The global hotel industry has found itself at the forefront of the coronavirus pandemic. The impacts created by the virus have been severe for the industry and have left many hotels in limbo, with a growing number teetering on the brink of collapse.
Because of these unknown circumstances, benchmarking and data analysis will take up an even more important role for all types of hotels. Through the use of these tools, hotels can compare and analyse how they have managed the current pandemic in comparison to their competitors. Effective benchmarking is needed in order to stay competitive. Achieved through data analysis, it allows hotels to gain up to date insight on changes in demand, when to adjust rates, how to forecast revenues and what strategic initiatives they should set up.
In unprecedented times like this, uncertainty can be eased through the use of historical data. Hotels need to assess historical trends from their competitive sets in order to find the areas in which they typically underperform and identify the costs that are created through this underperformance and what can be done to improve this. Using operational benchmarking provides an array of benefits, it allows hotels to both find cost-saving opportunities to make operations more streamlined during these difficult times and then improves the likelihood of them reducing their recovery period as restrictions are lifted on global travel.
The length of a hotel’s recovery period will greatly depend on the characteristics of each specific market in which the hotel is operating. Tracking key performance indicators (KPI’s) on a monthly basis is fundamental to increasing the accuracy of forecasts and creating relevant strategies amidst this time of uncertainty. For example, based on the latest market trends, hotels may be able to see which traditional demand segments will come back first.
A factor that is becoming more obvious in the hotel industry as time goes on is that an increasing number of hotels will use debt restructuring methods or will be forced in to administration due to the impacts created by Covid-19. Discussions will now start to begin between lenders and landlords and the hotel company/business that they are dealing with. Benchmarking is also important for this scenario and lenders and landlords will want to see how the company/business has performed in comparison to its competitors. If the entity has over-performed or under-performed, lenders and landlords will be able to assess its chances of recovery.
Through the use of effective benchmarking and data analysis, hotels can explain to lenders and landlords how they can restructure post-Covid-19 to become more agile and efficient in order to fix the current situation they find themselves in. This increases the chance of lenders or landlords believing in a hotel’s ability to become profitable in the future.