A business travel revolution6 May 2022
The Covid-19 pandemic changed many aspects of society irrevocably and forever, but will business travel meet the same fate? Jane Pendlebury, chief executive at HOSPA, sees the post-pandemic travel landscape as the opportunity for a new approach.
Is it safe to say we are post-pandemic? Whether or not that is actually the case, it certainly feels that we are moving that way in the UK – especially given that all Covid-19 restrictions have been lifted. Are we all ready for the new, new normal? It will be interesting to watch how, even without restrictions, guest behaviours have changed and I suspect we will not really be able to judge that for a good many years yet.
The opinions of economists are still split on when we will match 2019 levels of business. Predictions vary from this year to as far away as 2026. Of course, there are some who will not get the chance to find out, as they were forced to close during the pandemic. But for those who survived, it is more realistic to look at different segments. It is already well documented that coastal and rural properties were overrun with demand whenever lockdowns were lifted, so much so that some properties were able to report record-breaking revenues and profits. The wise hoteliers worked hard to encourage loyalty in the hope that the levels of demand from the local market will be sustained once international travel opportunities present themselves again. On the flip side, city hotels that, for years, had comfortably relied on international business travellers for the majority of their bedroom sales, were hit harder than most. As demand slowly returns though, the city properties seem to be successfully holding their nerve on rate.
Attitudes towards international travel have shifted over the past couple of years, however. No longer are those road warriors as happy to travel with their heads in their laptops – they are starting to look up and take in the scenery. They are wanting to extend their work trips to spend longer at their meeting destinations, and there are probably many reasons for this. I suspect the time away from the day-in-day-out travel schedules gave them the space to reconsider their priorities. It seems such a waste to visit beautiful locations and not take advantage to soak up the local atmosphere.
Perhaps the 'new' business traveller will ditch the safe options of an in-room burger or sandwich and start to appreciate local produce. Maybe that same business traveller will extend their stay, inviting their family to join them over the weekend. With this potential in mind, the business traveller-focused hotels will need to open their eyes to new opportunities and consider branching out from their traditional offering.
Relying on revenue management
It is already on record that I believe the role of revenue managers flipped during the pandemic. Dare I say again, that some of the city revenue managers were comfortably cherry-picking the demand pre-pandemic, whereas the rural and coastal revenue teams were working more closely with marketing departments to generate demand, especially out of season.
For a while during 2020 and 2021, those who were highly skilled in cherry-picking were forced to learn new skills as they sought to generate demand, which often involved heightened collaboration with their marketing colleagues. Those who rarely had the luxury of cherry-picking, however, were learning how best to choose one piece of business over another – and embracing a new skill in the process.
For 2022 and beyond, I suspect the lines will be blurred further. Revenue managers will become ever more crucial to the success of any hotel business and their knowledge and skills will be stretched to the max. No one will have it easy, but there is plenty of opportunity – it is just a case of making sure it is maximised.
Total revenue management has been talked about for years and now the technology to support it is starting to catch up. Bedroom sales have always been the focus of revenue management systems, but it has always been important to look at the picture holistically. Those business travellers who used to pay a decent rate but only ever ordered a basic meal from room service may now expect the hotel to offer many more options. Those that were grandly entertained may no longer have that opportunity. They may want to stay for longer and may indulge in more of the hotel’s facilities, but may not be charging it all back to head office, as they add a leisure element to their booking. While this may see a reduced weekend rate, the peripheral spend of this activity will hopefully more than compensate for any shortfall.
The pandemic has caused an anomaly in the usual booking patterns, and tourist locations in the UK will not be able to rely on the local demand they have experienced and enjoyed over the past couple of years. However, one of the few positives of the pandemic was the new-found love of the local experience. Many people, having previously dismissed the prospect of a UK-based holiday, have actually had their eyes opened to the many wonderful offerings practically on their doorsteps.
This means that while I am sure many are champing at the bit to go abroad again in the short term, the bumper summers of 2020 and 2021 will not necessarily become a distant memory as holidaymakers may enthusiastically factor in localised breaks in their future plans.
Tech to the rescue
Finally, I am curious to see how much of the technology implemented during 2020 and 2021 will survive. The vast majority of hoteliers seemed to just accelerate the plans they already had for digital innovation. Some groups took bold decisions to swap out back-of-house systems while the operations were quiet, so I suspect they will flourish as business increases.
It is the non-touch tools that may not stand the test of time though. It reminds me of a conversation I had with Andrew Evers of Red Carnation Hotels, who likened the presenting of their leather-bound wine list to their wine-loving guests as a piece of theatre. He said there was no way that ordering wine from an app would ever have that same dramatic effect. I have an inkling that many of the forced technological changes, like the digital wine list, may well be here to stay – but as an option, as a choice for the guest to make, rather than the norm. Choice, simplicity and ease of use are the most important thoughts to keep in mind when planning guest-facing technology.
While we may be approaching post-pandemic in the UK, with all the optimism and positivity that brings, world events elsewhere are ominous, and we must not rule out further blows to our recovery. Much of this though is out of our hands, and we can only do what we can. Hospitality is an enormously resilient sector, as has been ably demonstrated in recent times, and we must continue to delivery the best service we can, in the face of any adversity that comes our way.