Greece’s tourism sector is in big trouble over the COVID-19 pandemic. With more and more countries instituting level 3 travel advisories for Europe, the country’s early tourism season is badly affected. Just emerging from a horrendous economic crisis, Greece offers us a litmus test for worldwide destinations in crisis. What needs to happen now is pragmatic action to help businesses recoup once COVID-19 is finally pushed back.
Let me begin by saying that officials here in Greece are doing a marvelous job attempting to be proactive with preventative measures to protect the public. It’s fair to say the public sector is up to speed with most of the rest of the world in this regard. That said, many in the private sector in Greece and across Europe are kicking themselves in the head with knee-jerk reactions to the pandemic.
The news that TUI has suspended all prepayments and hotel contracts is a looming catastrophe for hoteliers here on Crete. As I said in previous reports, TUI is but one crisis away from following Thomas Cook down the drain. So, what’s needed is advanced contingency planning, early implementation, and an overall more flexible and agile market approach.
Out of An Abundance of Caution
In light of the uncertainty, confusion, and panic ensuing over the COVID-19 pandemic, to help my Greek colleagues orchestrate better outcomes in the coming months, I’ve contacted some of the world’s foremost experts in disciplines from hotel and destination marketing, Greece’s public sector, former World Economic Forum board members, and other disciplines. In telephone and Skype conversations over the last few days, the grim situation for Crete hoteliers and tourism operators has come into sharp focus.
Management teams are preoccupied with survival and short-term fixes. Nobody I speak with is thinking strategy beyond the current disaster landscape. The strategy right now is reactionary and damage control. After my 12th conversation on this with hospitality colleagues, I contacted Woody Wade, author of Scenario Planning: A Field Guide to the Future (Wiley, 2012), and a former member of the Executive Board of the World Economic Forum. I asked Woody about how decision-makers here in Greece can get a grip on the situation. Here’s what he had to add:
“Given that no one has the time or appetite for a full-blown workshop or summit to try to get a handle on strategies right now, I would suggest stakeholders engage in interactive scenario generation in order to play out COVID-19 scenarios into late 2020 to 2021.”
What Woody proposes are max 2-hour remote sessions he would conduct in order to walk managers through an accelerated scenario generation process based on their specific situations. According to the author of Hotel Yearbook 2036, hotels and other businesses following his proven methodologies would then collectively develop the contours of 4 plausible operational scenarios for the near to mid-term. Woody says these sessions could be set up at a moment’s notice.
“Dos and Don’ts”
Speaking of proactive in the face of industry chaos, when I contacted my colleague Tomasz Janczak, who’s Head of Demand Generation for Guestline for his insight I was actually stunned to discover his company had already created a Hoteliers Coronavirus Information Hub. The UK company is a leader in software solutions for hotels in Europe. They are also offering free webinar sessions, focused on ways to minimize disruption for hotels during this trying time. Guestline offers advice on developing cancellation policies, rate management, and other “best practices.” I asked Tomasz to share some of his company’s strategies.
“Working in hospitality, we are used to the odd curve ball every now and again, but no one could have been prepared for this latest blow. Coronavirus, COVID-19. The hospitality industry has always been creative in finding ways to fight crisis situations, and already we see several initiatives from worldwide where the community is pulling together.”
Guestline and company’s partners like IDeaS, Duetto, and Net Affinity are also sharing actionable guidance on reducing the impact with tips on rates, revenue management, discounting, upsells and events collected from around the globe.
Some businesses are hurting their reputations with big and small missteps like doubling down on advertising and willy-nilly marketing that is untimely and brand negative. One case in point shows companies lagging behind the curve. Even on the international level, there’s a lot of variation in the procedures and policies of travel companies. For instance, many cruise lines have voluntarily canceled cruises for a term, posting informational announcements and canceling some of their ads. Others, like Royal Caribbean below and TUI, seem to downplay the COVID-19 issue. While most of the cruise lines are ready to book you in May, many shy away from seeming opportunistic.
