Tourism is reactivating

After some very difficult months, both personally and professionally, the beginning of the so-called new normality is now in sight. Giving a boost to the sector, the government has announced that Spain will be able to receive foreign tourism from July onwards. It remains to be seen which corridors will be established between the issuing markets and our country, and the volume of tourists who will choose to travel. In any case, we can already look to the short and medium-term future with moderate optimism. Hotels that do not want to lose the path to profitability must adapt quickly, seeking formulas that generate demand and liquidity.

In this article we identify 6 keys that should be part of your hotel’s de-escalation plan.

  1. Adapt. Make your strategy fit the times.
  2. Google is on sale! Invest in digital marketing.
  3. Look for liquidity. Increase your profitability.
  4. Think about loyalty. Communicate your differential values.
  5. Communicate. Reassure your customers.
  6. Now or never, bet on digitalization.

Let’s start…

1. Adapt. Let your strategy adjust to the times.

Don’t forget local and national tourism
Despite the lifting of restrictions on international tourism, this year the local and national market will help you compensate for the undoubted decline in the foreign market. Because of their proximity, the local and national market is more likely to convert the reservation and, if the hygienic situation and the authorities allow it, less likely to cancel.

Even if your hotel has never had this market as a target, seriously consider changing your strategy:

  • Offer weekend getaways, even for international markets.
  • Eliminate night restrictions.
  • Create discounts or added value for residents (early check-in, late check-out, F&B credits, etc).
  • Redirect marketing budgets to local markets.
  • Make offers for healthcare, security or essential services personnel.
  • Celebrate your opening dates by offering aggressive and exclusive offers.

The foreign market is coming back, but not in the same way.
The volume of arrivals will be more staggered, and the customer profile and nationality will not necessarily be the same as before COVID-19, at least this summer. Focus on generating demand (in the form of discounts or added value) in the long term, and adapt to new ways of traveling. These months have done a lot of damage to society morally, but also economically. The average stay may be reduced, and we may see a trend toward off-season travel. For this reason, many of the tactics you push for the local and domestic market (eliminating night restrictions, special offers for healthcare workers) can also be applied to international markets. If you combine them with a balanced marketing investment, the international market will pay off today, for arrivals starting in July, but also in the fall and even in 2021.

2. Google is on sale! Invest in digital marketing.

After the government’s announcement to lift restrictions on foreign tourism, reactivating your marketing campaigns has become indispensable. And the conditions to do so are very favorable. The cost per click (CPC) of Google Ads have been reduced by 72% vs May 2019. It has never been so economical, and probably never will be again, to invest in paid campaigns. But this situation will not last. Major advertisers (especially OTAs) will reactivate their investment. And this means that investment costs will increase. The longer you take to reactivate your campaigns, the higher your bids in Google Ads will have to be if you want to appear in a better position than the big OTAs and metasearch engines. If you have not already done so, we recommend that you reactivate your investment.

The opportunity deserves it. And remember not to neglect the basic elements to get good results in your direct channel:

  1. Offer conditions (prices or added values) exclusive to your direct channel.
  2. Avoid disparities with respect to OTAs.
  3. Favor medium-term sales, with arrivals from July onwards, when the pace of sales increases and cancellations decrease.

3. Seek liquidity. Increase your profitability.

Protecting liquidity, to ensure the long-term viability of the business, should be an indispensable element of any strategy you put in place for your hotel. The key is to keep bookings in your system – avoiding cancellations – and find new ways to generate additional revenue. Here are several ways to achieve this: Offer Gift Cards.

To avoid cancellations – by offering alternatives in the future – or as an additional form of payment, the Gift Card is a fundamental tool to achieve the now famous “Don’t cancel. Postpone”:

Here are its main advantages:

  • Helps keep reservations in your system (for future arrivals).
  • Guarantees the customer’s return in the near future (by postponing the booking instead of canceling it).
  • Improve your customers’ experience by offering flexibility and alternatives that will make them feel more confident when making a reservation at your hotel.

In addition, the Gift Card allows you to bring a dose of creativity to your commercial strategy. For example, offering discounts or incentives to undecided customers from your Call Center or reservations department: “15€ voucher for your next booking”, or as a booking multiplier, offering it as a gift (to a special person, family member or friend, or company incentives), to generate additional demand and create additional revenue.

Recently, Roiback has announced our Gift Card, with no added cost for our customers and with a variety of use cases.

