While nearly all businesses were impacted by the coronavirus outbreak in early-2020, the hospitality industry was hit particularly hard.
According to McKinsey research, hotel occupancy rates dropped to anywhere between 20 and 40 percent worldwide. The consultancy firm also believes that recovery to pre-COVID-19 levels could take the industry until 2023 or later.
To tackle this unprecedented challenge, hospitality companies across the globe decided to introduce several measures. In the following article, we discuss how brands, including Airbnb, Le Bijou, and InterContinental, stepped up to the challenge to maintain business operations in the new reality.
What is a business pivot?
Even though the term ‘pivot’ is frequently understood as a drastic business change, it doesn’t always entail changes that shake the business to its core.
Rather, it’s the process of addressing an important problem or challenge the company is facing – one that is keeping it from achieving its goals. Therefore, a pivot can mean anything from introducing a new product or service into the business’ offer, through to an entire redefinition of the business and entering a new industry.
10 hospitality companies that pivoted during the COVID-19 pandemic
Airbnb is an online vacation rental marketplace that allows hosts to welcome guests into a rental home. Because the coronavirus caused sanitation concerns – with some governments like Poland forbidding rentals altogether – Airbnb created a flexible cancellation policy for bookings made on or before March 14, 2020 – just three days after the World Health Organization (WHO) declared the COVID-19 outbreak a pandemic.
The platform remains operational and urges anyone traveling to check local travel restrictions before booking.
Airbnb also altered another facet of its platform, Airbnb Experience, to continue serving customers. The service offers unique and memorable activities that are designed and hosted by locals. However, since travel all but halted in March, it became difficult for locals and travelers to connect via Airbnb.
Now, Airbnb hosts online experiences via live video sessions that are limited to small groups. It allows anyone around the world to participate as a way to connect with other cultures. This is a new feature that the company has added since COVID-19, but one it could absolutely maintain following the return to in-person travel.
2. Four Seasons Hotels and Resorts
Four Seasons Hotels and Resorts is a Canadian-based international hospitality company. It operates 100 luxury hotels worldwide. Just two weeks after COVID-19 was declared a pandemic, its Manhattan location halted bookings through April 15 and announced that it would provide free accommodation to doctors, nurses, and other medical personnel.
This was enormously helpful to the frontline workers in New York City who typically travel from other areas after putting in 18-hour days. The Four Seasons provided a location close to work where they could rest and regenerate.
Four Seasons also updated its COVID-19 policy and entered into a consulting agreement with Johns Hopkins Medicine International to help inform its health and safety decisions during the global pandemic.
3. Red Roof Inn
Red Roof Inn is a U.S. economy hotel chain with 650 properties around the world. With few travelers in need of rooms, Red Roof Inn decided to take advantage of the remote work phenomenon happening across the country.
It introduced special day rates for those who need a quiet place to work. Its workspaces include Wi-Fi, communication packages, and in-room coffee. If desired, guests are even able to bring a well-behaved pet along to keep them company.
Additionally, like the Four Seasons, Red Roof has been donating a limited number of its available rooms to the country’s first responders – nurses, doctors, and emergency medical providers – who are in need of a place to stay.
FabHotels is a network of 3-star budget hotels in India. It was founded in 2014 by Wharton School alumni Vaibhav Aggarwal and Adarsh Manpuria. Because the hotel is primarily focused on business locations, it stopped receiving bookings on March 24 when business travel came to a halt. However, the FabHotels team worked hard to explore new demand channels.
They launched the Work-from-FabHotel campaign, which allowed IT, consulting, BPO, and essential service providers to stay at FabHotels and maintain social distancing, all the while ensuring top team productivity.
Clients were provided with high-speed internet access, work desks, and in-room dining. More than 150 FabHotels adopted this approach in Delhi, Mumbai, Chennai, and Bengaluru. The chain has also adjusted its on-site communication to emphasize that it has introduced new COVID-19 sanitization standards.
Like other hotels on this list, FabHotels is partnering with medical professionals who may live far from the hospitals where they work. It is helping to provide discounted stays in sanitized rooms to reduce the physical and mental strain that comes with caring for patients during a pandemic.
5. Hotel Zachary
Hotel Zachary is a 4-star hotel that’s only minutes from the Wrigley Field Stadium in Chicago. It’s a Marriott Tribute Portfolio Hotel that’s owned by Hickory Street Capital.
While the real estate company initially made the decision to close the hotel in the early days of the pandemic, it has since reopened to frontline medical staff who work at Advocate Illinois Masonic Medical Center.
Source: Chicago Hotels Now
Now, the boutique hotel helps to provide aid by offering complimentary accommodation to medical professionals.
In order to secure more bookings as restrictions lessen, Marriott International has also created a special Global Cleanliness Council that consists of in-house and external experts on food and water safety, hygiene, and infection prevention.
The council now oversees the highest cleanliness standards not only in Hotel Zachary but also in 7,300 other Marriott-managed locations across the globe.
