Recession, Resilience, and an Eventual Rise: The Hotel Industry Amid COVID-19
Take a moment, close your eyes, and imagine yourself in the middle of a bustling hotel lobby. You might hear the excited urgings of young kids on a family vacation, tugging parents’ shirt sleeves toward a long awaited destination. Or you might imagine young professionals walking swiftly in a cloud of cell phone chatter and an abundance of briefcases. COVID-19 has understandably been the ultimate challenge for the hotel industry. While hospitality is not a sector estranged from the effects of major recessions, it’s also an industry that normally enjoys a quick recovery. But this time, low occupancy has no end until corporate, family, and international travel begins to come back online.
Tracking the recovery, there are certainly reasons to look toward the future hopefully. Throughout the warmer months, as some cities lifted their social distancing demands, a backlogged demand for leisure travel quickly stimulated the sector, and Southeast coastal markets in the U.S. recovered roughly 70% of their normal weekend occupancy rate through the last weeks of May and the first weeks of June.
But with a couple weeks of chilly mornings foreboding winter’s arrival, and with all health officials warning us against a second wave, those signs of summer demand are more likely to be a blip of reprieve than a steady climb toward normalcy. Without a vaccine, corporations will continue to protect their employees by working remotely, borders will remain hesitant to permit leisure crossings, and most families will agree it’s not quite time to book the next Disney Land getaway.
With the doom and gloom stated plainly, it’s worth shifting gears and focusing on the positive forces at play, the human and market factors that are creating amazing resilience in the hotel sector, and the advancements underway that are offering new reasons to hold our breath for not only a COVID-19 rebound but an eventual rise of the hospitality industry. It is certainly possibly to come out of this stronger, and there are a couple of crucial developments underway that are making that renewed strength all the more likely.
Public Image Goes A Long, Long Way
Surely, people miss the rejuvenating pampering of their favorite hotel experience. It’s not a part of our lives that we want to part with, and consumers want to offer their support and their business as soon as it becomes safe to do so. But many smart hotel professionals have gone above and beyond during the time of COVID-19, showing a noble commitment to their communities and quickly pivoting away from sales to offer their resources in ways that are meaningful and relevant to the times that we’re facing. While we can assume marketing wasn’t the main motivator, garnering a strong public image is not the worst way to wait out the COVID-19 slump.
A number of industry leaders have found ways to help people stay at home. RoomKeyPMS created a database called Emergency Hotel Rooms designed to offer discounted rates to anyone in need of a space to self-quarantine or relocate closer to a loved one in poor health. FabHotels offered discounted rates for rooms with high-speed internet to help business professionals find space to continue their work, and more than 80 of their properties were dedicated to hosting medical staff and frontline workers who weren’t able to risk returning to their families in the early stages of COVID-19 management. In any capacity, this kind of community awareness shows a real commitment to consumers beyond the math of sales.
Smart Tech Brings the Future Guest Experience to New Heights
Having provided solutions at scale to the health, safety, and crowd management problems that came along with COVID-19, smart technology is seeing a rapid uptake in the hotel industry. From sanitation procedures to streamlined guest experiences, these kinds of technological advancements will far outlast the pandemic.
Smarter cleaning solutions, app-enabled contact tracing, and more efficient, greener energy solutions are all things that have been put in place to counter the concerns of a COVID-19 stay. Along with integrated concierge platforms, where guests can seamlessly check in and out without the risk and hassle of long lines, integrated app platforms are also becoming more and more common. Offerings include unlocking doors, contacting room service, booking fitness time and ordering from local restaurants. Many of these applications have the capacity to use facial recognition to ensure guest identity security. Data from these user cases can help hotel professionals streamline their services and maximize their margins.
Considering the travel implications of the pandemic, a nose dive in the hospitality industry was to be expected. A sector known to rebound, there won’t be real reprieve on the horizon until safety conditions improve and corporate, family, and international travel doesn’t jeopardize the health of consumers or providers. In the meantime, hotels have proved their commitment to the greater good of their communities, and smart technology is transforming the sector such that the new hotel experience will be far beyond anyone’s expectations. Signs of recovery are on the horizon—the question, of course, is how much longer the storm will rage on.
About Zain Jaffer
Zain Jaffer a tech entrepreneur and the Founder and CEO of Zain Ventures, an investment firm with over $100 million in assets under management. Zain Ventures invests in a variety of initiatives including commercial real estate, technology start-ups and private equity.