White Paper — effective hybrid hospitality solutions
Undoubtedly 2020 was a year that took us all out of our comfort zone, what we have been doing successfully for years will not apply for the next ones. According to recent news from The Guardian (UK) and RTP (Portugal), one-third of the hostels from both locations closes their doors in 2020.
On the other hand, we experienced a heroic revolution in the hospitality industry; businesses reinventing themselves to survive, certainly the time we learnt most and evolved as a community and entrepreneurs.
Past this most difficult phase, consumer habits and human interactions have changed. Fortunately, what will never change is the curiosity to experience the world.
Tourism has already shown its new face, accepting and implementing new technologies that help us reduce contact, new cleaning and operational standards and different possibilities to embrace the new demand. The challenges are making us adapt to this new era of hospitality, it will not be easy, but we truly believe that the future is bright and exciting.
NEW CUSTOMER MINDSET
[A] Health and Safety
A new consumer mindset has been established according to market uncertainty. More than ever, personal and community health and safety are the top priorities.
For hospitality businesses, cleanliness and contactless operations have become a must. Reopening hostels doors created customers expectations and, we have faced different rules and restrictions so quickly learning how to adapt to this new reality is essential.
According to a survey run by AHLA in August, when asked about safe-stay protocols, over 85% answered that the using of face masks in hotel/hostels is a must requirement for employees and guests. The same percentage also agreed on using technology to reduce direct contact.
From this point of view, hostels must adopt two different guidelines:
- Communication — signage for washing hands, floor markings for social distance, transparent barriers, orientations on guest behaviour in common areas.
- Technology — online check-in, contactless payment, automatic door keys, etc.
Another important communication aspect is maintaining constantly updated terms and conditions regarding restrictions and cancellations in every OTA and hostel direct website. The confirmation e-mail after a new reservation could also serve as a reminder about the hostel rules.
Finally, some countries issue a safety certification stamp for the properties that are following all the necessary precautions. The stamp could be useful to assure credibility. Businesses that adopt and communicate those measures have positioned themselves better on metasearch and OTAs, attracting returning customers and winning their confidence.
[B] Domestic travel
The mindset also shifted from international to domestic travelling.
According to google travel insights, over 90% of European travellers chose to explore their home countries.
It is given by the fact that many international borders remain closed and recently, customers are more concerned about long-distance trips. It has also been noticed that tourism is moving away from urban centres to less populated locations. Travellers are choosing nature instead of big cities.
[C] Last-minute planning
Again, due to uncertainty, trips have been planned last minute, drastically changing the booking window and pickup. In 2019 we could recognize pickup 30 days to one week before arrival. This behaviour changed for 2020. Nowadays, most of the pickup occurs a maximum of seven days before arrival, which means that the price has to be more adaptable and followed closely.
It’s possible to predict some concepts for 2021, like the extinguishing of Non-refundable rates, price elasticity and the increase of long term stay guests. It is time for Hostels to step back from NRR to let guests book with confidence. Giving them some space could help to recover the trust in the industry, increasing the booking window and rebuilding brand loyalty.
The old fashion way we used to price our inventory is not accurate anymore for three main reasons:
- Competitor prices reflect their own needs, it’s impossible to be sure about it. Your reality is completely different from your competitors.
- For most travel destinations there is more supply than demand, which makes it difficult to outstand only because of pricing.
- External factors such as border closures, airline restrictions, vaccine updates are unpredictable.
Just like last-minute travel planning, you must adjust your price constantly and pay close attention to what is changing from a panoramic point of view.
[D] Inventory Distribution
In this scenario, dorms are harder to sell. However, you could distribute your inventory by transforming, for example, turning a 4-beds dorm into a family room. Is clear that guests are avoiding crowded spaces, reducing your dorm capacity could also be a plus.
LONG TERM STAY AND CO-LIVING CONCEPT
An aspect noticed from the lockdowns around the world is the trend to work remotely. Many companies have decided to shift from a home office model to allowing employees to work from anywhere. This new way of working has proved to be efficient and is something that has come to stay.
From the business point of view, it saves money as renting offices and investing in infrastructure is no longer necessary. From the employees perspective, it gives a better quality of life by working from home and not wasting precious time travelling to-and-from the offices every day.
Recent researches show that 69% of the remote workers prefer to keep working remotely after the restrictions are over. 20% would like to go to the office twice a week and, 11% wants to switch back to office model.Therefore, geography is not a barrier anymore and, hostels can quickly change their business model to meet the demand.
According to Google trends, the words “co-living” and “digital nomad” have considerably increased after April 2020. The real estate firm Cushman & Wakefield estimates that there are more than 54,000 co-living beds soley in the USA.
The main reasons why customers chose to live in a co-living are convenience, affordability, flexibility and community belongingness. Does it sound familiar? Yes, could also be applied to a hostel hybrid business model to meet this new increasing demand.
