Hotel owners and operators need to focus on building traveler trust to get to the other side of an industry recovery, no matter the associated costs.
The hotel industry plans to return from coronavirus shutdowns with heightened cleaning practices and lower capacity levels in public spaces. But it isn’t quite clear if guests will readily accept hospitality’s new normal.
The American Hotel & Lodging Association launched late last month “Stay Safe,” a new cleaning and workplace protocol for the hotel industry in light of coronavirus. The initiative, backed by global hotel companies like Hilton, IHG, and Marriott, calls for enhanced cleaning standards in rooms and public areas. New cleaning products and social distancing are key measures. The move comes as individual brands have launched their own heightened cleaning standard, like Hilton’s partnership with the maker of Lysol and the Mayo Clinic.
“Hotels have always had rigorous standards for cleaning and safety,” AHLA President and CEO Chip Rogers said in a statement. “With Safe Stay we are enhancing these standards to help create peace of mind. When travel resumes, hotels will be ready to safely welcome back the traveling public.”
Along with the Centers for Disease Control and Prevention guidelines on coronavirus self-protection like wearing a mask and gloves, the AHLA calls on hotel operators to use cleaning products with a greater concentration of bacteria-killing ingredients. Public areas and high-touch areas like check-in desks and elevators should be cleaned frequently, and the industry group advises housekeeping staff to avoid entering a guest room during a stay unless requested by the guest.
Interactions at check-in, food and beverage, and other venues should practice social distancing guidelines. Seating should be arranged to enable at least six feet of separation between guests, according to the AHLA. But the capacity reductions are likely to eat into already fragile profit margins of normally high-touch divisions within a hotel’s operation.
A recent Bernstein research analysis of occupancy rates required to financially break even at U.S. hotel brands during the downturn assumed food and beverage and spa facilities will operate at a 20 percent loss. U.S. hotel profits cratered to an average 2 percent loss across the industry in March as governments enacted coronavirus shelter-in-place orders, according to STR. Performance is expected to be even worse in April.
“The long and short of it is, at the moment, we don’t know what the tolerance level is from a guest expectation standpoint,” Cornell School of Hotel Administration Dean Kate Walsh said. “What I think the AHLA and all the brands are doing is to say, ‘We want to convey trust that we are offering a safe product that will keep you safe.’ That brand promise is going to be essential to building trust and bringing the traveler back.”
The hospitality industry is known for its personalization and human connection and conveying that in a socially distant manner could be antithetical to what compels someone to book a stay at a hotel, Walsh said. The guidelines call for reduced crowds in public spaces like hotel bars and pools, something that limits socialization but also revenue.
“Obviously travelers don’t want to come in and feel like they’re in a hospital, but they’ll also look for signals of safety,” Walsh added.
Hotel owners and operators, already struggling from unprecedented declines in revenue per room and occupancy, can expect their own post-pandemic shift with added costs in keeping a hotel safe. New cleaning products and staff trainings will arrive at a time when many operators are already struggling to make mortgage payments. At the same time, some costs could be saved by the reduced housekeeping frequency during a stay, Walsh said.
But building traveler trust is the first step in an expected long road to hotel recovery.
“That’s the business model we have to figure out in a value proposition,” Walsh said. “It’s an issue and one we’ll have to figure out as we reopen. Everyone has to help one another as partners to get to the other side.”
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Photo credit: The American Hotel & Lodging Association released guidelines for hotels to reopen with lower density formats and tougher cleaning standards in light of coronavirus. CC0 Public Domain / PxHere