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The Hospitality Industry & COVID-19

Posted: 08/06/2020 | Author: Angela Ozar for Creatives On Call | Tags: Thought Leadership, Industry News

The Hospitality Industry & COVID-19

Interested in some insights on the Hospitality industry during and caused by COVID-19? Creatives On Call has kept an eye on this industry and would love to unpack some of our findings. Additionally, we work with a plethora of creative professionals that specialize in the many specific areas of the Hospitality industry who could help to hit the target audience for your business. Reach out, we’d love to chat. 

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The economic damage from COVID-19 is catastrophic to nearly every industry, from pet care to retail. One of the sectors that has suffered the most is the hospitality industry. The world looks very different these days. The hotels are empty, airports have less traffic, and the trendiest restaurants have no wait. While old fashion hospitality is timeless, it appears the industry is not. 

The hospitality industry includes a few sub-sectors: hotels and lodging, travel and tourism, food and beverage, and recreation. Let's take a look at each sub-sector of the industry to see what happened when the pandemic hit and where they are now. 

Hotels and Lodging During COVID-19

“No vacancy” is no problem in today’s environment. Hotels are experiencing large vacancies even though they have now reopened. Hotels are on pace to lose up to $400 million in room revenue per day, based on current low occupancy, estimates the American Hotel & Lodging Association

For people that are traveling and need a place to stay, hotels are doing what they can to keep guests safe. Similar to other industries, hotels have disrupted their processes and procedures to adhere to government policies and protect guests. Guests now go through contactless check-in. And there is signage around public areas about social distancing and safety. Contactless service is now a must. 

Hotels are also using a variety of new sterilizing tools and procedures, such as e-mist sanitation devices, checklists, and sealing clean rooms with tape. Management is having daily meetings with staff to go over these new processes.

Like other businesses, hotels are rethinking their marketing efforts. To remain open, they are marketing toward locals who need a vacation but don’t want to travel in the pandemic. Some hotels are using A.I. technology like voice tech to serve guests. They have invested in more mobile technology, getting rid of anything paper in rooms. 

While operating with little staff and low revenue, hotels are pivoting quickly to accommodate guests' safely. Consulting firm McKinsey & Co states the hotel industry may not recover until 2023 at the earliest.

Food and Beverage During COVID-19

At the beginning of stay-at-home orders, restaurants closed their doors, preparing for carry-out and third-party food delivery services only. 

Although carry-out was not enough to carry restaurants through the quarantine, many people opted to cook at home, illustrated by the increase in demand in the grocery industryA survey conducted by the National Restaurant Association reported a loss of $120 billion from March to May of this year. They are expecting a $240 billion loss by the end of 2020. 

While restaurants and quick service are now open under new restrictions, they are operating with fewer staff than before. Restaurants had to lay off workers at the beginning of the pandemic. Some were able to rehire staff with aid from the federal government’s Paycheck Protection Program.

Through COVID-19, restaurant workers are at the front line, like nurses and other medical staff. They are risking their health every time they work a shift because of the contact they have with different people. 

The current crisis has brought attention to the lack of benefits for restaurant staff, such as no paid time off or health insurance. Because a lot of workers have to work to make ends meet – they don’t have a choice. 

With massive losses of revenue and staff, the food and beverage industry will be waiting to see if customers return to eating out like before the pandemic. 

Travel and Tourism During COVID-19

Everyone’s vacation and travel plans have been disrupted this year. Cruises are canceled. Work travel is restricted. Vacations are being rescheduled. 

During an outbreak, tourism and travel is one of the first industries to be affected because it’s a catalyst for illnesses. Air travel spreads viruses at a faster rate. Travel restrictions and advisories are put in place by the government and The World Health Organization as the first line of defense. Even if unrestricted, travel is undesirable for those who are more cautious and at risk of catching the virus. 

This year, people are either staying at home or traveling regionally by car to visit family and friends. So, it makes sense that the hotel industry has so many vacancies. The U.S. Travel Association estimates the industry is expected to lose $505 billion by the end of the year and lose $81 billion in federal, state, and local taxes. The sector is not anticipated to recover until 2024.  

There have been massive declines in domestic flight bookings among popular vacation destinations such as Hawaii, New York, California, and D.C. 

Travel spending saw a slight uptick at the end of May and around the 4th of July due to vacation season. Although excitement and openness to travel are slightly increasing from previous weeks, the majority of American’s are not planning to travel by air until next year. 

People will be traveling less this year, and if they do go somewhere, they will travel by car over flying. Nearly 75% of Americans believe travel will look very different once COVID-19 is over.

Recreation During COVID-19

People are embracing the outdoors for a break from the outbreak. 43% of American’s stated they plan to be in the outdoors more because of the social distancing restrictions, according to a survey done by Civic ScienceHiking and visiting local parks are the top activities seeing a surge of interest. The survey found the younger groups, Millennials and Gen Z, are planning to spend more time outside than older respondents. 

The recreation industry is made up of categories such as bicycling, R.V., fishing, equipment, and campgrounds. With people spending more time outdoors, one would think the industry would be thriving, but that’s not the case. 

The majority of recreation businesses are small businesses, and small businesses are fragile in times of economic distress. Nearly 90% of recreation businesses have had to lay off or furlough employees. 94% of outdoor companies are experiencing significant declines in sales and revenue compared to a year ago.  

For campgrounds and R.V. manufacturers, it’s a different story. A shortened season and new campers have led to the “one of the busiest years for R.V.s and campgrounds” with demand extending into the week. According to a survey by the R.V. Industry Association, 4.6 million people nationwide are planning on taking R.V. trips this year. And they anticipate the number will grow as people can work from home and do online schooling. 

The outdoors is a cure for the coronavirus. As more people, especially the younger generations, are getting outdoors and trying new ways to travel, hopefully, the outdoor recreation industry will be able to recover losses from earlier in the spring. 

Waiting to Welcome You  

The hospitality industry has more availability and less staff post-COVID. People are canceling trips in large masses and don’t expect to travel by plane anytime soon. Instead, they are finding ways to vacation differently to adhere to social distancing and mask rules. Spending time outdoors is definitely on the list, as well as regional road trips.  

The pandemic is making people rethink their go-to travel destinations and restaurants. It will be a few years before the hospitality industry welcomes back guests and regains lost revenue. 

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This is a time for marketers to step up to the challenge and get creative in meeting current demands and behavior changes. Creatives On Call call support your business through this. Contact us here.  We have Marketing professionals ready to start in areas including:

• Strategy & Advisory

• Design and Production

• Content Creation & Management

• Customer Engagement & Experience

• Learning & Knowledge Management

• Digital Technology & Transformation

Learn more here. 

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