Fresh ideas for surviving future crises in the hotel business

Copyright photo : Switzerland Tourism/Ivo Scholz

A World Café was held at EHL Hospitality Business School on July 5th, 2022, as part of an EHL faculty conference on the topic of “Transformational resilience in the hospitality industry”. The event was an opportunity to exchange ideas on the impact of past crises and future preparedness with 50 hospitality industry practitioners, researchers and economists. It was organized by Professors Emmanuel Fragniere and Roland Schegg (HES-SO Valais-Wallis), Stefano Borzillo and Augusto Hasman (EHL Hospitality Business School). The team was supported by Thomas Straub (EHL), Sarah Balet and Anne-Sophie Fioretto (HES-SO Valais-Wallis). This article presents an overview of the discussions, divides in 3 sections: crisis management, role of institutions and government and towards the future.

1.    Successes and failures: management of crises in the hotel industry 

HR’s capital role 

Listening to employees, engaging with them, recognition, support and building trust were the key roles of HR to manage through the crisis. Hoteliers had to particularly work on building trust and resilience in their teams while maintaining relationships with guests. Managers had also to be agile around logistics and staff deployment.

The crisis as an opportunity and strategies for adaptation at the asset level 

The Covid crisis presented diverse opportunities to the industry. Many hotels were put up for sale enabling acquisition strategies. The window for renovation work, often difficult when a hotel is fully functioning, was increased. The crisis pushed hotels to rethink their medium- and long-term strategy and they took the opportunity to make fundamental changes to their approach and ways of working.

Searching for synergies between divisions, departments, teams and function within the hotel

What keeps collaboration "dynamic, agile, flexible, and adaptive” (to the situation) is to work across organizational silos (e.g., divisions, departments, functions). This mode of transversal collaboration has fostered the search for innovative solutions during the crisis. It was agreed that this needs to be sustained rather than return to pre-crisis state.

Cost, cash flow and liquidity management

Some participants mentioned that they had to try to reduce costs as much as possible and, at the same time, maintain liquidity/operational cash flow - in anticipation of uncertainty. Some even mentioned that the cost savings they made allowed them to build up some cash reserves, which they now believe can be reinvested.

2.    The role of institutions and government during the crisis: what worked and what needs improvement 

Institutions that matter

Central government, municipalities and other ‘umbrella associations’ were identified as having been decisive in the management of the crisis, vitally through their management of the transmission of information. The hoteliers underline the reactivity and dynamism of the professional associations, as well as the initiatives of the State.
Hotel and tourism schools also played a constructive role for the sector in terms of reactivity and development of management tools.
An interesting social phenomenon grew as hoteliers have come together as a community, perceiving themselves globally as "colleagues" rather than competitors as they used to be.
Tourist offices were perceived by the participants as relatively "powerless" stakeholders, being too passive during the crisis. 

The missing piece of the crisis management puzzle

Hoteliers unanimously believe that it is absolutely necessary to maintain a collective state of mind. They need to anticipate certain crisis scenarios to become more reactive in the context of support measures offered to increase resilience. They also suggested it would be prudent to create crisis management process guidelines. Finally, it is absolutely necessary to diversify the markets and to raise awareness or to support stakeholders, in order for them to be able to always "reinvent" themselves.

A lack of "neutrality" on the part of certain commercial stakeholders

Some of the tourism/hospitality industry stakeholders (travel agencies, OTAs, online platforms) are perceived as lacking "neutrality", in the sense that these stakeholders favoured customers/travelers over hotels during the crisis. Hoteliers demand that in the future these stakeholders give the same degree of importance to hotels as they do to travellers/tourists.

Proactive support from hotel and tourism-related regional and national organizations lobbying bodies (e.g. Hôtelleriesuisse, Association Romande des Hôteliers, GastroVaud, Tourist offices)

These professional organizations should actively promote the idea that the hotel business is a "real business" requiring real skills. Staff and hotels can capitalise this recognition to develop a professional career in this industry. This is an important message to communicate if hoteliers want to reinforce the attractiveness of the hotel sector for future collaborators/employees.
These commercial and lobbying stakeholders should also coordinate themselves better to manage new crises. 

3.    Crisis management preparedness: towards the future and new innovation strategies

Empowering staff

A huge amount of work needs to be done to upgrade hotel jobs, especially difficult tasks such as room cleaning. Participants agreed that difficult tasks should not be outsourced because externals may not have the same commitment as direct employees. Hoteliers will probably also have to work with fewer employees but with more responsibilities and, on a positive note, higher salaries!
Hoteliers must cultivate the solidarity of the teams by valuing people from recruitment through employment and ending their employment on a positive note.
Participants objected to the concept of the “uberization” of the hotel industry, often mentioned by experts in the field. They all agree that this is contrary to the very nature of the hotel business and that it is better to invest in people.

Don’t forget nor neglect the essentials

It will be necessary to rethink the relationships between stakeholders and encourage better collaboration between owners and hotel groups.
There is a desire to focus on the human element and to refocus on the needs of the customer. Thus, favouring a holistic approach where the hotel becomes a destination on its own organising activities to attract tourists. It will be increasingly important to create flexible venues e.g., retirement homes, student residences, rental spaces for recurring children's activities, etc.
Of course, hotels will need to continue to create a strong identity to differentiate from their competitors.

Technology as an enabler

Technology must support hotel activities, and not vice versa.
Digitalization is not valid for all customers. It is important for some segments of the hotel industry - like Events and Business travelers - but not for premium stays and experiences. Technology cannot replace the human touch. However, having high quality wifi for the business clientele is important. Post-COVID, the technical and technological requirements in terms of telecommuting and conferencing of business customers are higher.

Sustainability is not a gimmick

For hoteliers, sustainability is not only a set of technical standards, but also important for a hotel’s culture. Sustainability is for example about prioritizing local suppliers’ offers and services.
The notion of slow travel is often evoked with the corollary to better consider the concept of mobility in the hotel offer in general. Thus, the participants are convinced that the change in the way of traveling will influence the length of stay and the target markets. 

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