International travel bans shut off all international bookings in hotels and other accommodation providers around the world for weeks on end. So how are these businesses surviving, and how can they mitigate risks to their business going forward?
In this article, we look at how some accommodation providers are mixing it up to bring in revenue. In many countries, there are a few strategies at play to keep businesses in the hospitality sector from insolvency.
Governments with their respective tourism industry representatives are promoting domestic travel to get their population out and about, travelling nationally, staying in accommodation and supporting local hospitality service providers, e.g. restaurants, sightseeing tour operators.
In part, this strategy is working with attractive advertising and heavily reduced accommodation rates. However, this strategy alone will not keep all accommodation providers in the business. Booming international tourism is why there are a plethora of hotels, motels, Airbnb rooms so what more can be done?
The time has come for businesses in accommodation to think outside the box, so their real estate has higher rates of occupancy. The weekends may house domestic travellers however during the workweek, there may be very few room bookings so here are some ideas for repurposing the rooms during the quiet times.
14 Day Quarantines
There is an immediate calling for properties to house people who need to go into 14-day quarantine. In many circumstances, Governments are paying the bill to put up citizens who have to go into quarantine if they are high risk, or already have COVID-19. Therefore hotels and other accommodation providers have put their hand up to provide this service.
Tight quarantine rules require the room inhabitants to stay put for almost 24 hours a day with food delivered and left outside the door. There is no interaction between the persons in quarantine and the accommodation staff. Replacing used towels is doable, but bedding is not collected and replaced during the quarantine. Luxury accommodation is available too.
Some hotels and motels may allocate some but not all their rooms for this service. If those in quarantine are allowed out of their room, for their physical exercise, they must take precautions including wearing masks, gloves and keep to the social distancing rule of up to two meters. Their moments are tracked too, so all contact with other people is traced, so if there is a new community transmission of Coronavirus, it’s source can be identified.
The quarantine service is putting revenue into the coffers of accommodation providers. With the need to quarantine returning citizens, this service may go on for many months if not years.
The managed or self-isolation requirement is another opportunity for accommodation providers. Travellers and returning residents and citizens have to self-isolate for 14 days. If they have not lived in the country, they will not have their accommodation, so hotels and motels are competing with discounted room rates and packages. Not all people want the cheapest room and service, so there are luxury packages available too.
The big question in the minds of the tourism sector is, will life return to what it was pre-pandemic? Will people when given the all-clear, flood the travel booking sites and travel as much and as often as they can? There is no definite and sure-fire answer as the future is unknown, so, like all businesses, accommodation providers have to mitigate risk with more service options to keep the revenue coming in. Here are some ideas they can explore.
Short Stays – Social Housing
Offering some rooms or entire floors to housing homeless people on the Government purse is one option for motels and hotels.
While the UK Government have pulled the pin on their ‘everyone in‘ initiative, other nations are seeing the value in keeping homeless people off the streets.
Some states in the USA have successfully housed homeless people in accommodation during the lockdown.
In New Zealand, it’s been a successful initiative that has stemmed from the Government’s use of motels for social housing. During the housing crisis in New Zealand, people without no fixed abode either lived in their cars or rented garage space as living quarters.
The New Zealand Government turned to motels to house the people on their waiting list for social housing. Using motels was meant as a short term solution which has turned into months and now some motels used for social housing would go of business if they didn’t provide this service.
Plus the building of thousands of new homes, is happening fast enough so the NZ Government has been purchasing motels for social housing. So therein lies the other option for accommodation providers – cut your losses and sell up.
Refit As Home Offices
With remote working now the new-normal workers need to replicate their workspace set up at home. For renters, and homeowners short on space, there is a need for external ‘home-office’ space.
The home office is needed during the workweek so that local accommodation providers could provide a ‘home-office’ service on affordable day rates. For example, one room repurposed as a stylish home office could be shared throughout the week or ‘hot-desked’. If successful, accommodation providers could purposely refit an entire floor to home office spaces. Never again would that Zoom call show a dishevelled background while the worker is working off the dining room table with a backdrop of the kitchen! The purpose-built home-office room would have the zoom video conference background that screams style and professionalism.
The creators among us are sure to come up with more ways to earn revenue from repurposing accommodation so we’ll keep on the case and report on them in a future blog post.
Accommodation providers are in unknown territory now international travel is and will remain stifled by COVID 19 requirements for many months if not years to come. There is no way to escape poor financial trading post-pandemic so owners must engage in lateral thinking and exhaust ways that can improve occupancy rates of their properties to survive.