Customer Experience for Hospitality Sector in the Covid-19 crisis
Updated: Nov 17, 2020
In many of my conversations with customers and partners during this Covid-19 crisis, many businesses have halt their plans/initiatives in the short term, to observe updates and to predict what is going to happen.
One of the industries which will be impacted most is the hospitality/tourism industries, especially when countries shutting down their borders. Airline companies have cancelled their flights to reduce cost. Some hotels have or are planning to cease operations. Many also reacted by hiring freeze, unpaid leave for employees, shelving away initiatives, and reducing expenditures.
What we have learned
The current Covid-19, SARS in 2003, MERS in 2012, and many other pandemics outbreaks in human history has not only killed millions, but also cause huge economic disruptions globally. Covid-19 may be more comparable to SARS in 2003. The SARS epidemic affected mostly in Asia. The industry suffered significantly, however the hotels occupancy had largely recovered within a few months of the crisis passing.
Just like every outbreaks, it will likely get worse before it gets better. The hospitality industry has been through crises before - and proved that many hotels that made strategic decisions will come back stronger in the long-term. When restriction around social distancing and travel are lifted, brands will need to get down to business. Understanding the cycle does give some thoughts and insights for businesses; Do we want to be prepared to catch the wave? What does it cost us to be prepared or the impact of not to? What do we do now?
In this crisis, all hotels will definitely face low occupancy. But research data shows that there is a positive correlation between marketing expenditures in times of crisis like this, and benefit gains beyond the short term. And all decisions should be taken with a view to the long-term view of the business. For example: a hotel customer in Thailand has close down some hotels temporarily, but continues to invest in customer engagement.
In fact, many hotels, especially those in Asia, are making adjustments in their strategies such as investing in digital marketing/customer engagement. This may be the right moment to spend on marketing and advertising. What is critical is that the marketing spend is in the right place, targeting at the right audience, and sending out the right message.
As the quarantine and social-distancing continues, we will rely on digital channels more than ever. However, this pose a good opportunity for brands. To care for people and offer help, remain calm and flatten the curve, while building brand awareness and fostering engagement through digital channels.
A few thoughts from observations and conversations:
As anxiety grows, many turn to social media not only to consume news updates, but also to connect with friends and family. Coupled with COVID-19 induced quarantines and closure of public venues have inevitably led to an increase in social media usage.
Listen and monitor conversations about COVID-19, and combining these interactions can help to understand how your brand, competitors and products are affected by consumer perceptions.
Transparency of information helps in brands to build such as trust and accountability. Thus, It is important to provide assurance to existing and potential customers by communicating a prevention plan in place. Acknowledgement of the government guidelines and necessary precautions taken will reassure your audience and strengthen confidence in your brand. Share honest and clear information on your current status during this critical period across all channel such as social media and emails, directing them to a dedicated webpage for more information.
Many hotels have spent huge efforts to build close relationships with their existing customers. This is the time where digital marketing and communication are critical in continuous engagement with them (even when they are not able to book a stay with you).
No doubt that travellers will delay making decisions about travelling. But they do want to and will travel again. So for now, instead of spending efforts on TOFU demand gen activities, we can look at target at leads that already exist; such as customers that have already visited your website, and focus on converting these hot leads into a sales.
What can you offer for travellers who recently cancelled their reservation? How about offering a return voucher to encourage rebooking when the situation recovers or offer additional perks such as room upgrade, free transfers or dining credits for flexible postpone terms instead of cancellation.
Pre-purchase vouchers works like a “Buy Now, Stay Later” approach, which offers extra savings and flexibility can be an attractive offer to retain customers and it provides hotels with guaranteed revenue now and later when business is back to normal.
Change in target audience
With increasing travel bans by countries, there will likely be a change of demographics in your target audience. Digital marketing efforts should now be focused on those who are available to travel. Perhaps it is time to focus on domestic travellers.
