COVID19 Is Having a Serious Impact
The current situation is clear. It is not a great time for the travel industry. Each and every one of us in hospitality has been adversely affected.
Today, only 8% of domestic business travel is still happening and it’s almost all travel for essential services personnel. The CDC federal government website currently states that you should only travel to provide medical or home care, or if your job is considered essential. The loss to date for global business travel revenue is estimated to be $820B, and for travel overall, it is upwards of $1T.
We are absolutely going through a difficult time as indicated by these statistics:
– 96% of companies have cancelled or suspended their international business travel
– 92% of companies have cancelled domestic business trips
– 95% of meetings and events have been cancelled
This is especially painful when layoffs are now a common occurrence across the entire hotel industry and also the economy as a whole. In fact, business travel is directly or indirectly responsible for 7 in 10 jobs throughout the world. The impact is severe.
But, Things Are Turning Around
At Event Temple, we’ve been monitoring the situation, both as hopeful optimists, but also as data-informed realists. We’ve carefully researched the statistics that are available and have also kept a close eye on various surveys and sentiment. The results seem promising.
In a recent report from STR, they predict a 45-55% drop across Demand, Occupancy and RevPAR in 2020, which is not great news. But, they also expect all 3 to be up by 45-50% in 2021.
As well, in a recent survey, 28% of business travellers asked said they were eager to travel again for business so long as government isolation policies are formally lifted. It’s definitely clear that business travellers are looking forward to getting back to work.
The Global Business Travel Association surveyed over 1100 companies in April and 51% expect business travel to resume in the next 2-3 months, with 28% saying it will be likely longer than 12 months. This is a large change from March, when 40% of the same group said they were unsure when business travel would resume. In April, only 16% of people were unsure.
Although we’ve all heard opinions that the world may permanently change post-Covid19, it’s clear to us that videoconference is unlikely to fully replace business travel. People will still be meeting to network, learn and build relationships and none of this is likely to change. There is likely to be less travel however, which means an increase in competition among hotels (more on that later). We also expect hotels will incur higher cleaning and sanitization costs.
When Will Domestic Business Travel Will Be Back?
The optimists in the surveys have said that domestic business travel will resume in 2-3 months, while others have said 12 months and the pessimists have put it at 18 months. STR’s report seems to imply somewhere between 7 months. Based on these numbers, our prediction at Event Temple is to meet in the middle and we believe that domestic business travel should pick up in the next 5 to 7 months.
Leisure travel in the form of staycations are likely to come back the fastest, followed shortly by domestic business travel. China is a great example of this. In a recent STR report on hotel occupancy in post-crisis mainland China, they concluded that most of the 31.8% occupancy in late march came from corporate travel, primarily within the same province, as well as small meetings. Leisure was picking up in surrounding suburbs but not in city centers. Based on this data, we feel it is makes sense to shift your strategy to your local market to replace lost business, and, if it makes sense for your property, to shift your strategy to focus on local business travel.
Thinking About Tomorrow, Today
The right hotel sales strategy involves anticipating obstacles down the road. We predict that supply will dramatically outstrip demand and this will result in an increase in competition. When travel reopens, specifically domestic business travel, we believe there will be fierce competition for the first leads that begin to resurface.
For that reason, we feel you need to start getting prepared now.
Are You Ready?
The average sales cycle takes 4 to 12 months for B2B customers. That’s how long it takes to prospect, find and close new business from start to finish. Sales cycles for existing customers are considerably less, with 60% of deals taking 3 months or less and 22% taking one month. We can see by this data that working with existing customers is considerably easier than finding new ones. Pre-existing relationships matter for generating not only revenue, but also referrals and reviews that drive more bookings. Having said that, both are essential in creating an effective sales strategy.
Start Your Post-Covid19 Sales And Marketing Strategy Today
Since the data shows it takes on average about 8 attempts to reach new prospects, you need to start your outreach now to be successful when business comes back online. As well, it’s important to remember that 50% of business goes to the first vendor that responds to inquiries. An even better strategy though is to be top of mind and get them to ask you for a quote before they even reach out to your competition. It’s important that you execute a strategy that combines sales and marketing and allows you to stay top of mind.
Covid19 Sales And Marketing Tips
The Covid-19 pandemic is a difficult time for everyone, which means your outreach and marketing needs to be empathetic, personal and sensitive to the events going on. The aggressive, hard-pitch sales and marketing tactics will not work right now and instead will do the opposite. If you push too hard, you risk losing business forever.
Having said that, there is a way to make the plan and start working on it today, not 6-12 months from now when it is too late.
Here are some tips:
– Prospect using personal email
– Build prospect lists you can use later, now (we recommend using LinkedIn and Hunter.io)
– Make your outreach personal
– Avoid generic messages
– Stay top of mind using email marketing and social media
– Be persistent but not pushy
– Track your sales activities in a CRM so you can keep it personal and remember what you said and did as you look back
– Avoid using inefficient tools like email, calendar, post-it-notes etc
– Avoid using generic email marketing programs
– Drop-ins are not appropriate right now
– Educate and offer support
– Become a community resource
– Your Approach
As you combine your sales and marketing approach to build a cohesive strategy, aim to become a community resource that educates and offers support in an authentic, human way. Do not be desperate or pushy in any way when prospecting and instead, reach out to personally check up on people. For contacts you have no relationship with, try to find a referral or a relevant, timely reason to reach out. Otherwise, put them on a list and save them for later.
We also recommend you focus on winning back and/or retaining past business as part of your sales effort. Use this time to prioritize, then touch base with past contacts and accounts as well as retaining past customers is 7 times less costly than acquiring new ones. Additionally, it’s important to keep in mind that companies typically lose 10-30% of their customers each year during regular business. In the “new normal” post-covid19 world, we are expecting retaining business will become even more difficult. Focus on building relationships with people and they will turn to you as a resource when they do begin booking domestic travel nights again.
Tying It All Together
As we’ve mentioned, in addition to prospecting and retaining customers, review your digital marketing campaigns to ensure they are supporting your sales team. Target local markets and communicate with empathy to show you are a real, authentic person. Try to stand out from the crowd and avoid talking about the usual topics. Instead, keep your guests informed with community news, updates on safety and government regulations. As well, keep them informed of your own policies like new booking policies that include free cancellations or flexible check-ins. Consider key-less options or automated check-in/check-out software to give your guests added peace of mind.
This Is An Opportunity
At Event Temple, we sincerely believe this is an opportunity. Before the Corona virus, hotels were becoming more and more reliant on OTAs. This is a new opportunity to create a cohesive marketing strategy that enables you to not just compete, but to reinvent your approach to your local market. We encourage you to make corporate rate agreements part of your strategy, along with proactive sales prospecting. We hope you use this as an opportunity to automate the mundane parts of your daily workflow so you can spend more personalized time building real relationships with customers.
We are aiming for a full rebound of domestic business travel by this fall.
We encourage you not to wait for this new business to come to you, or it’ll be too late.
Instead, start working on your strategy today and set your property up for success by positioning yourself ahead of the opportunity.
Good luck, and let’s hope the future is as bright as we hope for our industry and our communities.