How do you estimate the long-term impact of the pandemic crisis on the hospitality industry in Europe? What will be the effects?
AN: I am not Harry Potter. We have entered an age of unreason. A time when the only true prediction is that no prediction will be true. What we have to change are paradigms. The latest data from the World Tourism Organization (UNWTO) shows a 70% fall in international arrivals for the first eight months of 2020. UNWTO's Panel of Experts predicts a rebound in international tourism by the third quarter of 2021. Some other experts believe that this rebound will only occur in 2022. Personally, I agree with friends of mine, professionals in the industry who are still concerned and do not expect things to go back to normal before 2022. Many countries have strong travel restrictions, the airline industry has still not recovered, many regions impose curfews after a certain hour. Governments are trying – with non-coordinated measures to avoid a complete second shut down which would be terrible for the economy in general. A full recovery will also depend on customer confidence, which is low for the time being. Of course, much also depends on how long the second wave lasts. And again, even if this virus disappears, it is sure to come back again. So we should be more prepared to face such situations.
What are the most challenging aspects of this situation for the hospitality industry?
AN: In my opinion the hotel industry can only emerge as a winner from this crisis. The hospitality industry in general will end up stronger by showing resilience to the situation. Regardless of the negative effects that one can see, there are always new opportunities that arise. Hotels should see their business model differently. Maybe the hotel industry should rethink their size and opt for smaller properties with more personalization.
The uncertainty is making travelers anxious, creating a shift in their perceptions, expectations and behaviour. Winning their confidence will be the most important in order to make them come back. Customers will be hyper-conscious and cleanliness and hygiene will be the foremost criteria in choosing a hotel or a restaurant. Hospitality industry actors (hotels, restaurants, airlines…) will need to redefine and reinforce their measures in hygiene (HACCP) and communicate clearly to customers their hygiene standards. Transparency will be key to winning confidence. Social distancing will not disappear, meaning hotel services should be carried out differently. Fewer tables in restaurants, different ways of organizing seminars (if organized at all, as many companies understood that expensive meetings can be done digitally). This will have a huge impact on meetings, a business that may see a down in coming years
Until frontiers reopen to international travelers, the domestic market will play an important role to help the industry survive. Hotels should do a real effort in their prices and offering to influence local customers to come to their hotel. But there is a huge risk in really putting your rate down too quickly. This may impact your brand image. If customers like your brand, they will come anyhow.
Hotels and restaurants should take a fresh look at their offerings. Breakfast buffet could either be transformed in a nice personalized a la carte service, or the buffet service can be done by waiters behind protective glasses (as I have seen in some hotels). Of course one should consider that keeping the buffet will have a higher cost of staffing. All payments should be done contactless, fitness could be shut down, in-room service as per customer need, pool or spa services can be done only on reservation… Restaurant menus can be downsized to avoid over losses. Update or review the cancellation policies.
Contactless take away, home delivery for restaurants will be one way to think businesses differently. Even gastronomic restaurants could offer special take away menus at attractive prices. The question is: is it better to have a restaurant completely closed or still producing turnover – can staff provide a limited take away or home delivery that can still bring some revenue to cover some fixed costs? The hospitality industry will have to listen to customers and be flexible to respond to new demands that never existed before. Do not put down your marketing budget and your training cost. Do your marketing differently, maybe find new segments of customers. But if you completely cut your marketing budget how will customers know that you still exist? Staff training is key. You can put some online training for example. When business picks up again, you will need trained staff to deliver a qualitative service.
What marketing strategy should be applied during this period, in general?
a) The key words are: communicate, communicate, communicate.
In your communication:
✔️Be timely – Update regularly with all your stakeholders (customers, employees, shareholders, suppliers…)
✔️Be relevant and precise
✔️Be honest and open
✔️Be transparent and consistent
✔️Share as much as you can
✔️Use one voice
✔️Don’t be defensive or aggressive and do not blame others
✔️Be emotionally connected with customers
✔️Address customer needs
b) By all this try to reinforce customer loyalty with your Brand.
c) Help customers if possible.
d) Try to keep the staff morale up. Use the slow period to train, train and train again.
How important is the cost optimization component in the business management strategy at this time? Please mention a few broad lines of optimization as incentives for your webinar.
Cost optimization is a business-focused, continuous discipline to monitor spending and cost reduction linked to organization strategy while maximizing business value. It can include:
✔️Searching for the best price and quality for all business purchases
✔️Standardizing, simplifying and rationalizing platforms, applications, processes and service
✔️Automating and digitalizing IT and business operations
✔️Linking costs to strategy
✔️Having a proactive cost approach
✔️Outsourcing some functions of your business
How and to what extent should the hospitality industry be supported at this time (by the authorities)? What strategy has been applied in Switzerland from this point of view?
Each country had a different approach in helping local businesses and of course the hospitality sector. Even in Europe there was no unitary way, as each country adopted different strategies. For Switzerland some help was focused on:
✔️Giving some loan (with no interest) to companies
✔️Extension of unemployment period
✔️Allowance for losses and gains for employees and independent workers
✔️Help for start-ups
Where do you think Romanian hospitality stands, compared to other European countries?
I have travelled several times to Romania. I was always welcomed very nicely and people were always polite and helpful wherever I have been in hotels or restaurants. If Romania wanted to improve their tourism, they should first invest more in hospitality in general, in hotel schools’ education, in training, in renovating hotels, transport system, standardization in hotels, airport facilities, road conditions. Nevertheless, Romania has a huge potential which is not properly exploited.
What do you consider to be the positive side of this situation generated by the pandemic for the hospitality industry?
This situation should make us revise our values, our way of living. Maybe we should reconsider our urge to always run for more, more and more for ourselves, and be instead more human, more social, more caring. We should consider the service part as being more of our business. Of course we are here to make money, but profit should not be our aim. Our aim is to satisfy customers. The profit is the result of intelligent service profit chain approach, where – if happy employees are loyal, – they will give an added value in the service, and this will increase customer satisfaction and loyalty, in turn impacting our revenue and profit.
source: Trends HRB
A man, with capital M, who has returned to Romania to wholeheartedly give back what he has learned, and not to take away... this is Professor Ray Iunius, a resounding name in the international hospitality industry.
Posted on 19/11/2020