The global economic crisis caused by the COVID-19 pandemic has affected every industry, throwing them into uncertainty and chaos. The tourism and hospitality sectors have been one of the most impacted industries due to travel restrictions worldwide. In a January report, the World Tourism Organization (UNWTO) pointed out that international tourist arrivals have declined by 74%, causing a loss of $910 billion to $1.2 trillion in export revenues from tourism, besides putting 100 to 120 million jobs at risk.
To attract customers and instill the idea of safety in their minds, companies have been resorting to technological solutions and strategies that were deemed irrelevant in the pre-COVID world (see Figure 1).
Figure 1: Factors to attract customers and instill the idea of safety in the Post-COVID world
1. Enhanced Safety Protocols and Wellness Programs for Sustainability: Businesses must implement better health and sanity protocols not only for the safety of customers but also for their employees. Organizations need to maintain adequate personal protective equipment and cleaning supplies on hand, including masks, gloves, and disinfectants. Businesses should also take steps to amplify these procedures to their customers through various channels like customer websites or via mobility apps, push notifications, social media campaigns and advertising.
2. Making Smarter Decisions: Travel is most likely to increase followed by an increase in occupancy rate, which will translate into better revenue per available room (RevPAR). As additional cost is involved in acquiring customers. While short-term cost optimization strategies such as layoffs may offer some cushion, organizations should emphasize on long-term strategies such as automation, digitization. pricing and competitor strategies, which will be a key determining factor in attracting customers.
3. Providing Seamless Customer Experience: In the current scenario, customers place high emphasis on social distancing, safety protocols, cleanliness, hygiene and sanitation while choosing places to stay. Sometimes, implementation of these protocols can hamper the seamless experience of customers; for example, a long queue for temperature checks can be a put off for many people. In such situations, the use of thermal cameras can replace individual scanning to avoid long queues. Digitalization can go a long way in providing a seamless customer experience; for example, a mobile platform where the hotel’s offerings can be accessed in a single place can be a customer-friendly initiative.
4. Leadership's Strategic Focus towards Transformation: CXOs in the industry are focusing on winning the customer’s trust again, repurposing assets, deﬁning new policies and monitoring complete supply chains in the post-pandemic era. The CEOs of the industry now have a higher interest towards digitization, use of drones and robots, artificial intelligence (AI), digital communication, data analytics and contactless deliveries. CIOs are more focused towards use of AI and data science to automate customer care processes, and drive customer loyalty.
5. Go-to-market Strategy: As the economy recovers, organizations should rethink their marketing strategies as against minimizing budgets like they did early last year. The important consideration now for customers while choosing a hotel or destination is safety, and organizations need to amplify it and take effort to project it to its customers. An area that has grown during the pandemic is influencer marketing, where organizations hire influencers to project how safe their environment is for customers.
1. Nurturing Alliances and Partnerships: Businesses need to form alliances and partnerships with other organizations upstream and downstream in their ecosystem. Looking ahead towards recovery, partnership with upstream providers like aviation companies and downstream ones like tourism agents and cab agencies can provide customers with an integrated service with better safety at every stage of their travel experience. Another example is partnership between hotels and hygiene product and healthcare companies to draft better health and safety protocols.
2. Government Regulations and Consortiums: Businesses must abide by strict rules and comply with protocols and guidelines published by the regional and central governments. Non-compliance can lead to heavy fines and create a bad image among customers.
3. Industry Landscape Competition/Consumer Market: With low demand, competition becomes cutthroat. In order to survive, organizations must strive to be different from one another. To do so, they can implement unique innovative solutions and strategies apart from ramping up their marketing and digital activities. To achieve this uniqueness, organizations must study their customers and align themselves with market and consumer demands to stay competitive. One such example is a hotel converting its unused rooms into restaurants, thereby allowing social distancing between its customers. Many organizations are moving towards more technological options such as mobile check-in and robots deployment to reduce human contact as well as using virtual reality to provide customers a glimpse of their premises before checking in.
4. Technology Drivers: COVID-19 has accelerated the adoption of new technologies and applications in hotel operations. The most basic feature that even small-scale companies can adopt is the use of mobiles for various activities like checking in or out, digital menus, in-app ordering, room keys and so on. Customer-service functions through AI-powered chat bots, autonomous robots for housekeeping and sterilizing high contact areas; use of computer vision and sensors to detect whether people are adhering to basic rules like wearing masks and maintaining social distance can go a long way in protecting guests and employees.
Amidst the current financial strain on businesses and the evolving demand landscape, organizations will need help from governments to transform current impediments into promising opportunities for revival, including facilitating compliance with travel restrictions, supporting with liquidity and monetary measures, securing laborers, and advancing the travel industry.