1. Facts
Between february and march 2020, market capitalizations in the so called BEACH industries (Booking, entertainment, airlines, cruises, and hotels) have fell down. The following exhibit depicts this fact.
By looking these industry losses, it is difficult to determine the end of the crisis and damages.
The hospitality and casino companies are in a standstill, with a significant loss of jobs, not only of who work in the casinos and hotels, but the suppliers to those casinos, and then all the taxes lost shoud have been paid to the government during the outbreak.
Larger upscale hotels, which tend to hold business conventions and entertainment events, were most severely hit.
In Latin American countries like Brasil, the government closed land borders with surrounding countries. More than 90% of hotel reservations and events have already been canceled or postponed according the Brasilian Industry Hotel Association (ABIH Nacional). In Rio de Janeiro's iconic Copacabana Palace hotel is closed for the first time in nearly a century.
Along the country, hotels are receiving health professionals and patients without gravity as part an important contribution to the public health.
In Mexico, Cancún, the most important tourist destination, with empty beaches and hotels that close their doors, hotel occupancy was 7% percent at the end of march ( Source: Clarin Newspaper).
In Paraguay, 95% of the hotels are closed without certainty of reopening in the short term.
2. Market trends
3. Strategies for a changing global business environment
Financial issues
Understand the impact on Cash, Working Capital and Profitability. This is a dynamic and fast-moving environment. Ensure that you keep ahead of changes to the situation and impacts these may have in your company.
Redifine the relationship with suppliers on payment terms, discounts, bonus, etc.
Ensure cash is available to cover immediate overheads
Cost Control and revenue management: According with sales forecast, find the right size of staffing, operation costs and in consecuence cash Flow adjustments to keep up above the breakeven point.
Customer – Marketing Development
Improving brand culture and service standards to adapt to new customer patterns is critical
Sustain online presence with consumers: Engage with them to support business continuity with value content on an ongoing basis.
Digital channels plays a key role. Always inform the hotel/casino prevention plan and safe environment regarding health requirements.
Market to loyalty members: Loyalty means trust, and marketing to loyalty members who have a strong relationship with your brand is critical during times when people are not anxious to travel or play in a casino as before.
Research into the needs and expectation of the guests Will make the difference with the competition. It´s a matter of survival in this shrinking market. New patterns will arise sooner or later after crisis.
Develop local and regional markets that will likely be the first to recover in the tourism segment. Analyze all fly-in feeder markets.
Focus on length of stay offers, upselling ancillary offerings, and promoting upgrades on all your room and food services.
Look for alternative revenue business like gym 3rd party management, outdoors sports, coworking, retail renting spaces and boosting your facility potencial.
Employees crisis communication and leadership
Train all employees on the Best practices of a Prevention Plan and communication for a safety environment: It’s not theorical but also practical. It is very imporant to send one unified message on customers.
The importance of a solid leadership as an effective tool to build trust cannot be underestimated. In a crisis, employees and others make long-lasting judgements about the competence and ethics of the CEO or managers.
Corporate social responsibility
The hospitality industry fulfills a social role. So comunícate in social networks all the activities. Involve your staff so they will be and they will better understand the crisis situation by helping others.
Federico Lannes
Certified Public Accountant, (MBA) Master in Business Administration at (INCAE/Harvard). Member of the Institute of Internal Auditors USA (IIA), Actual General Manager at Gran Nobile Hotel and Convention in Paraguay.