Hospitality Marketing: Roadmap-To-Recovery Post-Pandemic

Hospitality Marketing: Roadmap-To-Recovery Post-Pandemic

There is no doubt we are living and leading through unprecedented times – a time when the travel and hospitality industries are forging unchartered territories; where in just a few short months, the entire industry was brought to its knees with the global pandemic of COVID-19.

Generally during economic downturns, we have history to revisit for insights and lessons learned that help us develop strategic playbooks to navigate these slumps, but with our current situation, there is NO similar moment in time to look back on, leaving us fueled with anxiety, worry and the big question – what do we do now?

These times call for our hospitality and travel leaders to be “the glass is half full” leaders. What we do know for CERTAIN is this – what goes up, must come down; and what goes down, must come up. It’s a proven concept across every financial index. For example, pictured below is a graph from Skift showcasing U.S. Hotel Revenue per Available Room (RevPar) over the course of 10 years from 2007-2017 including what we thought then were unprecedented times – the global recession from 2007-09.

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For those of us leading through that global recession where the ADR [Average Daily Rate] hit an all-time low, no one would have predicted the rebound and pace of growth that ensued. Therefore, we have nothing but “ups” coming our way and together we will be writing our own chapter in the history books.  How quickly we get there is the trillion-dollar question.

MOVING UP

There will be a recovery and the hospitality and travel industry must be ready. No one has a crystal ball that provides the answers we seek, therefore, we need to recognize out-of-the-gate that our standards and normal ways of conducting and managing our business are going to change drastically, and that they will continue to evolve with the recovering economy and shifts in consumer behavior.

Now is the time for out-of-box thinking, industry innovation and courage to push ourselves to accept approaches that feel imperfect or contrary to past experiences. We must also have patience and do what we can to influence consumer behavior as there is always a psychological shift in consumers post-recession.

The psychology of consumers during economic downturns is an absolute MUST for our industry to understand, as post-recession consumers don’t emerge the same as they entered.  What worked before, may not work moving forward. In post-recession, the outcome is always a “new normal” – a fundamental and permanent change in consumer behavior.  The more we understand our “new normal” in advance and the opportunities it can create for our industry, the faster we will recover.

THE PATH TO RECOVERY

While no two businesses are alike, there is a construct (The Recovery Roadmap below) that can be applied to any operation or discipline to kick start the recovery process and get your doors back open. Understandably, the thought of where do we go from here can be overwhelming. A simple, focused process is the way to make sense out of chaos and uncertainty. It is a guide your team can navigate through easily, and by leveraging it, you will get your operation back on track quickly all while scoring some leadership brownie points with your no-nonsense, on-point execution.

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FIGURE 1. THE RECOVERY ROADMAP

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THE MARKETING RECOVERY ROADMAP

As a hospitality marketing executive, I know examples are incredibly helpful, so I have created a topline guide of what this could look like from a marketing operations perspective in the following table.

Please note, this is a generalized guide and may not be complete based on each individual operation’s unique situation.

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MARKETING CONSIDERATIONS FOR THE “NEW NORMAL”

Below are considerations worthy of sharing to get your marketing back on track while resetting and evolving approaches to meet the “new normal”.  Many of these considerations come from tested applications during my time navigating 9/11 and the global recession in the early 2000’s. Some come from my long-standing marketing experience leading global hospitality organizations; others from consumer behavior amid this pandemic.

MARKETING BUDGETS #TRIAGENOTSABOTAGE

DON’T cut your marketing and sales budget completely like so many do – this is a mistake and it can undermine your future performance. Instead, contain your costs by focusing on what works and cut out what doesn’t. This is “triage” not “sabotage”. Save money for future promotions and focus efforts on no-cost to minimal cost digital channels including organic approaches. Adjust your marketing budget proportionally to your revamped operating budget and forecasts. Make sure you account for incremental promotional expenses that align with your re-launch efforts and timeline. Not all re-openings are the same – some may start soft and grow capacity over time; others may focus on re-opening at full capacity. Whatever the approach, the marketing budget needs to align.

REMAIN RELEVANT & UP TO DATE

Update your website and digital channels in real-time reflecting your current status and provide regular updates – don’t go dark.

