COVID-19 has smashed into the global economy like a rogue asteroid. And it has left a crater in the travel industry. However, as the dust settles, travelers will soon emerge from the wreckage and start traveling again.
When the economy does turn back on, the world won’t go back to business as usual. Even when demand is restored, the aftermath of COVID will linger and weigh on the decisions travelers make.
Luckily, there are ways to prepare for higher hotel profit in a post-COVID economy. Here are some steps hoteliers can take now in order to thrive when the economy turns back on.
With the economy screeching to a halt, hoteliers have had no choice but to furlough workers and let some employees go. The American Hotel & Lodging Association and the U.S. Travel Association recently estimated that hoteliers either have or plan to eliminate 1 million hotel jobs.
Restoring those jobs will require delicacy. As travel resumes, it’s the perfect opportunity to strategically fold employees back into hotel positions.
Wondering how?
Start by poring over hotel labor data. Employees are what greases the wheels in any hotel or resort. But some areas of the machine need more (or less) lubrication than others. By looking at hotel labor metrics, hoteliers can pin down which positions are most urgent.
Start by comparing total labor costs to total revenue. From there, dive into more detailed labor spending metrics, such as:
By seeing how labor compares to the money coming in, hoteliers can set up a rehiring plan based on profit.
COVID has left droves of people homebound, and it’s resulting in higher internet use than ever. For hoteliers, it’s a prime opportunity to build their online presence and solidify their brands. Hoteliers can prepare now by taking steps to increase their hotel’s digital presence:
Remember, people will be wary of travel at first. Hoteliers can use online content and promotions to reassure travelers that they’re in safe hands. By solidifying their marketing foothold now, hoteliers can place their brand at the forefront of customers’ minds when they decide to travel more frequently in the future.
Social distancing has abruptly become the norm. And extra safety precautions will linger on visitors’ minds long into the future. Hoteliers can use the current pause in travel to prepare spaces to coincide with these new priorities. Here are a few places to start:
Revenue per available room (RevPAR) has long been the go-to metric for hoteliers. However, economic dry spells expose the flaws of basing a hotel strategy on revenue alone. Now, when revenue is less available, hoteliers have no choice but to focus on overall hotel performance.
How?
To start, hoteliers can maximize operational efficiency by shifting their attention from RevPAR to Gross Operating Profit Per Available Room (GOPPAR). As a profit-focused metric, GOPPAR reveals the inefficiencies running through every operation within a hotel or resort.
For an even deeper look at operations, hoteliers can go a step further and dig into these metrics:
By using this data to streamline operations, hoteliers can recoup costs during revenue dry spells. And they’ll be prepared for profit booms when demand picks up.
Rest assured, travel will make a comeback. The hoteliers who prepare now, dig into hotel benchmarking data and make plans for the new normal will have a sharp competitive edge. And hoteliers who craft a profit-centered hotel performance strategy will have what it takes to navigate the COVID wreckage and power ahead stronger than ever.