The hospitality sector is going to being hit hard, after ‘Brexit’ and the cost of exchange rates, the loss of major airlines and Thomas cook it has had a tough time already and now we are faced with no fly zones, no flights and complete lock down.
Just when you thought business was hard, it just got even harder!
However now is NOT the time to panic, its critical that we focus on what we can do and how we can make good use of the time available to us. How can we implement processes that allow us to communicate on a one to many basis, while providing a good service throughout.
Hopefully the following points will help you to overcome these challenges and look forward with optimism and excitement, remember some of your competitors will not survive this the ones offering 5% commissions or free onboarding this is where quality and loyalty will see you go from strength to strength
1/ Retain your cashflow
It’s critical you help your guests and ensure you do as much as you can. But can you really afford to refund every guest, while not bringing in new business?
Guests with insurance or who have paid via credit card maybe able to claim via these methods, I have also heard my clients who are prioritising guests who are elderly or most at risk by offering them free date transfers.
You could also offer a voucher that then can use within the next 12 months, this gives the guests opportunity to relax once the situation has died down and retained the cash within your business a win win.
It’s critical you consider the business health along with the consumer concerns showing emotion and empathy will help both of you to find a suitable resolution.
2/ Self isolation
The cities must be a scary place to be right now, for those that can work remotely and afford to escape surely must be thinking that 2 to 4 weeks in the countryside with less people in a beautiful cottage or villa would be much nicer place to wait this uncertainty out.
Can you offer discounted rates for 2 or 4 weeks to encourage more people to ‘get away’ from it all, I know if I lived in the city I would want out with my family.
Which properties do you have that offer excellent wifi and working space, these places could be a goldmine right now.
3/ Good financial planning
What is your burn rate? How much of a drop in bookings can your business withstand? Some heavily invested companies like ‘hostmaker’ are way too exposed and this could see many more casualties over the next 4 – 8 weeks. A chase to the bottom on prices never ends well, as well the coronavirus is unprecedented events that affect consumer confidence are not so every business must be well prepared for a drop in revenue.
Take this opportunity to look at your expenses, look at your contracts, how can your business become more nimble. How can it increase spending when strong and operate a leaner and meaner model when business retracts.
Go through your expenses and see what can be dropped immediately, can you reduce working hours, can everyone work from home so their costs are reduced, can anyone take unpaid leave, all temporary measures will ensure your business remains profitable while income has reduced.
4/ Payment Holidays – Loans, Credit Cards & Mortgages
There is no hiding from this your business is going to be impacted the worst, so now is the time to contact any lending companies and request a payment holiday, by reducing your outgoings your business can still trade and you can continue where you left off.
You will be entitled to this if you have a good trading history and it could be the lifeline you need to survive.
Also monitor the latest from the government on grants and subsidies as they will want to keep local businesses trading through this turbulent time.
5/ Government assistance
The government will be implementing a number of measures to support local businesses impacted by this pandemic, with items such as:
- 100% relief on business rates
- 80% government backed loans
- Support for businesses paying tax
So we’ve discussed how we can protect the money you’ve taken while keeping guest loyalty high, we’ve talked about potential booking opportunities and we’ve looked at how you can manage your expenses during tough times.
Lets now look at how we best utilise our time to maximise our bookings once the uncertainty has died down and consumer confidence returns.
6/ Your portfolio of properties – Lets make them the best they have ever been
Mortgage rates are back to the lowest levels they have been, it’s time to take advantage and get owners investing in their property. The market was booming for short term rentals and the competition is high, but prices are still much lower than luxury hotels.
If owners can invest in their property, occupancy is low so maintenance, home improvements, decorating all these things can now take place. Professional photography sessions, the weather has been improving so now is the time to make every home on your bookings look a million dollars. Imagine having your best ever portfolio, with a high demand from consumers, you will be able to charge a premium for your properties during the busiest time.
August, September and October could be the busiest months on record, so MAKE sure you don’t miss out on the amazing bookings that will be happening during that time.
7/ Re-negotiate your contracts
I said early that low margin competitors will be hit the hardest during this time, it’s critical that you look at your burn rate how much of a drop in business can we withstand? How long can we trade for with 0 bookings?
Without a good margin you cannot provide a sustainable business, it’s time like these that people understand that every business charges a fair price to ensure the security of the business and that they can build a war chest that ensures they continue to trade during difficult times.
If you have owners on low percentage contracts, it maybe time to look at how you can increase those margins so when bookings return you can maximise your growth and provide more security to that owner long term. Would an owner want 5 – 10 bookings only pay 10% or would they prefer 30 – 40 bookings and pay 20 – 25%, I think they would prefer the more bookings route!
8/ Just because its what you have always done, it doesn’t mean its the right way or the best way
Workflows, processes and best practise! You hear me talk about this a lot but when business is good people get lazy, they get contented or they simply don’t have the time to analyse.
However if bookings slow down and staff have more time, now is a perfect time to look at all your processes across the business. Analysis, review and reflect.
What is working? What isn’t working? How can we save time here? If an unprecedented event occurs how do we handle our communications with our team and consumers?
If staff cannot get to work how does the business continue trading? Being prepared is the best way to ensure the least damage to your business.
Ensuring your business can run 24/7/365 is vital to scalability and sustainability, utilise what iPro has to offer with automated communications, schedule an email to all guests with active bookings immediately to let them know what steps you have taken as a company to give them peace of mind.
How do you onboard new owners / properties, do you charge a fee for this service, how do your properties get cleaned how can you ensure there is no infection risk from a changeover of guests as remember this virus will be here until next year.
Running a short stay agency has many many factors, use this time wisely to ensure you have strategies in place for all eventualities you have a duty to look after your guests and your owners.
I wish you all the best through these turbulent times and I hope that by implementing the tips above you will have the best opportunity moving forward.