COMMUNICATE

DON’T stop communicating with your customers – with many locations on quarantine, you have your customer’s undivided attention. There are less distractions in their daily routines now and they are hyper-focused on mobile and digital channels. Remember how you fulfill a need of theirs; do what you can to fulfill it virtually instead of physically. Keep your brand relevant, desirable and top of mind – even if your doors are temporarily closed.

Develop a monthly content calendar that provides updates and information for your consumers – use your digital channels like social media and email to keep your consumers informed. Your content should be relevant, truthful, tasteful and empathetic considering the current circumstances. It is OK to use humor if it is tasteful, on-brand and resonates well with your target audience. It is paramount to consider content that answers how your brand aligns with your target consumer’s beliefs, desires and values, especially now more than ever. Business transparency is also key.

LOYALTY

It has been written time and time again that your biggest asset as a hotel business is your loyal customer base. They too are feeling the burden of these unprecedented times. Remain engaged and keep reminding them why they love you so much. If your loyalty starts to slip now, it will be that much harder to keep pace with our industry rebound and you’ll likely lose market share to your competitors.

ENGAGE & LEARN

Engage with your loyal customer base by implementing a survey to intimately understand your customers during this down time and economic downturn. Focus on understanding their perceptions, priorities, needs, motivations and expectations regarding future visits. Also seek to understand any specific changes in behavior that can affect your operation, your product offerings, your strategies and the guest journey. Companies who understand the evolving behaviors and consumption patterns of their consumers [during/post-pandemic] can pro-actively fine-tune their strategies and be ahead of the game.

BE YOUR CUSTOMER

Now more than ever you need to put yourself in your customer’s shoes – you should always have a customer lens on anything you do and use that as the basis for all your marketing and product decisions moving forward.

BECOME A RECESSION MARKETING EXPERT

Read, learn and leverage! There are many publications and educational journals that have insights on how to navigate through a recession/economic downturn.  There is a FANTASTIC article called “How to Market in a Downturn” by John Quelch and Katherine Jocz published by Harvard Business Review. It can be found here.

According to Quelch and Jocz, a consumer’s psychology changes in a time of recession. This leads to behavioral modifications including a reduction in spending habits and a new lens on how consumers prioritize future purchases.  The article provides insights into (4) consumer-recession-segments based on emotional/psychological reactions to the economic environment that are worthy enough to share here.

• Slam-on-the-Brakes segment feels most vulnerable and hardest hit financially. This group reduces all types of spending by eliminating, postponing, decreasing, or substituting purchases. Although lower-income consumers typically fall into this segment, anxious higher-income consumers can as well, particularly if health or income circumstances change for the worse.
• Pained-but-Patient consumers tend to be resilient and optimistic about the long term but less confident about the prospects for recovery in the near term or their ability to maintain their standard of living. Like slam-on-the-brakes consumers, they economize in all areas, though less aggressively. They constitute the largest segment and include the great majority of households unscathed by unemployment, representing a wide range of income levels. As news gets worse, pained-but-patient consumers increasingly migrate into the slam-on-the-brakes segment.
• Comfortably Well-off consumers feel secure about their ability to ride out current and future bumps in the economy. They consume at near-prerecession levels, though now they tend to be a little more selective (and less conspicuous) about their purchases. The segment consists primarily of people in the top 5% income bracket. It also includes those who are less wealthy but feel confident about the stability of their finances—the comfortably retired, for example, or investors who got out of the market early or had their money in low-risk investments such as CDs.
• Live-for-Today segment carries on as usual and for the most part remains unconcerned about savings. The consumers in this group respond to the recession mainly by extending their timetables for making major purchases. Typically, urban and younger, they are more likely to rent than to own, and they spend on experiences rather than stuff (with the exception of consumer electronics). They’re unlikely to change their consumption behavior unless they become unemployed.

A MARKET RE-LAUNCH MEANS DUSTING OFF YOUR OLD BUSINESS BOOKS & LEVERAGING THE HECK OUT OF THIS OPPORTUNITY

Refamiliarize yourself with the Product Adoption Curve (you learned this in business school) when building marketing plans around your re-launch or capacity expansion. The Product Adoption Curve is a standard model that reflects who buys your product and when. Sequentially, it contains five distinct customer groups – each characterized by a set of beliefs, motivations, and behaviors.

