Many thanks to the Ohio Travel Association for the opportunity to have a Q&A session on some of the effects on the travel and tourism industry from the COVID-19 pandemic. H&LA’s David Sangree answered some thoughtful questions and give his insights into what we can expect for some important tourism industries as the country slowly begins to open amid on-going virus concerns.
Published by: Ohio Travel Association
Published date: May 2020
I had the pleasure of interviewing OTA member David Sangree, President of Hotel & Leisure Advisors, LLC this week. Read through the article below for the latest research, recommendations, and tips on how to persevere through the pandemic.
Q: Generally speaking, what do you predict for attractions, hotels, etc. during the COVID-19 pandemic?
Until the stay at home orders are lifted, most attractions will remain closed and hotels, which are primarily providing accommodations for essential workers, will stay at minimal guest levels. Social distancing directives and the contraction of the economy both discourage travel and leisure activities, causing attractions and hotels to experience profound losses. We have seen record-breaking declines in hotel occupancy across the country. STR reported a 62.2% drop in occupancy for hotels the week ending April 25, 2020 and ADR decreased 42.9%.
When the pace of the economy picks up and social distancing requirements ease up, hotels will experience strong levels of pent-up demand, initially from drive-to leisure visitors followed by commercial transient travelers. The group segment will likely be the last to bounce back. The initial boost in drive-to tourism will benefit hotels in Ohio, a destination easily accessible by car, unlike Las Vegas, a fly-to destination. However, it remains unclear how fast guests will feel comfortable with travel once restrictions are lifted. Much of that may depend on how the industry as a whole communicates with travelers.
For attractions, there is great uncertainty as to potential opening dates for the 2020 spring/summer season. Even if attractions can open, attendance will be impacted by potential capacity restrictions and requirements to wear masks and observe social distancing. These complications will negatively affect revenue and profitability for all attractions. Depending on a state’s restrictions, some attractions with a limited operating season may choose not to open. Many attractions will have to weigh the added costs of complying with their state’s guidelines and lower revenues to determine if opening for the 2020 season is warranted. The attractions industry is likely to wait on large companies to make the first move, which will likely set the tone for how attractions move forward in recovery.
Q: Do you have any recommendations for attractions/hotels to keep business going during this time?
For hotels and attractions that remain open, the key is for guests to feel safe. It is difficult for a guest to enjoy an overnight stay or entertainment experience without first feeling secure. Hotels and attractions need to effectively communicate their cleaning processes to ensure the safety of guests and to encourage their patronage. Rate cutting has always been seen as an effective way to increase demand, but this situation is so unique that even that strategy will have limited impact. Some hotels have offered their properties to frontline health care workers or other emergency teams. While the rates extended to essential workers are lower than traditional ADR’s, hotels that offer them are maintaining positive occupancy as well as building goodwill in their community. Other hotels or attractions such as Great Wolf Lodge are offering promotions for frontline workers and their families that are redeemable after the pandemic. Hotels and attractions should try to conserve cash and be patient with the overall timeline of the pandemic. There are still too many unknowns in this unprecedented situation.
Q: What are some things businesses can be doing to reduce touch-points for future guests?
We have already seen the push towards contactless check-in at hotels and this crisis is likely to accelerate that trend. Some hotels are looking to change the traditional breakfast buffet to a single-serve style as one way to minimize contact. A hotel’s fitness center and business center will also likely undergo changes as guests seek safe and socially distant facilities. Hotels may initiate a sign-up for times to use these facilities with cleaning in between. Hotels will not provide daily housekeeping, rather do a deeper clean after a guest checks out.
Attractions face a bigger challenge with how they will operate with a constant turnover of guests on a ride or attraction every few minutes. This turnover increases guest exposure exponentially. While there are many ways attractions can try to limit exposure, such as restricted attendance, deep cleaning after every ride, virtual lines, and requiring masks, acceptance of these measures will depend on their guests’ level of compliance, comfort, and safety. There is talk in some places of having mandatory temperature stations at the entrances to hotels and attractions, but it remains to be seen whether that will become an accepted practice.