A Silver Lining Among the Clouds?

Clouds over a cityscape

The outlook for the industry has gotten a bit brighter this week now that Pfizer announced their COVID-19 vaccine has a 90 percent efficacy. However, the wait for the company to complete the necessary safety protocols—and the even longer wait expected for meaningful distribution and availability—means that the majority of consumers will most likely continue to put off travel planning until the second quarter of 2021.

To bridge the gap in the meantime, hoteliers must continue to be diligent with their health and safety procedures to ensure guest trust—particularly given that the United States recently surpassed 10 million cases of COVID-19 and the surge continues.

Magid recently concluded its most recent COVID-19 Hospitality, Leisure and Travel study. On the surface, the results have not changed significantly over the last six months. Occupancy is projected to be down 27 percent over the next 12 months, representing room revenue losses of $70 billion. This does not include food and beverage, meeting space, or other revenue-generating sources.

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One explanation for travelers’ reluctance to engage with hotels is a lack of trust. Fifty-three percent of respondents believe COVID-19 is “easily spread” in hotels. The percentage who have a “good amount” or “complete” trust in hotels currently stands at 40 percent. This percentage is virtually unchanged since the first wave of the study in April, where the percentage stood at 42 percent for hotels. While there is a slight decline, the difference is not statistically significant.

The fact that the needle is not moving, despite all the time, effort, and financial investment in upgrading health and safety protocols, is discouraging. However, there are some signs that guests are noticing the efforts being made.

The percentage who “agreed” or “strongly agreed” with the statement, “I trust hotel rooms are sanitized/disinfected between guests,” jumped from 43 percent to 55 percent within the past two months.

What is it, then, that is contributing to high amounts of distrust? Generally, it is the belief that other travelers will not “follow the rules” and observe health and safety standards. Nearly 6 in 10 don’t trust others to wear masks in hotels’ common areas. There is a good reason for this mistrust, as the percentage that refuses to wear masks in public spaces within hotels has risen in the past two months from 19 percent to 28 percent. When asked who is most at fault when guidelines and protocols are not followed, people blame their fellow travelers over the hotel by a three-to-one margin.

These observations are likely frustrating for hotel owners and operators as they do not like playing the role of “mask police” with guests. However, the Magid study shows that guests want hotels to err on the side of stricter enforcement rather than more lax enforcement. In fact, there is a direct relationship with doing the basics well that is linked to the likelihood of guests to reengage with the industry.

The Magid study shows that those who have recently stayed at a hotel express very high levels of satisfaction with their experience. The most important finding is that 42 percent said their recent experience makes them more likely to stay at the same hotel again, while only 14 percent say it would make them less likely to stay. The fact that people are having positive experiences reinforces their trust levels and makes them more comfortable with reengagement.

One other key finding is that the perception that the pandemic will “make prices more affordable, making me more likely to book” rose from 28 percent to 42 percent in the past two months. This news is certainly mixed for hoteliers. There is a growing expectation that hotels are so anxious to fill their rooms and will offer extra attractive rates. While this is problematic given that lower occupancy and high operating costs already cut into profits, offering attractive values to get people to try a hotel might not be a bad idea—especially given the very high levels of guest satisfaction and the potential for positive word of mouth.

Until a COVID-19 vaccine becomes widely available, it is particularly important that hoteliers continue to make every effort to incentivize consumers to take a chance, get out of their homes, and back on the road again. Offering great value and demonstrating seriousness about health and safety protocols—and a willingness to enforce them—represent the best opportunities to help bridge the gap.

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