It favors prepayments and installment payments.
By having part of the reservation amount available in advance, you will generate that much sought-after liquidity. And at the same time you will offer more alternatives and flexibility to your customers. To encourage prepayment, you can offer exclusive conditions (discounts or added value) that your customers can only find in your direct channel. The combination of liquidity and the lower cost of direct distribution will increase your profitability per booking.

Other benefits of flexible payments include the following:

  • You increase your conversion by offering flexible alternatives to your customers versus “book now, pay now”. Paying for a booking in installments can be an attractive option for your customers, convincing them to book.
  •  You significantly speed up your hotel’s operations, launching collections on scheduled dates (paydays) and automating a large part of the collection management.
  • You reduce the risk of fraud by automatically validating the credit card at the time of booking, and you comply with the PCI DSS credit card data security standard and the PSD2 payment services directive.

Prepaid reservations also help reduce interaction between the guest and the front desk. Staff handling collections will not need to key in credit card details to trigger each booking collection. These are handled – either in advance or on arrival at the hotel – automatically through the tool. Everything counts when it comes to reducing unnecessary contact moments, and adapting to hygiene protocols.

4. Think loyalty. Communicate your differential values.

If you do not yet have a loyalty program?

Don’t wait any longer. Create one, even a simple one. The first step is to use your program tactically, with prices and added values that differentiate your direct channel. And of course, that will help you convert more bookings. Communicate the differential values of your Loyalty program in the most visible touchpoints of your direct channel: website, email marketing and main marketing channels (SEM campaigns, social media and meta search engines). For example, in Google Hotel Ads – a channel very close to the purchase decision and with very high conversions – exclusive conditions for members will increase your conversions significantly. The comparison with OTAs will always be positive in your favor.

If you already have a loyalty program?

Exploit it to the fullest. Make your customers feel special. And make them feel safe. Many post-COVID-19 travelers will seek the reassurance and familiarity of a hotel they already know and trust.

Segment your customers – ideally combining the loyalty program with a CRM platform – and launch communication campaigns to encourage repeat bookings or increase new registrations, which is one of the great challenges of any loyalty program.

5. Communicate. Reassure your customers.

In this day and age, it is important that you generate certainty that your hotel complies with hygiene protocols. Communicate clearly the measures you are implementing through all possible channels: social networks, newsletter to your contact list, landing page on the official website, confirmation voucher or pre-stay email. If you need advice on the best way to use the different communication touch-points, do not hesitate to contact us. We will be happy to help.

Offers travel insurance

Some of our clients already have travel insurance with specific coverage for COVID-19. The results, albeit with a small sample size, are very positive to date. Health insurance will help you provide that extra coverage, and that added security, so that your clients can travel with as little worry as possible. In addition, you will provide your direct channel with one more argument to boost your direct sales. Many of your intermediary channels – Tour Operators, OTAs, Travel Agencies or Airlines – already offer travel insurance. Why not offer it yourself?

6. Now or never, go digital.
The new reality will bring with it social distancing, limited capacity and the need to reduce contact between hotel staff and guests to what is strictly necessary. Going digital is no longer an option, but a necessity.

Implement online check-in.

By digitizing the check-in process, you will avoid crowds at your front desk, reducing unnecessary contact moments, facilitating social distancing and protecting both employee and guest health. In addition, online check-in will help you differentiate your brand, offering a reassuring element for many potential customers, which can mean the difference between converting a reservation or not. If your hotel has a digital door opening system, guests will not have to pick up their keys at the front desk and can access their rooms using their cell phones.

Even without a digital door opening system, waiting times at the hotel reception will be reduced by up to 85% as guests will avoid the pre-check-in procedure. You will have to identify them and hand them the key at the front desk. As we announced more than a year ago, Roiback’s partner hotels have this solution available with one of the best suppliers in the market, at special conditions.

Use Guest Service Applications to connect your guests with the different areas of your hotel. Easy to implement and cheaper than you might think, Guest Service applications allow your guests to access general information about your hotel: room service, restaurant reservations and services, excursions and transfers. In addition, you could use them as Chatbot or live chat service with the different areas of your establishment.

Thanks to our strategic alliances with the best technology partners, Roiback can recommend and help you implement the best GuestService tools on the market.

To sum up. Remember:

  1. Adapt. Make your strategy fit the times.
  2. Google is on sale! Invest in digital marketing.
  3. Look for liquidity. Increase your profitability.
  4. Think about loyalty. Communicate your differential values.
  5. Communicate. Reassure your customers.
  6. Now or never, bet on digitalization.
Laura Oliver BeltránJune 3, 2020