British Hoteliers Face up to the Coronavirus Challenge

27/03/2020 By James Bland

The hotel sector has never seen anything like this before.  The impact on hotels is already far greater than the SARS outbreak of 2003 or the financial crisis of 2008 – neither of those saw the enforced closure of properties all around the world, the complete lockdown of the largest origin markets or global occupancies tumbling to zero that we have seen unfold in just a few weeks.

There’s no playbook here.  As a result, owners and leaders are pretty much having to make it up as they go along and trust their instincts.  Some are getting it right, others… well… are not.

Today (27th March 2020), we launched a weekly tracker that will measure the sentiment of British travellers; those who use public transport, visit attractions or stay in hotels.  The first report has been distributed to our clients and headline results will be updated on our site and social channels each Wednesday.  Yesterday, our colleagues in BVA Nudge Consulting released a free guide to communicating during a crisis and have offered to support our clients with free cognition audits on proposed communications.  At a time like this, you want your message to be received, you don’t want ‘delivery failed’.

In our tracker, we asked our respondents which companies they thought have responded well to the current situation.

IHG has gained credit for making hotel rooms available to the homeless. The Mayor of London’s office has block-booked rooms at a discounted rate for the next 12 weeks1.  As well as the terrific image boost of this move, it’s actually looking like a fairly astute commercial move too.  When all your competitors are forced to close, any booking becomes a desirable one.

Strangely absent though, in my opinion at least, was Macdonald Hotels.  This business has not been without its challenges over the last couple of years and only in November abandoned a plan to sell 27 hotels to wipe out £190m of debt in favour of selling two and seeking to refinance2.  Despite that, it has been generous in its offers to help – free breakfasts to NHS workers3, delivering food from its kitchens to local hospitals4 and, most notably, stepping in to offer accommodation5 to employees of a nearby competitor who found themselves made redundant and then evicted in the space of two paragraphs6.  Even name-checks in national media from Nicola Sturgeon didn’t propel Macdonald to the front of the survey respondents’ minds and that’s a very great shame, because their initiatives deserve to be rewarded. Founder Donald Macdonald, a crofter’s son from Harris, is another of those self-made Scots from a humble background who give generously to charity.

Sadly, Donald Macdonald is no relative of Malcolm Macdonald, ‘Supermac’, whose glittering football career reflects well on his home town – Fulham!  If Donald had been a footballer, rather than a hotelier of repute ahead of founding his business in 1990 then perhaps his chain would have received more attention from both mainstream and social media.  Then again, perhaps not, since for many of those football only began in 1992.  Spare a thought for Ryan Giggs; I assume he owns just as much of Hotel Football and the Stock Exchange Hotel as Gary Neville but it’s Gary who has become identified with their incredible gesture of opening their hotels to NHS workers for free7.  It helps no end when BBC Sport covers everything you say and do, of course, and even Liverpool fans are revising their opinion of these Manchester United legends; I’m not sure that’s ever happened before.  Mind you, ‘Giggsy’ probably got more plaudits as a footballer, so perhaps it’s Gary’s turn.

But mentioned most was Marriott.  Earlier in the week, their CEO Arne Sorenson uploaded an incredibly touching and inspiring video8 to social media that he had first shared internally.  Arne is suffering from pancreatic cancer and his appearance is strikingly different from a few months ago, yet the composed, resolute performance he gave (in which he also announced he will taking no salary at this time) and leadership he showed despite his personal battle seems to have touched people, and it has inspired similar messages from the CEOs of both IHG9 and Accor10 in the days that followed.  The power of video is apparent here – it’s the only way we can connect personally with people outside our households and, as such, it seems to resonate far more effectively than the written word.

Despite being forced to furlough or lay off thousands, hotels are playing the people card.  They are very keen to remind people that their job is looking after guests – whether through excellent hospitality or, in this case, the absence of their hospitality for reasons of health and well-being.

“We’ll be here when you’re ready to come back“ is the message they’re putting out there to guests.  At the moment, in the UK at least, our survey is suggesting that’s not going to be for a while.  Just 19% percent of our respondents expect to be booking hotel accommodation in the next 6 months based on what they currently know and expect.  I have never wanted so much for our research to be wrong.  The longer all this goes on, the less like a ‘V’ and more like a ‘U’ the long term trend will be.  Let’s all of us hope it’s not an ‘L’; that would indeed be ‘L’ for everyone.

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My apologies to those hoteliers and groups also doing great things that I have not mentioned in this commentary.