Hospitality industry in crisis

How will Covid-19 boost change and innovation?

The current situation is having an enormous impact on the hospitality industry worldwide with Coronavirus hitting the beating heart of every hotel! Most hotels are closed down with hoteliers being unsure of what to expect after the crisis.

Their customers are developing new habits and new ways of staying connected in business and private life. Many challenges are being seen on the horizon but also brand new opportunities in the New Era AC-19 (After Covid-19). Hotel owners are required to create new strategies that will help them ‘Navigate the Storm’ and get out of the crisis like winners. Given the fact that we cannot predict the duration and scope of the crisis, we cannot but ask ourselves: Who will be the guest of the New AC-19 Era? And how this will impact and change the Hospitality Industry?

Traveler of the New Era AC-19

Survey results

Habits and needs of traveler of the New Era AC-19

The New Era traveler has created several new habits and needs that are changing the way he chooses, lives and appreciates the travelling experience:

The New Era traveler has created several new habits and needs that are changing the way he chooses, lives and appreciates the travelling experience:

  • First, he has rediscovered the pleasure of being HOME that has become together with family the centre of his interests! HE NEEDS a very good reason to Travel!
  • Hygiene and “fast connection” are simply REQUIREMENTS when it comes to selecting hotels and restaurants!
  • This new attitude is also guiding the way he chooses his destinations: Less Adventure! Especially in dangerous countries! In the immediate crisis, he will also try to avoid those countries (as China, Italy, Spain, France, USA…) who have been severely impacted by the virus.
  • He is also avoiding crowded places: More mountain and Less seaside! Less capital cities and More NATURE!
  • Connecting with family and friends stays as the main reason for travelling.
  • He is working - at least partially – from home and he travels for business ONLY when strictly necessary!
  • He is creative and constantly in search of new, innovative things to see and experience. He is seeking Magic Moments!

Implications for Hospitality industry

The current pandemic has forced an immediate shut down of the operations in the Hospitality Industry while it is also expected to be among the last to start over. On top of it, this long period is helping the customer to cement his own new habits and needs!

Lots of uncertainties in an Industry that represents a pillar of the real GDP in many countries and it is now showing its structural limits:

Highly fragmented with the majority of the operators who are leading a single hotel; the crisis will drive a market consolidation with only 70-80% of the operators that are expected to survive. Big Chains with solid financials will have the opportunity to strengthen their market position in strategic geographies via M&A!

Lack of managerial skills: many hotel operators closed down, postponed all investments, resized the structure, cut costs, and waited for the crisis to pass. Very few stayed close to employees and suppliers, upgraded the digital platform, and redefined the strategy in line with new customer needs. These (20 to 30%), will be likely to experience a good new beginning.

Overall, it is expected a structural market contraction of more than 20%, even though it prevails a general optimism about the industry's capabilities to rebound.

Implications for industries related to Hospitality

The crisis in hotel and restaurant sectors, as a consequence, has generated a domino effect on other market participants such as tour operators, travel agencies, furniture manufacturers, interior designers/architects, etc. Also, the overly present Booking and Airbnb seem to be in trouble!

As for Hospitality, a substantial reduction of the market participants is expected with closures and mergers.

To face the moment, we believe there is NO SPECIAL RECIPE, if not to:

  • KEEP MOVING and STAY UPDATED on new trends and possible evolutions of the crisis.
  • Start thinking strategically about the post-CV-19 period.
  • And above all, STAY CLOSE to CUSTOMERS, becoming their confidants, strategic advisors and in case of need also real psychologists! It's time to invest and secure relationships! As always, the most effective way of releasing the pressure is to share it with someone who understands your situation and shares your destiny!

As a dear friend wrote in an article on Retail Banking:

"TIME TO HIT THE ROAD. ON 2 WHEELS OF COURSE!''

See a more detailed analysis of our survey findings in the exhibit below!

20
May
2020
Source: GV Consulting
Published:
20/05/2020
© 2018 - 2021 GV Consulting. All Rights Reserved
The Hub of Excellence
The Hub of Excellence
Hospitality industry in crisis
20
May
2020

Hospitality industry in crisis

How will Covid-19 boost change and innovation?

