IE 11 is not supported. For an optimal experience visit our site on another browser.

6 tips for surviving a hotel downturn

How will an economic slump affect the hotel industry? And more importantly, how will it affect hotel guests? Amy Bradley-Hole takes a look at how resorts handle recessions.
/ Source:

You’d be hard-pressed to find a business these days that’s not feeling the effects of our slowing economy. Hotels are no exception.

But let’s be honest. We don’t feel too sorry for companies that are suffering. We just want to know how their suffering is going to affect us — for better or worse. So what can travelers expect from hotels that are feeling the pinch?

Here are a few of the changes I expect to see.

1. Service may suffer
One of the best ways for a hotel to save money is to slash staff. Middle managers are often cut first, and their absence, quite honestly, may never be noticed by guests. But next to be sacked are often front line “high touch” employees, such as front-desk agents, housekeepers and room service attendants. Hotels trying to save money will run skeleton crews, and guests will notice a decrease in service. You may wait in line 30 minutes to check in, or your room service order may not be delivered for an hour or more. Administrative assistants at corporate offices may also lose their jobs. This means that it will take longer for your complaint letter about the long waits to be read and replied to.

2. Hotels may begin outsourcing
Outsourcing can definitely save resorts money. Hotels these days are outsourcing housekeeping services, security services and food and beverage services. I’m seeing more and more of it, and I think it stinks. I’ve yet to see an outsourced department at any property that does an outstanding job. Instead, I see outsourced employees who aren’t well-trained, who don’t follow standard operating procedures, who don’t comply with uniform standards. They don’t plan on working their way up in the company and they don’t buy into the corporate culture. They walk in the door, serve their time and get a paycheck. No surprises here — this just leads to more poor service for the customers.

3. It’s time for a facelift
Most hotels are putting expansion plans on hold — investors aren’t pouring money into new buildings these days. But if existing hotels are suffering from low occupancy, it can be a great time for refurbishments. Empty rooms and floors can be shut down completely for quick and easy remodeling projects, and empty parking lots can be repaved. And since contractors aren’t building many new houses these days, hotels can hire them fairly cheaply. Hotels may just come through this slow time looking more beautiful than ever.

4. You’ll find lower rates — maybe
Travelers tend to think that hotels will drop rates substantially in order to draw in more customers during slow periods. Don’t count on it. They may offer special packages or promotions here and there, but rates can’t go down much. Hotels would have to book lots of extra room nights to make up for lowered rate revenue, and that probably won’t happen. After all, people aren’t forgoing travel because hotel rooms cost too much. They’re forgoing travel because everything costs too much these days. Hotels have to pay the bills, so rather than lower rates on an ongoing basis, they’ll just look for people who’ll pay the regular rates. Which leads to my next point ...

5. Hotels will be searching for new segments
A “market segment” is a group of people that hotels try to cater to and court. A downtown hotel goes after the business traveler market segment; a beachside resort goes after the family market segment. Any hotel that suddenly finds itself with empty rooms will start trying to find new market segments. They’ll be searching for anyone who is still spending money. For example, foreign tourists still have some extra cash (for the time being), so hotels are concentrating their advertising dollars in overseas markets. You may soon find that your favorite property has a new feel, and may be catering to the needs of customers who are not like you.

6. ‘Going green’ will help cut operating costs
All those things I wrote about in my may happen sooner, rather than later. Doing less laundry, turning off lights, turning up the thermostat in common areas — all of these things reduce costs immediately. Although hotels will make these changes simply to save money, I guarantee they’ll send out loads of press releases bragging about their new environmentally-friendly policies.

Let’s hope hotels don’t screw this up. I’m worried that they might get so attached to the money they save from outsourcing and hiring freezes that they decide to keep these changes after the economic tides have changed.

Travelers already have to put up with plenty of lousy service when on the road. Hotels don’t need any excuse to provide even worse service on a long-term basis. I hope hotels will cope for the time being, make some positive changes and then bounce back when things look up.

Amy Bradley-Hole has worked in the hotel industry for many years in many different positions and at all types of properties — from small luxury boutique hotels to large resorts, both in the United States and abroad. or on