#COVID19 — a guide for the hostel industry
For the first time in human history, the entire planet is worried about the same problem. We will triumph. However, it’s not going to be easy — especially for the hospitality industry, which has found itself in the eye of the storm.
I’m a big fan of Stoic philosophy and in the midst of this chaos I’d like to share one of the central tenets with you...
You Don’t Control What Happens, You Control How You Respond
Here are a few broad guidelines that you should consider. In the coming weeks we’ll dive into more details with more specific recommendations.
- Practice safety measures — Prevent the spread of the virus. Double down on your cleaning process. Another idea is to convert larger dorms into smaller dorms — accommodate 1 person per bunk for instance. Ironically, your occupancy might just self regulate the number of people per room. Lastly, if your country decides that the time is right for social distancing, do your civic duty, put human life above economic interest and shut down your hostel.
- Conserve cash —This may seem rather obvious to hostels that have already been hit. If you haven’t seen any impact yet, don’t dismiss this warning lightly. Prepare for the storm and hope that it passes quickly. Reduce your inventory and definitely think twice before hiring new staff. Cash buys you another day at low occupancy and buys you time to respond to the situation.
- Communicate clearly — Given the uncertainty around whether locations are open or not, it would be best for you to get a clear message out to your staff and to your customers. If you are refunding non-refundable-rates, please let your customers know. Be warned that some OTAs (you know which ones) might try to opt you into their refund programs and you have a right to deny this opt-in.
- Hang up your boots — Maybe you’ve had a great run and nothing lasts forever. You’ve made friends with travellers from hundreds of places and maybe even met the love of your life at your front desk (like me). You could use this pivotal moment as a moment to reflect on what hosteling has given you and decide that the world holds many more adventures in store. As a fellow hostel owner / operator, I know how hard this journey has been. There is no dishonour in tapping out. If you are interested in selling your hostel — please let me know. We are creating a list of hostels for sale to help existing hostel owners salvage some value while helping new entrants get a leg up in the business.
- Prepare for a fight — This is not going to be easy. The next 6–9 months will take a lot of effort, cash and will cause incredible emotional turmoil. However, you will power through these difficulties because you’re in this for the long haul. There’s no rainbow without the rain and that kind of stuff. You can take this time of low occupancy as an opportunity to fortify your business for when travel returns in a few months. There has never been a better moment to redo your bathrooms, build an outdoor bar or invest in some smarter and cost-saving technology (talk to me). Whatever you choose to do, use your time wisely and you could come out of this crisis stronger.
- Make a 5 year plan — Asking yourself where you would like your business to be in 5 years is a great way to figure out the strategic actions you should be taking in the next few months to prepare for your desired outcome. The will be a mountain of opportunity on the other side of this crisis. If you would like to automate your income flow, now’s the time to invest in process. If you would like to reduce your dependency on external stakeholders —you could secure financing to purchase your property in a potentially deflated real estate market. And if you would like to grow an empire, now’s the time to start planning for financing and looking out for high-value acquisitions.
Coping with Corona virus: How the pandemic has upended your jobs — and lives
Having spoken to hostel owners in New Zealand, Ireland, India, Spain, USA, Colombia and several other countries over the past 14 days — the ground reality is that the situation is quickly progressing from bad to worse. Hostels among many other service industries are hurting. Countries have imposed severe travel restrictions and travellers have made arrangements to travel to the safety of their homes. Global occupancy levels have plunged by over 75%.
We heard stories about receptionists, bartenders, and housekeepers left with no source of income. Travellers were left stranded far from their homes and families. We’re calling up a few of you to hear firsthand how you’re coping, and we will be sharing some of those stories in the coming weeks. We’ll start off with our story below.
“Having severely underestimated the ability of the virus to economically impact an offbeat destination like Goa, our first concern is for our staff”
Jungle Hostel, 125 Beds | Goa, India
Goa is a small state in India (100km by 100km) with a population of 1.1 million and annual traveler count of 1.5 million. It is heavily dependent on tourism, both international and domestic. Goa is yet to register a single case of the virus. However, strict international border controls and paranoia over the virus has caused tourism to dry up overnight. Our occupancy plunged by 70% and we’re facing a strong off-season with no indication of how long the crisis will last.
Our first duty is to address the human threat and protect our staff (some of them in the high risk zone for the virus) and our guests since dormitories do not align with social distancing principles. This led us to the difficult conclusion that we had to shut down the property and send people home. The second decision of mitigating economic slowdown is the next challenge that we have to face and we are studying the market and weighing our options.
If you are doing something special at your property or have noticed something that you would like to share, please share your story with us and send me an email.
The world’s economy has always expanded and contracted cyclically. What we’re experiencing at the moment is the worst economic downturn for the travel industry in over 100 years (and possibly in all of history). It messed up on such gigantic scales that you could definitely tell your grand-kids about the incredible turn of events that are happening to you right now. Consider keeping a diary to log the stories and emotions that you are experiencing.
Only time will tell how this story plays out and I for one, am sitting at the edge of my seat watching breathlessly as the events unfold — some of them horrifying and some of them reassuring. Humanity will survive and good times will return. But it’s the tough times that will give us the scars that define who we are and what we stand for.
You’ve got this.
We’ve got this..