Walks is a tour company that has had to pivot its model from in-person touring to online touring. It launched its Tours from Home program as a way to feature limited-time-only content covering topical, provocative, and fascinating subjects not generally covered on its tours.
It is a calendar of on-screen excursions within city tour locations, which feature expert guides, chefs, and storytellers in conversation from their homes.
Customers can purchase access to the online programs and receive a $25 future travel credit voucher. Through this, the company continues to engage its audience despite social distancing measures.
As COVID-19 restrictions have been eased across several locations, the company has re-introduced some of its offline experiences into its offer. All in-person tours are now carried out in accordance with strict health and safety standards guaranteed by the SanSee shield – a certification given only to tour operators who meet rigorous sanitation standards.
7. FTLO Travel
FTLO Travel (For the Love of Travel) advertises itself as modern group travel for people aged 25-39. It promotes sustainable slow travel for solo tourists and is widely considered a “Millennial” group travel company.
During the COVID-19 pandemic, it has pivoted in a number of directions.
- It has held Travel Trivia Tuesday Happy Hours, where participants can mingle online and earn FTLO Travel credits.
- It has re-launched its Weekender Series. This series is aimed at getting people out and about relatively near (within 200 miles of) their homes. So, travelers will go on domestic trips, meet new friends, and see somewhere new.
Tara Cappel, the founder of FTLO, says:
"The trivia nights have been a fun way to keep our community connected. We place people on smaller teams, so they actually get to make friends as they work together to answer the trivia questions. I’ve even seen teams create group chats on WhatsApp or Instagram to keep in touch after the game is over."
8. Sophy Hyde Park Hotel
Sophy Hyde Park Hotel opened less than two years ago as a 4-star luxury boutique hotel in Hyde Park, Chicago. Back in March, Sophy Hyde Park Hotel closed entirely to the public and opened (free of charge) to University of Chicago Medical Center staff
This offer remained valid to frontline workers until at least April 17. The goal was not only to give workers a place to stay if necessary but to give them a place to relax.
As of August 2020, Sophy Hotel had already reopened to travelers. The entire hotel staff had undergone additional training to ensure that they abide by WHO and CDC health and safety protocols.
This includes touchless ID confirmation and payment upon check-in, strict social distancing observance in the restaurants and common areas, and complimentary face masks and gloves for hotel guests.
9. Le Bijou
Le Bijou is a boutique luxury apart-hotel in Zurich. Le Bijou almost didn’t suffer as a result of COVID-19 because it was already set up so guests could avoid human contact altogether. Although, given the circumstances, the hotel still pivoted to best serve the needs of their clients.
Le Bijou has 42 units at properties across Switzerland (think: luxury Airbnbs). These units have full-service kitchens, saunas, fireplaces, gyms, and Jacuzzis. Aside from cleaners, the units operate without staff, so guests don’t have to worry about contact with any outside personnel. However, they can order meals, groceries, cabs, and more through a private app and remote 24-hour concierge.
The hotel created its COVID-19 Service as a customizable stay with add-ons. These add-ons include doctor’s visits, in-room COVID-19 testing, and 24/7 nurse care. They have also partnered with a private clinic to provide medical services.
The catch? The hotel costs anywhere from $800 to $2,000 per night, depending on which property you’re at, so it’s definitely not for those on a budget. That said, the new model has been successful, and reservations are now being made for stays spanning anywhere from two weeks to two months.
10. InterContinental Sydney Double Bay
One of Australia’s most iconic hotels switched its model in the face of the COVID-19 pandemic. The 5-star hotel is a luxurious seaside accommodation and – prior to the coronavirus – used to have $400-$500 per night rates in the middle of the week. However, as the demand for accommodation dropped, the hotel had to adjust its strategy.
Firstly, it slashed its rates for voluntary self-quarantine packages. Guests can stay for up to 21 days for highly reduced rates, including unlimited Netflix and stunning views. These rooms have been used by the Australian government to house dozens of individuals returning from overseas travel.
Secondly, to support medical staff, it introduced the “Heroes” discount code, offering lower rates to healthcare personnel engaged in the coronavirus fight. InterContinental also offers 20 free rooms daily to medical workers from nearby hospitals so they have a safe place to stay.
The hospitality industry’s response to COVID-19
The hospitality industry has taken several effective steps to maintain operations during the COVID-19 lockdown. Firstly, many hotels have offered their unoccupied rooms to healthcare workers to offer them a comfortable space to regain strength after long hospital shifts.
To increase occupancy rates, several hotel chains, like Four Seasons, Red Roof Inn, Marriott International, and FabHotels, have also decided to change their rooms into office space for remote workers.
Other companies, including Airbnb and FTLO Travel, have focused entirely on introducing online experiences, like virtual tours and meetings with inspiring individuals from around the globe.
The above-mentioned steps have all helped companies survive the most extreme times, allowing them to reopen their doors after restrictions were lifted. However, with the pandemic’s end nowhere in sight, it’s expected that hospitality companies will need to proactively fight for customers’ attention for many months to come.