Insider

Ready when you are

Peter Hancock, CEO, Pride of Britain Hotels, told the virtually assembled at The AHC Reimagined that the company’s catchphrase, tagline, words of inspiration were ‘ready when you are’. This was seen as a bit less threatening than trying to force people out of their comfort home offices with insistent messages about cleanliness and getting back out there. They speak instead of a hopeful future when people will be ready and hotels will be ready for them when they are.

And while hotels wait for the vaccine which will reassure everyone and uncork the pent up demand, they must compete for that reduced number of guests who are currently willing and able to travel and try to work out who they are because thanks to the random nature of the pandemic and government response, it’s something of a moving target. On rocky seas. At nighttime. And you’re blindfolded. And have been on the rum.

Ben Harper, managing director of Watergate Bay and Another Place, discussed the issues around trying to model when at any point there could be another lockdown or, as in France, movement could be limited to, say, 60km, which means that your London-heavy guest roster would be unable to make it to the South West. For Harper, demand has been strong. As IHG CEO Keith Barr noted, the same could not be said of big city-centre hotels and, for London, more and more of those were delaying reopening until the Spring.

For that demand which is available, competition is enthusiastic, although both Hotstats’ Michael Groves and STR’s Thomas Emanuel reassured attendees that the race to the rate bottom was not with us yet. What was perplexing those on panels and in breakout chats was, instead, the issue of how much the guest was costing to acquire.

Munira Nathoo, director, Beverley Group, said: "Distribution is all coming through OTAs, not from brands even though we’re being saddled with all the additional costs from the brands thanks to the additional hygiene costs. This needs readdressing.” She was far from unique in her viewpoint. Al-Karim Nathoo, MD, 4C Hotels, added: “The onus will be on the brand to prove their worth and work that much harder if your distribution skews more towards OTAs - what is a brand for?”

No no, protested, Accor’s VP franchise operations, Stuart Symes, think of the loyalty, someone think of the loyalty. But owners have been thinking of the loyalty. They’ve been thinking of nothing but the loyalty  - and its cost - for the past two years. This correspondent recently spent a solid half an hour at Kings Cross waiting for the Eurostar and watching the rolling adverts for Marriott’s Bonvoy scheme and thinking constantly of the loyalty. And, as was the advert’s genius, golden sands and turquoise seas.

But mostly the loyalty. We heard earlier this week about how hotels could leverage their loyalty programmes for cash, but at this point the brands would just like them to prove themselves to owners, so they don’t get stuck in a cycle of questions like those above about why the brand isn’t doing the one thing that it’s meant to - deliver guests.

The argument around the investment in loyalty programmes had been that yes, it is more expensive to acquire a guest this way - but only if you think of it as being for just one night. If you think of it as a lifetime, then it’s an utter bargain. And this was starting to work out. In February Host was effusive about the impact of Bonvoy, with James Risoleo, president & CEO, telling analysts that loyalty redemption revenue had supported its leisure demand. He said: “Our redemption revenues have grown well in excess of the revenues outlined in the business case Marriott made for Bonvoy in 2019.”

But now that leisure demand has become more cost conscious and has remembered the constant message of the OTAs: that they are cheaper. And you can release studies about how that’s not true all the live long day, the leisure consumer is following gnomes, rubber ducks and William Shatner all the way to the OTAs.

Most hotel companies will tell you that they don’t need the lifelong allegiance of the lower-priced leisure traveller and maybe that’s true. But they need them right now and for this Symes talked about the need for hotels to finally get to grips with all the data they have scored through loyalty programmes and get to know their customer. Because even the most frequent flier needs reassurance at the moment and reassurance is that much more reassuring when it’s from someone who knows you.

So what we enjoyed at the AHC was seeing the familiar faces and seeing that they too have made it this far with a smile and, in one case, two thermoses of tea. And what the sector needs to do to draw guests in is be that familiar face to those venturing out again. Whenever they’re ready.