

4%

10%

8%

4%

4%

4%

4%

2%

9%

6%

Increase staffCluster Outsource Decrease staff Increase staffNo Change Offsite/Remote working

66%

49%

49%

44%

44%

41%

39%

38%

38%

34%

25%

21%

Asset Management


Distribution


Data Analytics

Communication

Reservation

Meetings and Events


Operations

Marketing

Sales

No change

12%

15%

31%

16%

32%

33%

20%

10%

37%

6%

37%

40%


11%

15%

25%

20%

19%

21%

20%

15%

32%

15%

28%

32%

Cluster

1%

1%

4%

8%

5%

7%

7%

7%

4%

6%

7%

5%

Outsource

15%

29%

13%

25%

9%

19%

38%

41%

16%

54%

27%

43%

Decrease staff

1%

1%

4%

10%

8%

4%

4%

4%

4%

2%

9%

6%

Increase staffCluster Outsource Decrease staff Increase staff


TAKEAWAYS

BUSINESS PLANNING

Majority of hoteliers are considering a midterm horizon in their post-pandemic recovery plans (up to 2022). About one in five executives from international brands are even considering longer term plans (up to 2023).

TECHNOLOGY

Interest for technology aligns with the focus on online marketing and tools (i.e. digital marketing, CRM, data/BI, RM etc.).

PRICING STRUCTURE

Hoteliers focus is on dynamic pricing, length of stay offers, customer-centric and attribute-based pricing. Non-refundable rate has little to no interest.

SALES & MARKETING

Majority of hoteliers will increase their focus on loyalty programs in their planning. This aligns with the customer centric pricing approach and confirms the 1-on-1 marketing approach. Digital marketing, partnerships and PR are at the top of the sales & marketing activities. Trade fairs and road shows are at the bottom.

STAFFING STRUCTURE

Commercial roles are becoming increasingly eligible for remote working and clustering, while operational roles remain on property with a close focus on guest experience. Outsourcing is not seen as an opportunity, although some MEA executives would consider it. Many roles are threatened by redundancies, and that includes Sales roles.

OFFERING

Considering the change in behavior and needs of the travel consumer, hotel executives are working on changing their business offering (especially in aspects related to safety). Inventory may only change as a temporary measure, most likely as a response to social distancing.

FEEDER MARKETS

Travelers’ anxiety of traveling far away from home, budget cuts and the still-in-place travel restrictions are some of the reasons that are driving hoteliers to increase their focus on the local and domestic markets.

DISTRIBUTION

Overall, online distribution is the focus for all revenue streams, however the primary focus remains on direct online channels. The main objective is to sell rooms (as opposed to F&B and other ancillaries), which aligns with the focus on non-contracted segment and dynamic pricing.

SEGMENTATION

Anticipating a slow return of international corporate and MICE segments is adding more reasons for hoteliers to focus on domestic and local markets. That translates into a focus on staycation, leisure individuals, followed by local corporate segments. Many hoteliers are also interested in non-contracted segments, but as a distribution opportunity more than a direct sale one.

“This pandemic is certainly one of the most serious crises that impacted all aspects of life and business, and travel and hospitality sector in particular. Hoteliers must adjust their planning to meet new market needs in order to seize new business opportunities. This study shows encouraging signs of recovery as passionate hoteliers are preparing to make the needful to reinvent themselves and the industry for a post-pandemic return of business.”

Bob Gilbert, HSMAI


ABOUT THE AUTHORS

About Insight Out Consultancy

Founded in 2008, Insight Out Consultancy DMCC is a holistic commercial advisory based in UAE with a branch in Canada that enables hospitality, travel, and tourism brands to overcome their business challenges through data-driven and tailor-made solutions created and implemented by a diverse team of regional experts. With an incredible wealth of Middle East and international travel experience, our team of experts is innately connected to the pulse of the industry. Through our holistic approach, we create innovative solutions to improve the core commercial performance of hospitality and tourism businesses. By completing over 300 projects successfully, we have honed an approach that assesses processes, people, and systems to identify the key areas of focus for any project. No two projects are ever the same. Insight | Out leads and manages HSMAI activities in the Middle East & Africa region.

Shadi Kaddoura

Senior Manager – Market Research & Insights | Insight Out Consultancy

Cristina Polo

Senior Consultant - Commercial Advisory | Insight Out Consultancy

Steering Committee Member | HSMAI Middle East

http://linkedin.com/company/insight-out-consultancy

http://insightout-me.com/

HOSPITALITY POST PANDEMI P - global.hsmai.org · hospitality sales, marketing and revenue...

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