I read a story today from my old friend Pete Cashmore’s Mashable that illustrates how even the best companies are stumbling over COVID-19. This report bashed Hotels.com and elevates Airbnb to the stratosphere where cancellation procedures were concerned early in the crisis. The story turned out okay for Hotels.com because the Mashable contríbutor ended up getting a refund. The problem was the OTAs preparedness. COVID-19 hit almost everybody unawares. At the other end of the corporate spectrum, some companies just don’t grasp the hurt in this situation.
Take the page below. I am sure that as the Italian coronavirus death toll climbs. “Cruise with Confidence” will smack many people between the eyes? I stumbled on this on account of MSC Cruises being shoved down my throat from one of their resellers after I investigated them for my MSC Opera story. Thankfully, the third party seems to have canceled their YouTube ads for now. Today, the news that Italians are singing songs from their windows to lift spirits during the lockdown, should remind even corporation CEOs that our humanity is what fuels everything.
Softly Into the Night
One agile software company already providing advice for hotel clients is Avvio. I remembered the company’s CEO Frank Reeves from a conference we met a couple of years back. I asked Frank about how hoteliers are going to survive during the crisis. Here’s what he had to say about an interim booking strategy:
“Guests have understandably had to cancel their travel plans and are totally unsure of when they can start to travel again. Encouraging bookings right now is not an effective strategy – and any bookings that do come in are far more likely to cancel so you shouldn’t really trust these transactions either. But now is not the time for hotels to fall silent on guest communications as many guests will be in the market to come back.”
Frank will hate me for using the term “soft sell,” but as things become more and more critical, the need for some delicacy gets clearer. One of Avvio’s recommendations, Guest Retention Vouchers, are designed to ensure the guest comes back to your hotel when their travel resumes and to generate revenue today. And as Avvio advises, every hotel’s website channel has already fallen silent now, so the customer database has become the soft ad. It only makes sense for Hotels to contact all canceled guests by email to offer a delicately framed open-ended voucher which can be purchased at an incentivized discount. Of course, Avvio and other industry leaders have solutions for a lot more than customer retention/incentivizing.
These, and other fairly simple actions, will begin to mediate the damage no hotelier is going to be able to avoid. At this point, it’s vital that I relate the dire seriousness of this COVID-19 pandemic. Everyone I am talking with is on the same page where the gravity of the situation is concerned. I just spoke with Tom Magnuson, who’s the co-founder of the largest hotel chain in the world, Magnuson Hotels. He was solemn, pragmatic, and kind as always. The hotel legend told me London is “ready to hunker” down and face the tragedy. Tom will join other key experts as part of an advice and best practices teleconference event next week where the state of industry solidarity will become clear as well. Another thing Tom mentioned in our conversation is the necessity for everyone to come together with best efforts to solve those problems which we can.
Finally, as I type this report there are 190 total coronavirus cases in Greece. Officials have shut down cafes, bars, malls, and restaurants. For those readers who’ve forgotten, Greece has only just emerged from its worst-ever economic crisis. To make matters worse, travel agents and other entities have sold the country as a budget destination for years now. TUI and other agencies filled a void, filling rooms with budget vacationers. My marketing colleagues, OTAs, even government officials played a role in sacrificing margins in order that businesses stay afloat.
Now, the mediocre gains the tourism industry has gained the last couple of years, it will evaporate. I think there is no one out there who will argue with me. What’s crucial now is to come up with short, mid, and long term solutions that are (excuse the buzzword) sustainable. COVID-19, no matter what the ultimate scope of the pandemic is, represents an opportunity for this industry to change for the better. This is the ONLY way we should be addressing these issues. Make no mistake my friends, the world is upside down. You cannot imagine the level and scope of chaos I am seeing in today’s conversations.
Editor’s note: This Money report shows the booking cancellation policies of many of the world’s top hotels as of March 12.