Definitely Doug 4/3/20: Turning Lemons into Lemonade

Turning Lemons into Lemonade

It may be quite some time before hotels start buying technology again. There will be exceptions, to be sure, but for now they will be few and far between. And as much as I have enjoyed highlighting pockets of cool innovation in this column over the past year, very few readers will be able to act on those insights in the current environment. So, while I hope to be able to return to my old format sooner rather than later, I’m going to change focus in this and upcoming columns. I’ll instead talk about what hotels, technology providers, and displaced technologists can do today.

Before I get into it, though, I have an ask of you. In future articles, I want to cover technologies and products that can be used to address opportunities that have been, will be, or might be created by COVID-19 and its fallout. What’s going to be especially relevant during the lockdown or early recovery, that might be less important or even totally useless during normal times? What are some actual or potential products or services that might help the industry deal with post-COVID behavioral changes for travelers, hotel associates or even vendors? I’ve got a few in mind already, but would love to hear your thoughts, including products or companies I should be looking at.  Please drop me a note at the email below or ping me on LinkedIn.

Global disruptions like this are painful, but history teaches us that the more disruptive the event, the more opportunity it creates for new business processes and technology models to emerge. The 2008-09 financial crisis led to much greater willingness to try new ideas to cut costs or generate revenue, and it happened just as newer technologies like cloud and mobile were starting to mature. While many legacy technology providers were hunkering down and cutting R&D, agile startups challenged them with disruptive new products based on more cost-effective and mobile-friendly architectures. A decade later, some of these had become new market leaders. Disruption – and this business cycle will be extremely disruptive – also means opportunity.

So, this week I will look in turn at what the different stakeholders in our industry can do in coming months. Everyone’s situation is different, but I hope that at least one or two of these ideas might apply to you. Given the diversity of readers, I’ll have thoughts for both hotels and technology providers. But first I’ll start with the most important group, those technologists who find themselves suddenly, unexpectedly, and undeservedly furloughed or unemployed.

Job-hunting is likely your priority, but even so it probably won’t occupy 100% of your time. How can you be using the rest to be in a better position when the economy comes back? First, it’s a great time to do a deep dive and learn about emerging technologies. You can pick something that’s interesting AND develop knowledge and skills that will make you more relevant in the future.  Augmented or virtual reality, robotics, new networking technologies (like 5G, CBRS, and WiFi-6), IoT, Machine Learning, and Natural Language Processing are just a few areas that will be important in our industry. Technologists who know digital marketing will also be much better positioned to add value to their companies, especially as they turn to rebuilding their customer bases – there is a big communication gap between marketers and technologists and a need for “bilingual” talent.

In future installments I’ll try to highlight some resources on these and other topics. If you have used one that you particularly like, please let me know so I can include it! Alternatively, pure technologists can add value to their hospitality organizations by broadening their knowledge of hotel management, such as through this free certificate course being offered by Florida Atlantic University, or through free courses being offered by the American Hotel & Lodging Foundation.

If you’re searching for a new job or even a short-term consulting project, consider adjacent industries that might make good use of your skills. Health care facilities, senior living, universities, commercial buildings, and multi-dwelling housing units all have substantial technology overlap with hotels, and none have been as severely affected by the pandemic. Your experience, whether on the hotel side or in the vendor community, could add real value to these organizations or to the technology providers that support them.

If you’ve got time and interest, get involved in the nonprofit organizations serving our industry. They can use your volunteer help. Getting involved will bring you into great communities that can expand your network and help you find your next job. Whether it’s HEDNA, HSMAI, HTNG, HFTP, or another organization, it’s a resource available to you, and I know some of these have special arrangements especially for displaced individuals.

And while it won’t be for everyone, if you’re out of work and have other means of financial support to tide you over for a while, consider whether to join the ranks of entrepreneurs. If you have a new business idea and the skills and network to make it real, this could be a great time to start a business – talent is cheap, your own opportunity cost is low, and there are lots of ways to disrupt the status quo. Is there a problem you’ve identified in your prior career, or as a result of post-COVID realities, for which you know of no good solution? Do you think you can create one? To be sure, you’ll work only for sweat equity for the first year or two, but if you don’t have a lot of paid opportunities, this could be an excellent option. And it has the advantage that relocation is never required.

Now let’s turn to the second group of stakeholders, those still working for hotels. While it’s easy to be consumed by the day-to-day firefighting, it’s also important to use this time to get ahead of the curve on things that will await your hotel(s) when business returns.

Hotels that are operating (or that reopen after a shutdown) will still have low occupancy and skeleton staffs for the ramp-up period. Most guests will probably be somewhat forgiving, but they still expect services commensurate with your brand reputation, and that’s harder to deliver with fewer staff.

The vendor community has been stepping up to help. I encourage you to check out some of the free offers from tech companies to help hotels compensate. For example, I know of two Artificial Intelligence chatbot companies that are offering extended free trials during the pandemic. The better chatbots can handle 75% to 80% of guest queries without a human, reducing call volume while still being responsive to the customer. Curtailed food and beverage operations can be augmented by local restaurant delivery options; these can often be added inexpensively to an existing service-request or mobile app infrastructure (or a chatbot). Alice is offering a free checklist app for the process of closing and reopening hotels, something most hotels have never had to do before (does your front door even have locks?). Beekeeper and Whispr are offering a similar checklist for Covid-19 cleaning tasks. Phonesuite is providing three months of free cloud-based automated-attendant services for hotels that are shut down or on limited operation, avoiding the need to reconfigure your current phone system. I’m sure there are many others I haven’t heard about. HTNG has put up a web page with COVID-19 related resources, including a growing “Member Resources” section that lists some of these offers (and no, you don’t have to be a member to view it).

