SHANGHAI - Part 1 of Phocuswire’s Roadmap to Recovery detailed how the hospitality industry can recover from the COVID-19 coronavirus from a revenue management, sales and marketing perspective; Part 2 examined recovery across food and beverage and meetings and events. Part 3, the final instalment looks at Operations and Finance.
Focus on forecasting for sanitation and room control. During this outbreak, revenue managers should update hotel daily occupancy forecasts and provide them to the operations department for proper staffing.
The revenue manager needs to keep close communication with the front desk and housekeeping department to make reasonable arrangements for the use of rooms so the hotel can carry out energy control, saving energy by floor or by area.
After the outbreak, to keep up with increasing public attention on a healthy environment, hotels need to focus on more details of health services, including guest room hand sanitizers, fresh-air systems, display of indoor air quality, high-quality bedding, nourishing, organic food supplies, airport transportation vehicles in clean and disinfected condition, etc., to improve service quality and customer satisfaction.
Forecasting is key! The forecasting of cost focuses on energy, labour and all those unnecessary expenses, and then controls those costs to minimise it. This process requires collaboration from all departments.
In terms of labour cost, try to clear out staff overtime and encourage everyone to take annual leave and/or schedule mandatory training sessions during the period of low demand.
Maintain cash flow and hotel operations. In times of economic crisis and major emergencies, most small- and medium-size enterprises fail to survive due to cash flow disruption. The hotel management team and finance department can consider the following ways to counteract this:
• Energy cost controlling is always the crucial way of saving. Based on the business forecast shared by your revenue management team, the energy consumption of guest rooms can be arranged in advance. When occupancy drops significantly, block the area by floors or by areas to reduce unnecessary energy consumption.
• The finance department can negotiate with the purchasing suppliers to extend the payment cycle or temporarily reduce the proportion of expenses.
• Try to seek help from rent reduction or reduction on brand management expense.
• With the help of the policy of loan rate reduction, only keep the necessary purchases to maintain hotel operations.
About the authors: Yuki Hu, Eva Liu and George Yu are part of IDeaS Advisory Services, China.