• Innovators are risk takers who have the resources and desire to try new things, even if they fail. They are 2.5% of your customers.
• Early Adopters are selective about what they start using. They are considered the “one to check in with” for new information and reduce others’ uncertainty about the newness by adopting it.   Early Adopters are 13.5% of your customers.
• Early Majority (34% of your customers) are individuals that take their time before adopting a new idea. They are willing to embrace new as long as they understand how it fits within their lives.
• Late Majority are individuals that adopt in reaction to peer pressure, emerging norms or economic necessity. Most of the uncertainty around an idea must be resolved before they adopt.  They are 34% of your customers.

One can easily argue that a post-pandemic re-launch temporarily resets your position on the Product Adoption Curve to the very beginning. Therefore, your marketing plans should target the “Innovators” out of the gate followed closely by the “Early Adopters”. Understanding where you are along the curve and the differences (especially psychological) between each segment is imperative as campaigns and messaging need to align to be effective.

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A re-launch can also be an amazing opportunity to amplify the fact that you are coming back online better than ever. Use every marketing channel available to you from a press release to email marketing, social media and beyond.  

This is also the time to share any new product offering(s), promotions, specials, etc that double-down on the insights you gained through your surveys (explained in the Engage & Learn section) and how you responded to these newly identified needs. For example, you may have learned that your customers are incredibly concerned with sanitation and as a result you purchased in-room sanitation devices like UVee that kills 99.9% of all bacteria from mobile phones to remote controls and beyond. It’s new information like this that can help influence consumers and stimulate future bookings.

BE PROACTIVE

Proactivity is the name of the game – you are in a position to start building pent-up-demand for your market re-entry and re-opening. Create a workback schedule for your re-launch and give yourself plenty of time to make a lasting impression through a well-designed launch plan. Lucky for us, the world will be suffering from cabin fever – a HUGE advantage for our industry – therefore use this time now to creatively develop campaigns that get the consumer coming back to you and not your competition.

Be proactive with SEO. Think about how consumer behavior will change with search terms when researching travel in our “new normal” post-pandemic. With airline destinations and property destinations coming back online at different times, the travel journey for “innovators” and “early adopters” may be fractured and that puts the onus on the customer for additional online research. Think about it – if you were ready for your first trip – what would you be searching for? Possibly which hotels are now open within a certain destination? Or what are the hotel sanitation methods? Use your consumer research to help you determine what content you can own on-line to better help with your organic search results.

STRATEGIC ALLIANCES

Hospitality is not the only industry affected by this pandemic – everyone is affected, and everyone wants to get back to normalcy as quickly as possible. Therefore, there is tremendous opportunity to forge alliances in ways that can innovate our industry. This is not business as usual, so be as creative as possible with your partners and provide compelling offers together that answer the psychological needs of the consumer. For example, what if your hotel partnered with Ecolab and together created a Sanitization Certification that validates that your rooms are 100% sanitized? Or offer co-branded trial size disinfectants in room to alleviate any concerns of germs. This field is wide open, and it will be interesting to see the new collaborations that take place.

GLOBAL INSIGHTS

Stay informed on global industry happenings and pay attention to geographical areas further along on the normalcy curve, like China. These insights can be incredibly helpful by showcasing emerging trends and consumer travel behavior.

COMMUNITY-MINDED IN PANDEMIC TIMES

Create community goodwill by donating resources, rooms, equipment, cleaners, supplies, food and beverage, conference space – whatever you have in your arsenal. Constantly think outside the box. While your core business is a hotel – what else can you be doing with your property to support your community? You have an amazing asset on your hands – who could use it?  Some examples include creating a safe sanctuary for families to be together; utilizing conference rooms to help train additional medical personal; or providing resting rooms or dining facilities for first responders. Assess the needs in your community to fine-tune your approaches and amplify your goodwill.

IN CONCLUSION

Everyone’s situation will be uniquely their own-but don’t think you are in this alone or need to be “the person” behind the brilliant plan that will recapture all lost revenues. We are a global industry with immense muscle power and brain power – we have colleagues working hard all over the world – each day testing uncharted waters and learning something new. Some are ahead of us from a recovery standpoint, while others are just beginning to feel the blunt forces.

Now is the time for collaboration, education and shared learnings. Now is the time to ask for help. Now is the time to seek guidance from experienced hospitality leaders especially those who are disruptive experts and see opportunities ahead. By unifying and working together, we will speed up our industry’s timely recovery.  

Stay safe everyone!

[This article originally appeared on The Wieland Group’s blog page on March 26, 2020: https://bit.ly/3bFbbY7 ]