Marketing to local markets and promoting staycations can potentially combat occupancy issues by reaching locals who are looking to get out of the house, they may be open to a local getaway and willing to spend more than usual due to limited travel options to other destinations. Consider including dining credits, complimentary spa services, late checkout or exclusive experiences in the staycation package.
E-Commerce - reservation abandonment strategy
Direct booking and reservation abandonment are critical during times of crisis. Your website should also have a strong reservation abandonment strategy in place to ensure you are recovering as many direct bookings as possible. It is important to focus on your most cost-effective booking channels. Ensure that direct booking perks are prominently displayed throughout your website and amplified through all your social channels.
Consider applying and displaying auto discounts during the dates and rooms selection segments. Remarketing to web visitors who did not make any purchase with exclusive and personal offers, based on the browsing history.
How you engage with your potential and existing customers is more important than ever. Customer analytics has been a top priority for most businesses. Customer personas, expectations, needs, and journeys will shift and it won’t be business as usual.
If you are utilising personalisation technology, real-time personalisation can be done easily on the fly. You can consider adding personalised message for local markets focused on staycations offerings, spa packages or dining offers.
If you are not, maybe it is time to rethink your digital strategy.
In our era of instant gratification, personalisation is more important than ever as consumers have access to content from multiple channels. Consumers expectations have shifted to a point that people expect a personal digital experience that mirrors the level of personalisation they have received offline. Many have grown accustomed to personalised experiences from their news feed, social network, and shopping recommendations.
A personalisation strategy allows you to identify segments of visitors with distinct preferences or needs, then create targeted experiences for them. Personalisation can increase engagement and loyalty by delivering messages that are tuned to what customers really want. Many business have named personalisation as a top commerce technology investment priority in order to improve their product offerings.
Market to loyal customers
Loyalty means trust, and marketing to loyal customers who have a strong relationship with your brand is critical during times when people are anxious to travel. But how much do you know about them?
Understanding our customer profiles allows us to reciprocate engagement and intelligently re-target at our loyal customers. However, marketers often do not have full insights into customers profile as data often resides within each department or systems.
When customer data is siloed into different systems, channels or departments, it is impossible to accurately understand the size, behaviours of your customer base. Without these insights, marketers cannot use data to connect with customers in an engaging and effective way.
Engagement with your customers involves coordinating and personalising customer experiences across channels and this requires a unified customer data. By centralising these data make it actionable. And if we are able to put a layer of machine learning algorithms on your data, you can provide the 1:1 personalisation on any channel with your customers, giving them experiences they expect and crave.
Without a unified view of the customer, important business KPIs such as customer lifetime value or return on ad spend cannot be accurately measured. Marketers cannot effectively activate data for marketing campaigns, and customer experience can be negatively impacted.
Leveraging on technology requires understanding on your digital maturity today, and a gap analysis on what will be your end goal like. I will leave it to a separate discussion, but in short, treat existing customers, like existing customers.
Preparing for the road to recovery
There is going to be tremendous competition. The target audience which we have been marketing to may have changed. There may be still guests who are buying, but perhaps not through the ways we usually expect them to. Their decision process will have changed. Not maintaining contact with your customers now will make you much more vulnerable to them switching to your competitors when the bookings start again.
It is vital to have a 360 view of understanding how are your customers engaging with you today, and how do you continue to engage and communicate with the customers, and addressing their immediate concerns and needs can strengthen confidence in your brand. Identify areas for improvement and evaluate efficiency of current operating structure are key factors in delivering better customer experience. Technology that is capable of processing, augmenting and analysing data can speed up this process by providing actionable insights and identify gaps for quicker assessment and success.
The hotel industry has gone through and have recovered from crises before. Hotels will see a dramatic increase in demand when the crisis is over. There will be a recovery and for now, we need implementing a planned digital marketing / CX strategy, and leveraging on technology to execute, and continue to engage with your customers. We need to be ready for this bounce back by thinking of new initiatives now, not only to drive immediate revenue to surviving the crisis, but also coming out stronger.