We've covered the pandemic's effects on real estate extensively by now. We've mentioned how many sectors have grown during it. Unfortunately, the hospitality sector isn't one of those.

Several news sites have covered the record lows experienced by the Canadian hotel industry. Travel restrictions and lockdown measures have taken a considerable toll. However, the upcoming mandatory quarantine for travellers has been suggested as a possible aid.

Is that the case? Let's find out.

General Rate Dipping for Hotels

CoStar has one of the best recent reports on the subject. Performance metrics for the last year saw severe harm from the WHO's declarations of a global pandemic. According to the article, the drop was immediate: 51% for demand and 60% revenue.

Naturally, occupancy fell 32 percentage points as well, dropping to a 33% average. Curiously, the warmer third quarter experienced the most robust demand levels. It dropped the next quarter again with the second coronavirus wave.

Urban Hotels: Biggest Damage

The drops weren't the same for the entire sector. Naturally, the urban side was the largest victim. Its reliance on group business resulted in more substantial declines than other categories, like resorts.

In general, limited-service hotels suffered fewer drops. Despite severe dips, the luxury sector also fared better than urban hotels. The need to avoid large crowds was the biggest hit for the urban sector. However, it favored smaller towns for leisure travel.

Hotel Supply

On the other hand, supply growth has remained relatively strong despite the pandemic and performance drops. The same CoStar article explains that the country has seen 5,000 new rooms opening.

Expectations for this year and the next one are also promising. However, experts estimate a volume drop in 2022 because of project opening delays. Hotel transactions also experienced a 19% increase from repositioning and hotel sales.

What Can Hotels do to Cope with this Crisis?

Luckily, things are unlikely to remain grim forever. This fall in hotel demand also comes from countless canceled trips. As time goes on, the wish to travel grows—especially with health measures demanding us to stay home.

That's why the list of tips from Hospitality Net relies mostly on this demand. Additionally, the promise of a potential vaccine for this year can also play a huge role in enabling travel again.

An Approach in Three Phases

The article breaks down the approach in three phases. The first phase touches on damage control as long as travel remains paused. The advice for hotels is to keep in touch with their customers via social media. While closed, hotels should strengthen their brand.

The next phase is the initial demand boost for travel. It should occur as regulations begin to ease, possibly including the vaccine's release as well. During this stage, hotels should boost their brand awareness. That also includes encouraging guests to book stays while adapting the experience to the industry's recovery.

Finally, the last phase starts after the initial boosts. It continues as demand goes back to normal, indeed once the vaccine is accessible. Marketing is still vital, but it'll probably go back to the standard. That includes creating packages and targeting your regular demographic.

The Ten Tips for Recovery

The article breaks down the approach in three phases. The first phase touches on damage control as long as travel remains paused. The advice for hotels is to keep in touch with their customers via social media. While closed, hotels should strengthen their brand.

The next phase is the initial demand boost for travel. It should occur as regulations begin to ease, possibly including the vaccine's release as well. During this stage, hotels should boost their brand awareness. That also includes encouraging guests to book stays while adapting the experience to the industry's recovery.

Finally, the last phase starts after the initial boosts. It continues as demand goes back to normal, indeed once the vaccine is accessible. Marketing is still vital, but it'll probably go back to the standard. That includes creating packages and targeting your regular demographic.

Aligning marketing with revenue management

Your recovery plan needs coherence with your revenue management and channel parity. Your booking perks, packages, special offers, and policies must align with each other. Your recovery strategy should dictate your marketing approach.

Improving websites

People will likely remain hesitant against crowds and visiting installations if it's not necessary. Your website should contain all the information they need to book their stay. Relevant information includes opening dates, health precautions, nearby attractions, and special offers.

Being flexible with cancellations

This advice lets you reassure potential guests that their bookings aren't a risky investment. With the importance of direct booking during recovery, flexible policies will prove critical to encourage visitors. It also helps develop brand loyalty.

Working with direct booking

Shifting distribution toward your direct channel will prove the most effective approach to boost your bottom line. The article mentions most revenue managers are planning to focus on OTAs. However, keeping healthy distribution mixes is still essential to maximize revenue.

Updating assets and information

All your digital assets must be up-to-date to make booking easier (and thus more attractive) for potential guests. Updates include whether or not your hotel is open and prevention plans. The mentioned flexible cancellation guidelines are also important.

Encourage re-booking over cancellation

You must try to recapture your bookings to maximize your profits. Remember that cancellations are bookings you've earned already. That means convincing your guest will be easier a second time. Implement email campaigns to encourage re-bookings with bonuses.

Consider feeder markets

The article mentions expectations for feeder market demand to pick up, especially with cautious customers booking a few months beforehand. Therefore, hotels should adapt their purchase offers accordingly during initial demand spikes.

Marketing according to demand increases

Demand won't be steady during the initial months. That means your strategy has to adapt to these swings appropriately. There's not much we can do to predict what every month will bring, so remember to check relevant news to update your approach.

Implementing CRM software

It will help if you stay connected with your customers, both past and new ones. Salesforce and similar apps can prove invaluable during recovery. You can create automated campaigns for capturing leads and promoting special offers.

Prioritize loyalty members

Finally, remember the benefits of brand loyalty. People familiarized with your brand will be more likely to book despite the uncertainty. Remember who these clients are and reward them accordingly.

What About the Obligatory Hotel Stay for Traveling? Could that Help?

Recently, the Canadian government announced new COVID-19 measures in the country. One of these measures includes obligatory hotel accommodation for travelers entering the country.

Luckily, the official Canadian government website has plenty of resources explaining these measures. As a general rule, the government recommends to postpone or cancel most travel plans.

The measures for exiting the country aren't too complicated. Entering is when things get complicated. For starters, travelers need to offer evidence of a negative molecular test not longer than three days before their departure time.

Other upcoming requirements include taking another test during arrival and spending three nights in an approved hotel until results arrive.

What Does this Mean for Travelers?

Air travelers will face the brunt of these measures. Firstly, they need to stay in an approved hotel around one of the airports taking international flights. That means the Vancouver, Calgary, Toronto, and Montreal-Trudeau international airports.

They must stay for three days in one of these hotels, except for specific, not-yet-disclosed cases. They also have to stay in their rooms until they have their test results, as mentioned. The main issue comes with the costs. They're responsible for paying for their rooms, food, transportation, security, and control.

They'll need to receive negative results and provide evidence of having a quarantine plan before they can leave the hotel. They're free to spend the rest of the two-week quarantine where they planned.

What Does this Mean for Hotels?

Not all hotels are eligible for quarantine. While still unreleased, there will be selection criteria for which hotels make it into the list. For now, we can rule out any hotel away from the aforementioned international airports.

Once the application process is made official, hotels will be able to assess the requirements. Those interested must submit an application form once the process opens. However, it's necessary to visit the official web page for updates.

Final Thoughts

The government hasn't released an official list or application process yet. Nevertheless, the measure is almost guaranteed. That means that preparation is vital. For now, our best advice is to wait and apply as soon as the list releases.

Additionally, we hope that our content and tips are helpful even for non-eligible readers. Make sure to stay on top of official announcements so that you don't lose your chance.

Assetsoft - Blog #Quarantine

The Record Level Dip In Canada's Hotel Occupancy/Revenue: Will The Upcoming Mandatory Hotel Quarantine Help?