The current situation is having an enormous impact on the hospitality industry worldwide with Coronavirus hitting the beating heart of every hotel! Most hotels are closed down with hoteliers being unsure of what to expect after the crisis.

Their customers are developing new habits and new ways of staying connected in business and private life. Many challenges are being seen on the horizon but also brand new opportunities in the New Era AC-19 (After Covid-19). Hotel owners are required to create new strategies that will help them ‘Navigate the Storm’ and get out of the crisis like winners. Given the fact that we cannot predict the duration and scope of the crisis, we cannot but ask ourselves: Who will be the guest of the New AC-19 Era? And how this will impact and change the Hospitality Industry?

Traveler of the New Era AC-19

Survey results

Habits and needs of traveler of the New Era AC-19

The New Era traveler has created several new habits and needs that are changing the way he chooses, lives and appreciates the travelling experience:

The New Era traveler has created several new habits and needs that are changing the way he chooses, lives and appreciates the travelling experience:

  • First, he has rediscovered the pleasure of being HOME that has become together with family the centre of his interests! HE NEEDS a very good reason to Travel!
  • Hygiene and “fast connection” are simply REQUIREMENTS when it comes to selecting hotels and restaurants!
  • This new attitude is also guiding the way he chooses his destinations: Less Adventure! Especially in dangerous countries! In the immediate crisis, he will also try to avoid those countries (as China, Italy, Spain, France, USA…) who have been severely impacted by the virus.
  • He is also avoiding crowded places: More mountain and Less seaside! Less capital cities and More NATURE!
  • Connecting with family and friends stays as the main reason for travelling.
  • He is working - at least partially – from home and he travels for business ONLY when strictly necessary!
  • He is creative and constantly in search of new, innovative things to see and experience. He is seeking Magic Moments!

Implications for Hospitality industry

The current pandemic has forced an immediate shut down of the operations in the Hospitality Industry while it is also expected to be among the last to start over. On top of it, this long period is helping the customer to cement his own new habits and needs!

Lots of uncertainties in an Industry that represents a pillar of the real GDP in many countries and it is now showing its structural limits:

Highly fragmented with the majority of the operators who are leading a single hotel; the crisis will drive a market consolidation with only 70-80% of the operators that are expected to survive. Big Chains with solid financials will have the opportunity to strengthen their market position in strategic geographies via M&A!

Lack of managerial skills: many hotel operators closed down, postponed all investments, resized the structure, cut costs, and waited for the crisis to pass. Very few stayed close to employees and suppliers, upgraded the digital platform, and redefined the strategy in line with new customer needs. These (20 to 30%), will be likely to experience a good new beginning.

Overall, it is expected a structural market contraction of more than 20%, even though it prevails a general optimism about the industry's capabilities to rebound.

Implications for industries related to Hospitality

The crisis in hotel and restaurant sectors, as a consequence, has generated a domino effect on other market participants such as tour operators, travel agencies, furniture manufacturers, interior designers/architects, etc. Also, the overly present Booking and Airbnb seem to be in trouble!

As for Hospitality, a substantial reduction of the market participants is expected with closures and mergers.

To face the moment, we believe there is NO SPECIAL RECIPE, if not to:

  • KEEP MOVING and STAY UPDATED on new trends and possible evolutions of the crisis.
  • Start thinking strategically about the post-CV-19 period.
  • And above all, STAY CLOSE to CUSTOMERS, becoming their confidants, strategic advisors and in case of need also real psychologists! It's time to invest and secure relationships! As always, the most effective way of releasing the pressure is to share it with someone who understands your situation and shares your destiny!

As a dear friend wrote in an article on Retail Banking:

"TIME TO HIT THE ROAD. ON 2 WHEELS OF COURSE!''

See a more detailed analysis of our survey findings in the exhibit below!

Source: GV Consulting
Published:
20/05/2020
Share:
20
May
2020
© 2018 - 2021 GV Consulting. All Rights Reserved
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