2021: How has the hospitality sector adapted to Covid-19?

The outbreak of the Covid-19 has resulted in each one of us affected some way or the other. Entire industries have come to a standstill with the after-effects of the pandemic.

All is not doom and gloom though. There is good news on the horizon!

With the roll-out of the vaccine across the globe, there is hope that most of these industries will recover. Some will rebound sooner, while others will take a while to return to pre-Covid levels. That said, the new normal will need companies adapting to the behaviours of its customers. This adaptation will be key to customers lining back to use their services.

This article looks at how one of the most affected industries – hospitality is playing the long-game and adapting to the new normal with new initiatives (and not price-discounting).

How did hospitality react to the pandemic?

With the onset of the pandemic, hospitality saw its worst downturn in more than two decades. At the start, everyone hoped the pandemic will subside within the first few months. Hotels started providing deep discounts to have customers coming back.

Leisure travelers though, preferred to take extreme safety precautions putting off non-discretionary travel, putting these deep discounts to no use. Customers with loyalty points even chose to let them expire, than of taking that trip they had long been planning. Companies required their employees to cut on business-travel and take calls online, using their travel-budgets elsewhere. It did not help hospitality, when government further had restrictions in place for travel.

With both leisure and business customers reducing travel, the hospitality industry as a whole suffered. This situation was no different across the globe, with many hotel-chains retrenching employees and others closing shop.

Turnaround from hospitality
Amidst all this, few hotels/hotel chains are choosing not to panic, but to strategise on playing the long game. Choosing this option is never easy, especially when results are not instantaneous, and often take months to materialize.

These hotels/chain have hedged their recovery on keeping their customers happy, thus not losing them to other brands – hoping they return when travel returns. They have chosen to keep the customer at the center of their long-term strategies and effected these steps to keep them from losing their most-loyal customers.

1. Refundable cancellation
A big worry for customers at the start of the pandemic was around the hotel bookings they had made. Most hotels/chains responded by making the said bookings by either refunding the amounts or providing vouchers which customers can redeem later.

2. Loyalty points extension
Most of the hotels have adapted their loyalty programmes to match the customer need and have extended or paused loyalty points expiration. Few have also started giving 2-year extension for existing customers.

Hilton’s Mark Weinstein has reassured the 108 million Hilton Honors members that their status would be extended through December 31, 2021.

While this move is customer friendly, it is also smart and calculated. The last thing any brand wants is for its most loyal customers to reconsider their brand affiliation in a year of very little travel.

3. Collaboration with other verticals to earn points.
The hospitality industry has allowed its customers to earn and redeem loyalty points across other avenues – those which are being used through the pandemic. Collaborating with supermarkets, credit-cards, luxury brands, car-rental, insurance companies has resulted in customers still being emotionally associated with these brands.

4. Keep customers engaged
Keep customers engaged – be through social-media or through earning or redeeming of loyalty points through this lean period. Brands need to learn how to keep their loyal customers engaged, thus creating an emotional connect with them, at all times.

Endnote
It will take a couple more years to for hotels to reach pre-Covid occupancy levels. That gives enough time for hotels to put through their strategies to ensure customers return into their fold when the pandemic lifts.

Use of a loyalty platform will help hotels manage all of the above and build custom-made brand experiences for its customers – experiences customers will love and get rewarded for their desired behaviour.

Ali Askar is the senior business development manager at Finesse