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04/28/2020

Hospitality: Now Is the Time to Strike Back Against the Phantom Menace

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Episode II

THE HOSPITALITY INDUSTRY STRIKES BACK

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DISPATCHES FROM THE FRONT LINES

(As of the date of this Dispatch, a great debate ensues among all levels of the government on whether it is appropriate to begin the re-opening of select business sectors in phases.)

IT’S TIME TO FIGHT BACK

In spite of the inherent danger associated with the spread of COVID-19, it is now time for the hospitality industry re-open and strike back against the Phantom Menace. If we do not do so, we may have put our industry and our economy into a nose dive from which we cannot exit. Here are some reasons why we are justified in “striking back:”

1. Skyrocketing Unemployment

The U.S. Labor Department announced 4.4 million more people filed for unemployment benefits last week, after nearly 22 million applied for aid in the previous four weeks. Total unemployment has reached nearly 27 million, by far the largest streak of U.S. job losses on record, and, effectively wiping out all jobs created since the Great Recession in 2008. For the month of April, some economists say the unemployment rate could reach as high as 22 percent. That would be the highest jobless rate since the Great Depression when it reached 25 percent.

2. No Income = No Customers

If this high rate of loss of jobs continues, a large segment of the population will be stretched to the max to make ends meet for several months. This means they will not have disposable income to spend on restaurant dining and vacation travel. By the decree of all U.S. governors’, states have have been closed for more than a month. Although some governors have begun easing restrictions despite warnings from health authorities, by and large re-opening non-essential industries such as the hospitality industry will likely not start until June 2020.

As the nation stands on the precipice of one of the greatest decisions it may ever make, the question looms: Is it wiser to continue to wait for conclusive evidence that there are sufficient measures in place to control the spread of COVID-19, or in June –  under a consolidated and well administrated plan – should we start phased openings of non-essential business to begin our national economic recovery.

D-DAY 2020

The Price of Victory

Some governors have begun the phased reopening of non-essential business, which will if not properly administered, allow  COVID-19 to still lurk in the dark and cost America thousands of more lives. The success of the phased reopening of non-essential businesses rests on our citizenry continuing to observe voluntary social distancing as they start to go back to their normal routines. If they fail to carry-on voluntary social distancing then there is a real risk that a second wave of COVID-19 could flare up with death tolls rapidly rising. Like decision makers responsible for WWII D-Day our governors are rolling the dice. They have made every contingency for success and are hoping for the best outcome.

What’s at Stake

The longer it takes to formulate a consolidated plan and “jump start” the economy, the greater the risk that all manner of small businesses may never reopen. This will have a devasting impact on the economy and the hospitality industry, especially when it comes to restaurants. The phased reopening of non-essential business is going to face numerous challenges, however, if the economy does not reopen by June, the lead time for the massive effort to reboot and resuscitate the economy only gets longer and harder. Based on the potential for throwing the country into the worst “Depression” it has ever seen, it’s logical to continue with a plan to  reopen the economy.

ERADICATING THE FEAR OF COVID-19

Health scares like COVID-19 frighten people. The COVID-19 PANDEMIC has placed a new emphasis on cleaning for hotels and restaurants. Some say that focus should remain long after the current emergency has passed.

As the first phased re-opening of businesses begins, the number one concern of customers will be their safety. The following are some guidelines that can help reduce the fear factor among returning guests.

Kill the Fear of Bugs

Hotels and restaurants have long been overdue for a review of and change in the way they clean. Hotel rooms in particular have been known to resemble an infectious disease lab petri dish. If any good comes out of this pandemic, it will be that the hospitality industry finally gets its act together when it comes to cleanliness.

Proper Preparation Prevents Poor Performance

These five Ps are always useful in a crisis. And, the below “guidelines” are a good way to measure the adequacy of your post-COVID-19 business plan.

  1. Search immediately to locate every possible piece of equipment/devices needed to verify if your guests are carrying COVID-19 before they enter your business premises. You will also need the same materials to regularly verify if your employees have become infected. Obvious right? But have you considered: Every hospital in America is having difficulty securing these very same items? If you have not started to locate these resources, you may already find yourself unable to find supplies until October 2 to protect your guests, your employees and address the Fear Factor.
  2. Purchase: test kits, hand sanitizer and cleaning supplies, temperature reading devices, masks, Playtex gloves, hospital grade disinfectants, and disinfectant dispensers (Fogger dispensers run from $300 to $1,700).
  3. Create re-training programs, manuals and specific instructions on maintaining cleanliness.
  4. Create a new budget. At one point or another what you are able to do (from turning a room to turning a table) will become dependent on and a line item within your budget. The COVID-19 pandemic now makes cleanliness a higher priority in hotel and restaurant budgets.
  5. Check with legal to learn what your liability will be if a guest or employee contracts COVID-19 in your establishment (and possibly dies from it).
  6. Discuss business realities with employees, share plans for the upcoming days, and create an environment of an open and collaborative partnership. Times like these warrant complete trust and transparency.

Weapons of Mass Recovery

There are two major weapons that are in the arsenal to defeat COVID-19. Presently these weapons are not easily available or not yet perfected. The weapons include:

  1. Rapid response test kits that can quickly confirm whether you are carrying COVID-19.
  2. A COVID-19 vaccine: Estimated time to perfection is 16-18 months. This weapon is the only way the entire world will be able to make a full comeback.

IN CLOSING...A FEW SUGGESTIONS

  • After 9/11, hoteliers looked for salvation anywhere they could which often led them to OTAs. Though it helped in the short-term, it came at considerable cost and became a handicap that kneecapped profit in the long run. Today, hoteliers may instead try to slash occupancy rates in order to stir up demand. This too would be foolish. People are not traveling. Instead keep rates at their normal price point so that when travel resumes, your business will remain profitable.
  • Know and stay in touch with your segments and customers and be prepared to welcome them back with great enthusiasm.
  • If you are a restaurant operator do not be afraid to step outside of your box, literally. Many of your colleagues are finding ways to survive by providing creative social distance seating in parking lots and preparing house specialties for sales in supermarkets.

Tune in next week for the final installment of The Day the Hospitality Industry Stood Still: Episode III - The Return of the Guests.

(Read Episode I - The Attack of the Phantom Menace)

    About the Author

    Russ Dazzio is Chairman & Founder of R&R Global Hospitality. During a career that spans over forty years he has earned a reputation as a Hospitality Industry innovator who has successfully navigated numerous economic downturns including, “The Great Recession of 2007”. He serves on the Advisory Boards of; Hospitality Technology Magazine, The UNLV College of Hospitality and The Hardy Group Radical Innovation Award Competition.