If you need something not on the list and know of a vendor who has it, reach out and ask if they will give you a free trial. Most of the vendors I have heard from really want to help, so don’t be afraid to ask!

If your hotel has access to money but is currently closed (or empty enough that floors can be closed off), this could be a great time to accelerate technology upgrades that might have been planned for later. I have heard from many suppliers that participate in the refurbishment cycle that many hotels are moving projects forward in order to avoid revenue displacement later on. This is smart, and particularly so for guest room technology.

During periods of low occupancy, you can shut down entire HVAC zones to save energy costs. This is easy to do if you can get a good map of which guest rooms are in which zones (and risky otherwise). If you have this, you simply take the rooms in a particular zone out of order in the Property Management System so they won’t be assigned, then turn the heating or cooling in that zone down (or off). Instant cost savings!

Hotels should also be thinking about how consumer and staff behavior will change as a result of COVID-19, and what they can do to prepare for it. I’ll return to this topic in future weeks, but just as one example, many travelers and associates are likely to have significantly enhanced hygiene awareness than before. What does that mean for surfaces like payment terminals (especially pay-at-table); front desk and restaurant keyboards, mice and touch screens that are shared by staff; breakfast buffets; kiosk screens; guest room disinfecting; or TV remote controls? There are both technological and non-technological solutions to each of these issues; this would be a good time to start thinking about whether and how you should address them and what role technology might play.

Hotels should also be planning for when and how to reengage with key customer constituencies – regular guests, meeting planners, corporate travel managers, online travel agents, destination marketing organizations, wholesalers, and others. The right timing is specific to the audience: doing it too soon can be a big mistake, as can waiting until too late. Do you have the tools you need to craft and target the right campaigns at the right time? And don’t overlook the likelihood that many of your volume account contacts will likely have been furloughed or let go during the crisis, meaning that emails may never reach them. You may have tools to detect bounce messages, but even if you do, that’s not enough, because many companies configure mail servers to never send them. You also need a mail add-in that can track whether a sent email has been opened. For key accounts, bounces and non-opens will require follow-up from sales to verify contacts or identify replacements once travel restarts. Are you prepared for this?

When travel does restart, we can expect that group business will initially skew towards small meetings, often hybrid. While some of the people needed for a meeting may be able to travel and meet face-to-face, others will be under financial constraints, subject to travel restrictions, or be (or have loved ones) in a high-risk group that needs to maintain social distancing until a vaccine is available. Are your small meeting rooms equipped with a good setup for videoconference setup to support hybrid meetings? There are many good products combining a large screen display, a zoomable webcam, a soundbar, and microphone(s) suitable for supporting this at a reasonable cost.

Lastly but perhaps most critical for hotels, you should be evaluating your technology partner portfolio for vulnerabilities, which can range from loss of key staff to complete financial failure. Many providers have downsized significantly in the past few weeks, and some of the people let go may be critical to you and hard to replace. You don’t want to find that out three months from now when you are starting to get busy. Reach out to those people and let them know you want to stay in touch; if the worst happens, you may be able to bring them in on a consulting basis to fill a critical project gap later. Where a critical partner seems to be significantly at risk, make contingency plans. Could you switch to a different provider on short notice? Is there a more financially stable company that wants your business that you could help to engage with for a possible acquisition of your current provider?

The final constituency I want to talk about is technology solution providers. What can they be doing today, aside from bringing their costs into line with the new reality of their revenues (see my last blog)? I will preface this section by saying that the answer depends on what kind of product you are selling and to whom, but here are some ideas to consider.

First, unless you have somehow managed to find new markets that are ready to buy what you are selling, it might be a good time to reallocate resources from sales to development – especially for early stage companies. If you can’t sell today, use your scarce resources to build a product that can sell better tomorrow.

Second, if you haven’t already done so, reach out to every customer to find out how you can help. If you are in a position to offer even some limited financial relief, that’s great – and you’ll win long-term loyalty for offering before they have to ask. If you aren’t, then at least take the opportunity to explain your own constraints. If possible, offer some things that will provide value to the hotels but that cost you very little. Some of the “free” offers I mentioned above are good examples, but there are many others.

Third, are there new problems hotels are facing today, or will be facing soon, that you can solve? If there are, is there a way to offer your solution (or part of it) for free or at very low cost? If you can make this offer to anyone, not just to your existing customers, then it’s an opportunity to build awareness, trial, and even loyalty that could pay huge dividends later. The offer needs to be very targeted at a specific problem, and very inexpensive (ideally free); otherwise it will come across as a crass attempt to capitalize on a crisis to increase sales (and that’s bad!).

Fourth, if you’re not already mostly or entirely virtual, it’s a great time to reassess whether you could be more so. You’ve likely gotten some experience in both the benefits and pitfalls of a remote workforce in recent weeks and learned some things to make it work better. Going virtual can reduce your fixed operating costs, open you up to a much larger talent pool, and (done right, and that’s an important caveat) improve productivity and employee satisfaction and engagement. There are lots of resources online right now about how to do this effectively.

Lastly, evaluate your talent.  It’s a great time to be hiring right now. If you can afford to hire for new projects, do it now, there are some terrific people looking for opportunities. And even if you can’t (which is most companies in our industry), what about that staff member who has always been a pain in the behind and hard to manage, but too difficult to replace? With all the talent in the marketplace, maybe it just got a lot easier.

Yes, things are as bad as they have ever been, but they will get better. When they do, will you be positioned to thrive? Please share your thoughts and ideas, or anything you think I should be looking at for future columns. And please, stay safe!

Douglas Rice

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