With the first week of lock down behind us, I must have spent at least 30% of my time reading and following trends from global markets and the effect of the virus. This is to establish a base for forecasting and sales/marketing actions and to apply some sort of formula to the current values we have on the forward book. I follow and read STR, World Economic Forum, various travel and tech sites and general hotelier feedback on less prominent channels. Whilst its generally uncharted waters we do have some data from the Mers Virus that wrecked China in 2003. Although the virus itself and China’s hotel landscape was very different then vs now, we found that it took a full year for the industry to recover to get ‘back-to-normal’ (obviously a slow increase month by month) Whilst many blogs and write up gives us advice what to do now, not many tell us what to sell when we reopen and at what price and the date. The known In summary we know thus far, China is recovering and occupancies are increasing but from domestic travel (business and leisure). We know most destinations suffered severe losses, occupancies are into single digits, thousands closed and that there are absolutely no sales coming in for the immediate future of April-May-June (in SA). There was nothing we could have done to prevent losses, no thanks to OTA’s but the only decision was to close or stay on limited service and the date. In short there are no winners in this saga, only survivors Travel expectation We know that people travel but it won’t be the same: expect the following and anticipate their needs in welcoming them back But who will be back first from the international market? Recovery will be uneven as countries move through the phases of contagion. https://www.visualcapitalist.com/infection-trajectory-flattening-the-covid19-curve/ The only flattening curves are China, South Korea, Taiwan. Entering the flattening curve are Austria, Australia, Israel, New Zealand, therefor these will be the first international travellers to SA. Reportedly it took China 30 days (since the 100th reported case to reach flattening curve) The immigration queue will be longer. We know China, Singapore and South Korea opened their gates but their greatest fear is allowing infections back in. All arrivals from Europe and US are quarantined for 2 weeks, even if they test negative. We can expect the same as everyone else opens. Guests will need relaxed cancellation policies A passport won’t be enough, you might need a certificate of immunity, medical approved visa? Travel be defined by purpose as more companies will resort to video especially if employee numbers dwindled and costs are recovered Travel might have seasons where lockdown is on or off based on seasonality and in order to keep demand on healthcare systems manageable. Prices will fluctuate heavily during these ‘seasons’’ Guests will pack differently; hygiene and protection will be priority including ‘desirable’ travel/face masks undoubtedly branded sooner than later. Add these as guest supplies Everyone will take travel insurance, make sure your hotel’s policy now covers pandemic outbreaks, revenue loss and public liability. Air quality will be an advertised feature for planes and public transport, do the same for your establishment Recovery and rate considerations Predictions of speed to market recovery should not be overly pessimistic, but realistic in the short term, middle term and long term corresponding with sales strategy adjustment. Period post lockdown to July: We know local/domestic travel will start first, business or pleasure is unsure and forecast a mix as people have both left ‘to do’ prior to the lockdown. Price based on current occupancy meaning low, Rack less 50. Many experts say ‘don’t discount’ but where exactly will the cash come from; I wonder? We cannot yield as there is no demand. Forecast occupancies 5-15%. Keep 70% of inventory closed operationally to control expenses Period Aug to Oct: more countries would have lifted travel but it will be restricted. We will see increase in international travel but not enough to hike rate beyond 8% on LY especially if the economy is in a recession. Rather ‘welcome back’ than ‘profit back’. Occupancies should be 20-40%, aim for Rack less 35. Only open 50% of inventory operationally could help reduce costs Nov to Jan. Overall increased in all source markets but in limited numbers, aim for Rack less 25. Feb and beyond we should be able to return to some sort of normality which will be ‘new’ in the way we work, live and travel. It will be foolish to enforce strict policies now to end of the year as you will simply push business away. Keep it simple to flat rates that are in line with demand, competitors, the fears emitted by the pandemic and possibly 1 campaign to welcome guests back. Stay safe and take care. Best, Jaco. https://www.visualcapitalist.com/infection-trajectory-flattening-the-covid19-curve/