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Having A Backup Plan

It should come as no surprise that with U.S. hotel occupancies plummeting in the wake of the Coronavirus business has come to a screeching halt for both meeting planners and hotel sales teams alike. As such, experts say postponing large meetings rather cancelling them altogether as well as a focus on smaller, local meetings will be critical in the weeks and months to come.

The importance of rescheduling events to ensure future business for hotels was among the takeaways of a webinar from Florida International University entitled “COVID’s Impact on Small Businesses.”

According to Dan Cormany, lead professor of events management, FIU Chaplin School of Hospitality and Tourism Management, some 2,500 trade shows and business-to-business events were scheduled between March 1 and May 15 in the U.S. The cancellations as of March 15 resulted in between $2.3 billion and $3.6 billion in lost revenue for show organizers. He added that one of the groups most affected by the loss of trade shows are associations.

Heather Harrington, A-Plus Meetings & FIU Events Program Advisory Council board member, further emphasized the benefit of postponing while pointing out there could be lots of pent-up demand as a result.

“We are encouraging clients to postpone and what we are finding now is that a lot of people are moving things to September. They’re hoping by the fall that things will be back to ‘normal,’” she said.

Harrington noted that will likely apply to next year as well. “We’re finding that the hotels are getting very booked up already for next spring. So people are already looking to next year to be back to normal and move ahead with what they want to do, “ she said.

Nevertheless, when it comes to the sales efforts from hotels clearly there has to be a change in the approach with more of a focus on local, according to Kristi White, vp, product management, Knowland, a provider of group hospitality analytics for hotels, convention and visitor bureaus, conference centers and other meeting venues.

During a webinar entitled “COVID-19 Preparing Today For Success Tomorrow,” White offered her prognosis on the interruption of business.

“It will get worse before it gets better. Cancellations will continue for the next several weeks and maybe a little bit longer and then things are going to start to stabilize,” she said.

White went on emphasize the importance of having hotel sales teams educated on how to prospect for business, particularly locally.

“For the past 10 years our industry has achieved unprecedented growth. Most of today’s sales teams don’t even know how to do anything but book what comes in the door,” she said.

White further noted that dealing with cancellations is foreign territory for many sales teams as well. “They aren’t equipped to handle a mass influx of cancellations. It’s incumbent on leaders to give them this tool. Teach them to be empathetic in how they accept the cancel because companies will remember who handled it well and who handled it poorly,” she said, later urging hoteliers to “be as flexible as possible.”

White, meanwhile, revealed the results of a Knowland survey of 700-plus hoteliers in late March. While 70 percent acknowledge they have had 75 percent plus cancellations over the next 90-120 days, 50 percent of participants indicated that they are not planning to close their hotels and were “staying the course” during this time.

In addition, some 50 percent of survey participants conducted local sales outreach earlier this year, which is up from 38 percent in 2019.

White underscored the point noting that large meetings with RFPs are at likely at least 9 months away. “That’s why I’m recommending everything right now is focused on your local business because that’s where it’s going to come from,” she stated. White correlated those local relationships to the recovery and noted they “will jump-start that process.”

She went on to tout the long-term impact of smaller meetings for hoteliers. “When the recovery happens you may not get the bigger 100- to 200-room groups, it may be more in 30- to 50-room category. You’ll need to string several of those together to equal what you had in the past. Be patient about that and make sure you get understanding and buy-in from above property,” she said.

But taking the business at any cost is not a good idea, according to White, who stressed the importance of holding the line on rates and a longer-term approach.
“Panic is what your enemy is. Fear is driving rate and rate can’t trump fear. Manage to the next 30 days, 90 days and 120 days. Holding the course now will make the recovery that much easier,” she said.

When it comes to any type of meaningful recovery, both experts expressed confidence that it is not a matter of if but rather when.
“I will say that this is a very resilient industry. Travel and tourism has come back time and time again after disease, terrorism, and natural disasters. We are positive that things will get back to good,” said Harrington.

White also offered some words of encouragement to hoteliers.
“When everything seems to be going against you remember that the airplane takes off against the wind not with it. We are having very serious headwinds, keep pushing through it and eventually you will soar again because that’s what our industry does,” concluded White.

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