Coronavirus and economic uncertainty: Technology strategies hoteliers should evaluate to weather the storm

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From the blog of PhocusWire:

Some macro events are impossible to predict.

As 2019 ended, marking the longest bull run in the history of the S&P 500, we entered 2020 with ever-increasing speculation as to how long the good times would last. 

Over a decade of unprecedented performance and optimism has naturally given way to broad-based economic uncertainty and a fragile capital markets environment in recent years, with a snowballing view that the music will eventually stop. 

Enter the COVID-19 coronavirus.

The health of the hospitality sector is inherently more correlated with the global economy than other industries. Consequently, tactics and strategies aimed at mitigating the impact of a downturn are frequent boardroom discussion topics. 

As hospitality organizations globally embarked on 2020 planning, I can guarantee that the topic of a global viral outbreak was never on the agenda. 

With COVID-19 now officially declared a global pandemic by the World Health Organization and President Trump imposing a ban on travel from 26 European countries to the United States, the impact of the virus on the hospitality segment is undeniable and significant. Get a dose of digital travel in your inbox each day

The ultimate extent and duration of the outbreak is still unknown, but with hoteliers scrambling to find ways to deal with plummeting occupancy rates and the lowest RevPAR forecast since 2009, what steps can hoteliers be taking to weather the storm?

As operational budgets come under increasing scrutiny and hoteliers are forced to cut spending in various areas, forward-thinking organizations should consider increasing investment in strategic technology platforms that drive ROI in the form of operational efficiency, cost savings and revenue generation. 

Two emerging technology categories are discussed below, which deliver a value proposition with increasing resonance in a degrading economic environment: 

Streamline operations with mobile-first platforms to drive efficiency and cost-savings 

Hotel operations have evolved with non-desk workers across functional groups now relying on their mobile devices as the single source of truth to execute daily tasks (goodbye, walkie talkies!).

A new wave of mobile-first technologies has emerged – enabling real-time coordination, communication and automation of tedious manual tasks. 

Architected extensibility as a core virtue to overcome the historical integration woes that have plagued hospitality tech for years, the emerging leaders in this category are displacing legacy providers in the “service optimization” arena and are establishing a next-gen “distributed workforce neural network.”

As management teams struggle with the deluge of problems that COVID-19 is bringing to the forefront of daily hotel operations, hoteliers would be wise to consider a solution in this category to ensure superior guest satisfaction is delivered consistently, at scale, with high efficiency.

Leverage personalization to drive incremental revenue across the guest journey 

We’re amid a transition from the information age to the intelligence age – with more data available to organizations across all industries of the global economy than ever before.

Business buyers aren’t asking for more data, they’re demanding actionable insights. 

Personalization has long been a strategic area of marketing tech, evolving from simple A/B testing to rules-based recommendations to multivariate algorithmic approaches enabling dynamic individualization.

However, hoteliers have been relative laggards in leveraging their data to drive personalization across the guest journey.

With digital channels now the dominant means of booking hotels, the hospitality tech segment benefits from a plethora of relevant information regarding perceived guest demographics, behavior and intent – a single online booking transaction kicks off more than 50 highly relevant data points.

While hoteliers are inherently limited with regards to the variability in terms of room type and price that they can present to a given guest, ancillary goods, services and experiences offered by hoteliers are playing an increasingly critical role in delivering a distinct, more personalized experience to a given guest.

Automated, personalized upselling has emerged as a category with undeniable strategic resonance and a recession-resilient value proposition. 

Leading vendors in this space ingest relevant booking data to discern perceived guest characteristics and then leverage predictive algorithms to deliver a highly personalized combination of goods and services with high likelihood of conversion. 

These platforms get smarter over time, cultivating data-driven conviction in performance with each incremental hotel they engage with. 

As global travel wanes amidst COVID-19, deploying innovative platforms that deliver tangible ROI through cost-savings, operational efficiency and incremental revenue generation are an excellent way for hoteliers to mitigate the impact of declining RevPAR, fight back against degrading occupancy rates and weather the impending storm.

About the authors…
Matt Melymuka is the co-founder and partner of PeakSpan Capital and Andrew Bartusiak is a senior analyst with PeakSpan Capital.

Source: Coronavirus and economic uncertainty: Technology strategies hoteliers should evaluate to weather the storm

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