Hotel Product Adaptations and Impact on Operations in the post-COVID-19 Era
In our 25 years of hospitality consulting, we had never thought we would see a period quite so transformative for hotels. The next few years will witness a much greater push in terms of how hotels operate: owner–operator relationships could well be re-defined, as could management-employee relationships. Moreover, the consumer behaviour of travellers and the hotel product itself will be studied closely to determine what’s relevant and what’s not.
This article focuses on the hotel product: most importantly, on Rooms, F&B and Public Area adaptations that would need to take place from a product perspective. Travellers are going to look for a unique and special reason to travel to a country, city or hotel. Unless the hotels (and guest houses) out there do more than cater to a basic set of travel needs – in other words, create a genuinely compelling and differentiated offering – they will be in big trouble.
Branded hotels have been playing with brand standards to meet their own requirements of segmenting hotel products, to avoid area-of-protection clauses in hotel management contracts and to be able to have multiple hotel products in the same market. Too many brands within each hotel company that have been created, mainly to keep growing and not because of any serious customer needs. This will either start getting rationalised by the brands themselves or they will be forced to do so by owners. Brand standards should be based on the returns owners make, what customers need and most importantly what they are ready to pay for.
Frankly, most travellers and, in particular business travellers, are looking for a clean room, efficient WIFI and a comfortable bed and shower. Notwithstanding, marketing executives utilise a lot of fluff and jargon to differentiate their hotel product. Brands instead need to shift their emphasis to maintaining strong safety and hygiene standards: if hotels can be built cheaper because they can become simpler to use, then that would be the way to go for brands. Here’s a look at certain things that should change and help bring about standardisation.
Room Size Matters
We believe there could potentially be a big shift in focus from room sizes and amenities to safety and health. The past few years have seen owners complain that it’s become too expensive to build hotels. Large room sizes have become the easiest way for large multi-branded hotel companies to ask for differentiation: for a given brand, rooms in the US may be 32-34 sq metres, but be of a different size in Europe. In Asia, brand development teams have insisted on a size which in most cases is 15-20% larger. And we have seen this again and again. The unsuspecting owner therefore ends up spending more on a per-square-foot basis. Unfortunately, for many owners, this expenditure is also about being able to satisfy their ego. I think going forward we will need to be smarter and focus on investments that are productive and meet a new set of needs.
We believe that if a Upscale hotel was earlier built with a gross area of 900–1100 per sq ft or a mid-scale hotel was built at 800-900 per sq ft then the general rule should be as to how we can reduce this by 10% to 15% at the very least for all new builds. If we truly expect that the number of permanent employees will go down by, say, 20% in times to come, then we need smaller locker rooms, administration areas, smaller staff cafeteria etc. With sustainable development a key subject in today’s world, the time for conservation has come and every inch of the developed space needs to be re-engineered. Room design and fit outs may become much simpler and more standardised. Ideally, the brand will provide four ready options and the owner gets complete designs and plans for the one he/she picks. Instead of larger, we believe rooms will need to become simpler with less ‘stuff’, making them easier to clean and allowing fewer objects that guests can touch. Expect the same in the bathrooms. Finally, we think some of the minimum room inventory requirements may go away and the focus will instead be on the most appropriate inventory for that location and market.
Perhaps the time has come for full-service hotels in urban locations to examine their F&B offerings. With the aim of reducing cost it may be important to restrict F&B outlets to one or two. Freestanding restaurants have already taken a march over many hotel restaurants and this may be a good time to evaluate the restaurant product. The use of technology will grow and so will the guest’s ability to order / pay by using QR codes (see our article ‘Who Moved My Cheese? – Disruptions That Will Redefine Hospitality in a post Pandemic World’). Menus may well be displayed in large display units or the old-fashioned blackboard; for now, buffets will certainly find their way out and therefore smaller menus may come back in fashion. Coffee shops will need to have potentially larger areas and may spill outdoors or into the corridors for now, as it may not be physically possible to maintain social distancing otherwise. How about instead of an open kitchen we have a visible dish washer?
Banquet sizes may need to be reviewed as it may become difficult to provide buffets for weddings and social distancing guidelines may get defined by state authorities. However, on the other hand back of the house areas could actually reduce as people combine job roles and there are fewer employees. Certain functions will get combined to bring payroll under control, as highlighted in our article Talent Management, Engagement and Compensation. Further, the need to be sustainable may result in engineering areas becoming more compact, as new plant and machinery is generally smaller, more efficient and sustainable.
In terms of hotel operations, some adaptations required at department level will be as follows:
- Hygiene and Safety: Security departments will have to continue thermal scanning for guests and staff at all points of entry into hotels. A sustainable method will need to be devised to sanitise guest luggage coming in. Front Office team members will need to ensure adequate social distancing between guests at all times and procuring details of travel histories and possible symptoms may continue in the immediate to medium term. In the longer term, the Housekeeping department will become a key player in ensuring that stringent room checks are carried out in an effort to ensure maximum levels of hygiene being maintained throughout the hotels. Sanitisers will not only become available throughout the hotels but will also form an essential part of the housekeeping caddy. The Hygiene and Quality Control department will become essential to ensuring safe receiving of raw materials, as well as quality checks of staff, food products and surfaces. Food related hygiene and sanitation has been covered in detail in the section titled Food and Beverage: The Way Forward. Brands may consider introducing a position for the Chief Health/ Hygiene Officer who would be responsible for creating guidelines for hygiene and sanitation practices at a corporate level and monitoring these at unit level.
- Reforecasting Exercise: In the immediate term, hotels will need to undertake an extensive re-budgeting exercise for the financial year with crucial inputs from the Finance, Sales and Marketing and Revenue departments. The Finance department will have to give insights into the government relief packages available to them as well as legal requirements to be fulfilled by the hotels. Sales and Marketing departments will need to identify different markets to attract business from and consortium marketing is expected to gain momentum. We highlight the need for Sales teams to accept the fact that simply lowering rates would not attract more guests (refer to our article: Road to Recovery Through Revenue Management). Weekend demand in city hotels may need to be turbo-induced using attractive pricing. Additionally, departmental costs will have to be relooked at and stringent cost control measures will need to be put in place.
- Digital Marketing: As consumers in general become more tech-savvy in lockdown periods, digital marketing will gain popularity now more than ever before. Marketing Communication Managers will need to focus their energy on connecting with existing and potential guests across various digital platforms, re-iterating for guests the initiatives taken by their brands and individual units during the COVID-19 crisis to ensure guest comfort and guest and employee safety.
- Contact-less Services: Contact-less services that are yet to gain popularity in Indian hospitality may well become the trend in the post COVID-19 era, such as: a) Self-check-in kiosks b) Online check-in and check-out c) Electronic minibars and d) Digital Key technology
- Public Areas: Public areas, especially swimming pools and fitness centres, will have to be closely monitored by trained staff. Guests will have to undergo thermal scanning and number of guests using the facility at any given point of time will have to be controlled. Spa and Fitness Centre memberships for non-resident guests may lose popularity in the medium to long term. Equipment at the fitness centres and business centres will need to be sanitised after every use.