Thriving, post-pandemic. And getting strategic about resilience.
So, you’re a hotelier. You’re feeling whipsawed, unsurprisingly. Until early 2020, things were going swimmingly: the US travel industry was coming off an all-time high: between 2010 and 2020 travel spending soared 62%, reaching $1.1 trillion annually in 2019 and totaling 9.5 trillion in the decade, significantly outpacing the growth of the overall economy.
And then came COVID-19.
Understandably, most hospitality businesses — from mega players like Marriott to the smaller boutique chain-lets — have gone deep into hunker-down mode and laid off workers in hotels and at corporate.
But there will be a time after COVID-19 and it will not be like the halcyon days of 2019. Though hardly a gift, this is a chance to start planning for a new world of hospitality — one with plenty of risks, for sure, but also opportunity.
Why? Because the winds of change have been blowing in hospitality for years: the rise of AirBnB; concerns about sustainability; over tourism; the rise of videoconferencing technology; generational shifts; new forms of luxury; and that’s just to name a few.
And now, we have this pandemic…just one in an inevitable series.
So resilience will be the new byword of the industry, but what flavor of resilience? One definition of resilience (from Merriam-Webster) is the definition as it applies to physics: “The capability of a strained body to recover its size and shape after deformation caused especially by compressive stress.” The focus is in returning to the original state — and while attractive, it feels that the context in which hospitality finds itself has fundamentally shifted.
Webster’s alternative definition is, “An ability to recover from or adjust easily to misfortune or change.” That’s a more expansive definition, and more in the spirit of the kind of resilience that’s called for. What’s more interesting still is that the word resilience derives from the Latin verb resilire, meaning “to jump back” or “to recoil.” And the base of resilire is salire, a verb meaning “to leap” root of the words like sally and somersault.
The energy of “leap” is at odds with the instinct to hunker down to revert to “normal” as soon as possible — but leap is the energy that the industry needs to muster to be successful in the long term. The big opportunity in this crisis is to think more transformatively…and in so doing, build resilience. Put even more strongly, resilience won’t be possible without transformation.
In coming weeks, we’ll be addressing how design, service, bigger thinking about brand, and fresh thinking about business models and formats can create resilience — and transformation. How do we take this as a chance to leap into the future, and not just return to the past?
As Stanford economist Paul Romer said, a crisis is a terrible thing to waste.
COVID 19 isn’t a short, sharp, shock. This is a game changer for hospitality.
The obvious: we don’t know how long this is going to last.
It’s probably not armageddon for all, but recovery will not be as fast as the hospitality industry experienced in Hong Kong, Singapore and China post-SARS (within 2 quarters). COVID-19, while less deadly than SARS, is likely to be spread more broadly by asymptomatic carriers: the ability to declare an “all clear” will be much more uncertain.
Yes, tests will become more available. Treatments will show promise. And vaccines will be discovered (though not widely available for a year or so.) But hoteliers had better be prepared for ongoing, rolling lockdowns.
As countries begin to lift their restrictions and allow travel cross-border/regions, the potential for reinfection is high: China is expecting a spike as its lockdowns are slowly lifted. And Singapore — lauded for its efforts to contain the spread in the first wave of the pandemic — has experienced a spike again, in large part due to travelers returning from Europe. According to its government, it will tighten and loosen measures when necessary, a sort of “circuit breaker” if cases surge. Expect this to be the pattern worldwide.
Compounding it all: this isn’t likely to be a one-time event.
Will COVID — like the flu — take a vacation this summer and return next fall? The experts don’t necessarily believe it will. Will the virus mutate? How frequent will these events be?
Globalization — of which travel is both an enabler and beneficiary — means more frequency for these pandemics. You won’t be able to predict when, or what its exact nature will be. But rather than every 5–6 years, regionally contained, it’s not unreasonable to think pandemics as a once every 2–3 years global event. Pandemics aren’t Black Swans anymore, if they ever were. They’re recurring events. And that’s something you can plan for.
This pandemic will accelerate changes, many of which were already in the works.
The business traveler.
Will the all-important corporate business traveler (approximately 30% of total travel spend) drop their in-person travel in favor of videoconferencing in their sweats?
The trend toward being able to work and meet at a distance is already in play. Remote working is more and more common in many industries: according to Switzerland’s IWG, 70 percent of professionals work remotely at least one day a week, while 53 percent already work remotely for at least half of the week.
For commercial real estate owners, this should be a sobering thought. After a several month experiment with remote working, it’s not unthinkable that companies will start to radically restructure their real estate portfolios, focusing less on mammoth “headquarters” and more on smaller “pods” for intensive project work…while the majority work at home. This kind of thing’s been talked about for decades but with this COVID-enforced experiment, it just may be the thing that pushes corporate planners over the top.