In traditional hostels, we already recognize those reasons; the facilities and the community concept. It’s just a matter of adapting and finding the perfect mix between hostel guests and co-living members.
EXPERIENCES
As mentioned before, guests are choosing nature instead of big cities. The same pattern can be observed with experiences.
The numbers from the Bicycle Association’s market data service reveal that, in 2020, bicycle sales increased by 203% year-on-year. Bicycle sales have been booming across much of the world during the coronavirus crisis. Many local and national governments are starting and accelerating plans to give more visibility and benefits for cyclists. The number of customers that also decided to use the bicycle as entertainment during the weekends increased.
We could relate this data with the experiences, consumers are choosing open-air activities instead of closed spaces. Day trips to nature destinations around your location is a good fit for your experience portfolio, and it makes your destination more attractive and increases the guest’s length of stay.
Creating social experiences in a currently antisocial world is another way to be outstanding. People are seeking real interactions, hostels know this better than any other business, but always remember the safety stays protocol.
When talking about co-living, it’s a challenge to create different experiences for long term guests and keep them interested. Workshops, Masterminds and community activities could be a way to involve members.
TECH
Technology will play a huge role in this new scenario. Even before, we could already notice the industry switching to a contactless approach.
A final goodbye for payment in cash. Customers have wide access to contactless payments, such as cards or cellphone transactions. Nowadays, it is useless to carry cash in big city centres, this phenomenon should expand all around.
No more document checks. Airline companies, border controls and hotels are extinguishing the old passport control. Every control process will soon be done electronically; scanning the passport into machines and using facial recognition for your flight check-in. The same will happen for the hospitality industry, you are already able to scan or take a picture from your document during the hostel check-in, avoiding contact in such kind of operations becomes easier and faster.
The QR code came back. Invented in the ’90s, we could see the QR code coming back in different ways during the covid crisis. Restaurants are using it as an alternative menu. Flyers and leaflets have also lost space and are switched over by QR codes.
Smart keys direct from your smartphone. Physical keys are losing space and instead, technologies such as Goki that enables guests to receive their keycode before arrival direct on their phones have taken over. It also gives hostels better control of mapping guests moves and behaviours inside the properties.
Google Hotel is starting 2021 stronger than ever. It allows you to find accommodations from every property that is registered on Google, it aggregates over 200 OTAs and Metasearch with whom they have a relationship, shows prices and availability for direct and indirect channels, and gathers information about locations, reviews and scores.
This gives the customer the option to see the best rate available between all the channels, or to complete the booking process without leaving Google.
“Results can be viewed according to various ranking options, namely by “Best Match” (a default order aiming to give the best trade-off between popularity, ratings, relevancy, and convenience, based on factors such as user ratings, current price level compared to averages, user reviews, or location), by “Lowest Price,” and “Highest Rating,” the latter considering the average ratings given by users.”
We strongly recommend giving special attention to Google Hotels, this channel must be managed independently from the pre-existing ones and it could generate valuable revenue.
COUNTER
Looking through the vast future ahead, we from Counter, want to participate and provide tools to help hostels get ready and fully equipped to receive future guests and meet their expectations.
- Coliving management system
According to the increasing number of properties switching to a hybrid co-living hostel business model, we are developing tools to better manage the long-term reservations, giving a better view of the upcoming calendar, reservations and operations that is easy to view and manage.
- Promotions set up on your booking engine
Pricing properly your inventory is a must to attract the right public on the best booking window guaranteeing the best revenue.
Early birds — give more confidence for guests to book in advance.
Last-minute bookings — as an attempt to sell the remaining inventory and avoid staying with empty beds.
Long-term stay — aiming at the co-living members and offering them a discount for staying longer.
- Experiences management system
Diversifying revenue is vital for the hostel industry, with our PMS it’s possible to manage and sell experiences directly from the booking engine. Cross-selling tours and activities at the moment your guest is booking a bed at your property. It’ll also be possible to sell experiences from third part partners by adding a commission and offering extra services.
- Tech
As mentioned before, from the technological point of view, contactless payments and operations will facilitate and protect your guests and staff.
Counter already offers online and self-check-in, therefore avoiding document checks and facilitating the operation smoothly. It means the staff will have more time to give the desired attention deserved by the guests and eliminate bureaucracy.
Automated payments are available via Stripe and it’s possible to charge automatically from our workspace.
Goki is integrated with counter, enabling guests to check-in and download their keys before arrival. During their stay, guests can virtually meet other people staying at the same time.
- Google Hotel integration
Google will generate a lot of traffic to the hostels and it’ll be integrated into counter.app, managing every reservation and piece of inventory from our PMS.
If you have any questions about this topic or further suggestions to it, please feel free to drop us an email at support@counter.app.
We’ll be happy to talk about it :)
