Industry Trends

The Lodging Industry Will Recover—Here’s How

Aug 23, 2021 • 8 min read
Mother and two daughters look excited as they enter their hotel room
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      When will the lodging industry recover to pre-pandemic numbers? The predictions vary widely.

      McKinsey suggests it may take until at least 2023, although economy lodging—used frequently by worker segments like truck drivers—may recover sooner. Morris SE Group agrees that some lodging businesses will recover sooner than others, especially those within driving distance of a big city that can persuade travelers to stay with them rather than friends or family.

      Given that the lodging industry’s overall recovery is interwoven with the recovery of air travel, it’s good news that TSA reported airline travel over the 4th of July weekend surpassed 2019 levels.

      Guesses aside, the travel industry will recover—people want to escape their homes, meet up with loved ones, and explore new locations. Fortunately, you can take the steps now to get your lodging business back to a perpetual “no vacancy” state.

      Make Your Customers Feel Safe

      Safe is the new baseline expectation. Deloitte says, “Resilient organizations understand that recovery is a human and multi-dimensional experience that requires trust and confidence. These involve physical safety, emotional support, digital security, and financial stability.”

      Chart about customer trust

      Source: “The future of hospitality,” Deloitte.

      How does that translate to your lodging business?

      Physical safety means exceeding customer expectations for cleaning and safety protocols. An empty hand-sanitizing station doesn’t tick that box. A bathroom door that requires touching the handle to open it? Old-school. Any touchpoint that can be digitized—payment options, check-in—should be.

      Digital safety means not only using digital tools but also following security best practices. Safeguard your customers’ information from hackers via every method possible, including using a firewall and strong passwords.

      Emotional safety translates to doing what you say you’ll do. If you advertise that you participate in the American Hotel and Lodging Association’s “Safe Stay” initiative, follow all of its guidelines to maintain your guests’ trust.

      Financial safety has expanded beyond price guarantees to include flexible cancellation policies that won’t saddle guests with a hotel bill for a room they don’t use.

      Reimagine the Customer Experience

      Digitizing pieces of the customer experience means that you’ll have to find new ways to reintroduce a personal touch back into the lodging equation.

      As Deloitte says, “The key for all hospitality organizations will be to strike the right balance between technology-enabled self-service and the need or desire for human interaction in service-based offerings.” Lodgers may expect a mobile check-in option, but they still want your smiling face suggesting the best spot for a martini.

      You could revamp your customer loyalty program to help with the customer experience. In addition to rewarding repeat customers, your loyalty program could partner with a local restaurant to offer a birthday package.

      Monitor trend forecasts to adjust your operations and marketing pitches accordingly.

      Business travel may be slow to return, but it’s revitalizing with the workation trend—an employer-sponsored combination of business and vacation travel. Companies are bringing remote team members together in a vacation destination to bond face-to-face.

      Deloitte predicts staycations—where people drive a short distance to “get away” without taking time off of work or spending big bucks—will remain a leisure travel trend.

      Revise Operational Procedures

      Business as usual is out the window—it’s time to embrace new operational procedures.

      First, proper bookkeeping is a must. Sunrise helps you gain a clear view of your business, while a Sunrise bookkeeper may cut your bookkeeping costs. Once your bookkeeping is established, run key reports routinely to know your revenue and expenses.

      Second, you’ve learned a few things during this pandemic, so update your business resilience plan. Consider including how to integrate an agile workforce that uses freelancers to quickly implement cost-saving measures when needed. You may also want to develop ideas for alternative customer markets (e.g., replacing evacuated tourist revenue with emergency utility worker revenue instead).

      Third, your ideal customer is a long-term one, so focus on relationships, not short-term revenue. EventMB suggests making cancellation fees obvious and encouraging rebookings over cancellations. A recent personal experience at a B&B did just that—a medical emergency required the owners to cancel onsite breakfast. Hence, the inn owners offered the option for customers to receive either a no-charge room cancellation or a $25 refund to cover the cost of purchasing their own breakfast.

      Fourth, decide if your marketing tactics need to be modified. Maybe it’s time to offer a new pricing structure to meet your customers’ expectations—or perhaps you can get customers dreaming about your location. During the pandemic, tour operators used social media and virtual tours to keep their customers engaged during lockdown. A livestream of the sunset from your courtyard might entice customers to book now.

      Fifth, help customers find you by implementing local SEO on your website and completing your “Google My Business” account—this way, you’ll appear in search results when travelers search for lodging options “near me.”

      Seek Collaborative Partners

      Collaborate, collaborate, collaborate. People don’t choose a destination simply based on lodging alone. They want the whole enchilada—a place to stay, a spot to eat, and things to do.

      Ante up the fees to join small business associations, especially your local chamber of commerce. These networks could give you partners to recommend—perhaps your lodging customer is a remote worker who also needs access to a nearby coworking space.

      Trails are a collaborative tourism goldmine. Any trail in your area—greenways, bike paths, or paddle trails—should be cross-promoted with other businesses to create an eat-stay-play package. Need more convincing? The East Coast Greenway Alliance reports that completing its trail in the Philadelphia area could result in $840 million in annual tourism benefits.

      Whether you’re currently hanging your vacancy or no-vacancy sign, these tips will help you recover and expand your lodging business.

      About the author
      Katherine O'Malley

      Katherine O'Malley is a contributor to the Lendio blog. A technology geek at heart, she splits her time between traveling, freelance writing, database administration work, and implementing SEO on her travel blog. In her free time, she loves to research the challenges small-to-midsize tourist suppliers face and find ways that technology can help them out.

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