But, the counter goes, there’s a deep, instinctive desire — a need — for humans to gather. People need to be with each other to negotiate, sell, raise money, skunkworks a new project, etc. Human gathering will always be important for creating and deepening bonds and generating the kind of energy to move fast on certain projects. So look for business people to optimize technology to its best use — which could likely result in less business travel, but taking place in new ways. Hoteliers should be asking themselves how they can track, iterate, and then accommodate these shifts.
And what of those large-scale conferences? Before COVID, conference fatigue had already been setting in, fueled by proliferation of conferences; the cost of staging, exhibiting at, and attending them; concern about environmental footprint; and dubious ROI. Will the experiments with taking conferences online spur others to continue refining the formula? What does feel right: more online conferences, more smaller-scale summits, and fewer conferences in the next couple of years, particularly during the winter.
People need to meet — they want to meet to solve problems, get creative, build bonds. The question is how, and where. We’ll all be experimenting and learning, with fewer clear trends in the short term. How can hospitality help?
The leisure traveler.
Once the initial news and financial shock subside, how will leisure travelers’ long term behaviors change as a result? We see the possibility for major changes in frequency, destination, and format.
Frequency. Will consumers travel less, concerned about contagion or getting stuck somewhere under a sudden lockdown? Much will depend on how often pandemics like COVID recur, the action governments take, and how skittish it makes travelers. If travel becomes a logistical nightmare, how will it change one of the global consumer’s favorite pastimes?
Environmental/carbon footprint concerns have been growing over the last few years culminating in last year’s Extinction Rebellion demonstrations. Will environmental concerns put a brake on the “jump on a plane for a weekend away” mentality that was a hallmark of the early part of the 21st century? Will they take a “fewer but better” approach — more expensive trips and vacations but fewer of them? How will this vary generationally?
Destinations. COVID could have a big impact on destinations. Travel slowly rebounded after 9/11 and the industry went on to thrive, but repeated shocks can’t help but eat away at confidence at getting on a plane. So, as with the post-9/11 crisis, look to more local visits and travel, possibly by car. What effect will that have on hotels and staffing?
The pandemic also showed the downsides of the exciting, bustling metropolis: lots of strangers spreading germs. Will families want to be in densely populated cities, or will they want to be in those out of the way places, where social distancing is more possible in a pinch? But what if those places are “over-touristed”?
One of the major challenges for city-based hospitality is the already-dire effect that the shutdowns will have on main streets. With boarded-up restaurants and an explosion of For Lease signs in already-struggling retail districts, cities will, for a period of time, be shadows of their former selves.
One likelihood: people, feeling newly empowered to work remotely, will accelerate the emerging trend of moving to smaller cities like Boise, Nashville, and Portland, or former resort towns like Lake Tahoe and Santa Barbara. If they’re already living the idyllic life, will it change the kinds of vacations they crave?
Formats. The hospitality experiences that people gravitate to will also likely change. Based on behavior after the 9/11 attacks, some will rush to gather once the acute phase of this shock passes. Others will be embracing a newfound appreciation of their introversion and focus on nesting. Behavior will likely shift over time, but it may make hoteliers want to consider how to appeal to both groups. For hoteliers this might require some significant design and programming changes to public spaces, meeting areas, and services.
Over the last few years, hotels (and in particular boutique hotels) have spent big on lobby and bar “scenes” to amp up the energy, bring in the locals, and improve the bottom line. Post-COVID, those bar scenes will still be important but some substantial segment of guests may well be less enthusiastic about wading through heaving lobby crowds to get to their rooms. Recent reports that an Austrian ski resort — known for its party scene — resulted in hundreds of infections in Germany, Iceland, Norway and Denmark just add fuel to the fire. A populace that’s internalized the message that “crowds can kill you” will be more skittish about large congregations of strangers, however well-dressed and cool they are.
At the opposite end of the spectrum from the sexy lobby scene is the distinctly un-sexy topic of hygiene. Hygiene was always cringingly suspect, even in the best establishments, but at a time when hygiene equals security, hotels will have to up their game and messaging. It’s not enough to go through the motions of cleaning: hotels are going to have to demonstrate and prove rigorous and professional levels of cleanliness. Suddenly, AirBnB and its competitors look a lot less compelling. How much will consumers be willing to entrust their health and security to unregulated accommodations without “professional” operators? Hotels can’t rest on their laurels, though. They’ll have to raise their game, and soon.
Will travelers crave privacy and intimacy at the expense of larger hotels? Will private serviced villas become more popular if concerns about crowds and strangers take hold? This is now the province of luxury resorts, but could variants of this become desirable for more mainstream hotels? A host of new formats could be developed to address privacy/security concerns.
And finally, hearing from friends near and far, there’s been a great deal of talk about an existential reckoning. People of all ages are questioning the way they live, their fast-paced lives, and the mental and physical toll it’s all taking. This could be ephemeral, of course, but it all fits into the ongoing interest in mindfulness, wellness, etc. Look for this to change the way people think about not just traveling, but living.
And therein is yet another opportunity for hospitality to find transformative opportunities.
Up next: thinking strategically about brand.
