City Lodge Hotel Group says that the Covid-19 pandemic caused significant changes in both the consumer and business environments and will continue impacting hotel business strategies long after the threat of the virus recedes.
“The Covid-19 pandemic changed life as we know it, probably forever,” it said.
The hospitality chain, which boasts 63 hotels under management and in excess of 8,000 rooms, said that recent changes in consumer behaviour and travel habits include large-scale digital adoption.
A consumer survey for Skift and Oracle’s 2020 Hospitality Recovery report found that more than 68% of travellers expected ‘self-service and contactless check-in options’ for future hotel stays. “Technology can heighten a guest’s experience of luxury and convenience while unlocking efficiencies for the hotel,” it said.
It noted that average occupancy rates have fluctuated between 26% and 28% in 2021 to date.
The way that hotels operate and serve guests has also changed, the group said. Many travellers will only book accommodation when they trust that health and hygiene policies are in place, often favouring accommodation with stringent sanitisation and screening procedures.
Consumer work and leisure habits have also shifted. In November 2020, an analysis by McKinsey & Company estimated that as much as 20% of the global workforce may continue to work from home even after the pandemic.
“This points to a significant adjustment in how those employees plan their vacations and business travel and how they will select accommodations. People may look to book longer trips that combine work and pleasure, more than they ever did before.”
It said that the trend is also towards localised travel, which is easier, safer and often more sustainable for the guest. CLHG said it experienced evidence of both these trends.
“The group is, in particular, accommodating a growing number of guests who live as close as 5km from their CLHG destination and are simply looking for a change of scenery. Durban has grown in popularity because of it being easily accessible by road from much of South Africa. Air travel is perceived as carrying a higher risk of infection than road travel.
In line with pre-Covid-19 trends, the group said it expects to see a more eco-conscious mindset in 2021 and beyond.
“The pandemic sensitised people to their impact on the environment and local communities. These changing attitudes are filtering into the way travellers choose their hotel, guests prioritise those with eco-friendly construction, energy-saving and good waste management practices.”
In response, CLHG said it continues to advance in its sustainability journey by exploring both minor and major methods of reducing its carbon footprint while improving operational efficiencies to save resources. “The new hydration stations and the all-new amenities range at our hotels limit single-use plastic waste-to-landfill.”
The chain launched a new range of amenities free from single-use plastic and have introduced hydration stations for free magnesium-enriched filtered water, reducing the need to purchase bottled water.
Group CEO Andrew Widegger, said: “We used the quieter time to implement several innovations in enhanced health and safety protocols, exciting new food offerings, digitalisation, environmentally-friendly solutions and a range of special offers that allow guests to access our top-of-the-range services for less.”
CLHG introduced a range of eat-in and ‘grab-and-go’ options, and introduced contactless solutions like online check-in, QR codes for menus and WhatsApp communication with staff.
“When operations slowed, we used the opportunity to explore and implement improvements to the CLHG business model, operations, messaging, and pricing methodology,” it said. “At our new Courtyard Hotel Waterfall City, room doors, air conditioners and televisions are now controllable by mobile phone.”
“We are currently operating in an exceptionally low occupancy environment that is shifting the competition towards pricing and promotions. Coupled with the discounting already prevalent throughout the hospitality industry, pricing cuts exert downward pressure on the group’s revenue and profitability,” Widegger said.
“By far the most significant efficiency introduced in this period was our new revenue management model, which flexibly adapts room rates per demand. The data from CLHG’s new AI feeds into our BAR methodology, enabling each hotel to respond to market trends.”
CLHG said that Covid-19 accelerated the infusion of new technologies and applications into hotel operations. Tech features that might have been introduced as novelties or extra conveniences are becoming necessities in an era where some people are wary of even stepping outside their doors.
“As we move into the ‘new normal’ and hotels reopen for business, the expectation for customer experience is higher than ever. One of the biggest highlights for the year was the launch of our AI predictive demand analysis tool to assist general managers to understand demand trends and aid in determining the best available room rates for guests,” it said.
Poor service delivery
Poor service delivery, limited infrastructure investment and funding challenges hamstrung South African municipalities’ capacity to supply water and electricity to ratepayers. “Inconsistent water supply and unreliable electricity provision affect hotel operations and guest relations,” it said.
Shareholder returns are also impaired by additional rates and property taxes increases in conjunction with above-inflation growth in the cost of water and electricity, it said. As a result, the group moved to enact the following:
- Reducing dependency on the national energy grid with solar installations at 25 hotels.
- Installing backup diesel generators at hotels.
- Investigating alternative water and energy supply options.
- Maintaining sustainable energy management programmes at each hotel that focus on operational and technical efﬁciencies.
- Using borehole water for property maintenance at some South African hotels.
For arriving guests, they can expect the following procedures:
- Health screenings for both guests and staff upon entering buildings, which includes sanitization of hands, temperature check and questionnaire.
- Social distancing signage and enforcement of best practices by hotel management.
- Specialised deep cleaning using a leading polycide chemical.
- Strict room cleaning policies to eliminate cross-contamination between rooms.
- Individually packaged food service to ensure you receive a tasty meal with limited risk.
- Ongoing training to keep staff informed and well-versed in best practices.
- Periodic independent Covid-19 Risk Assessment Audits by FCS, a reputable third party.
- Personal protection equipment, such as face masks, gloves and aprons, to be worn by staff at all times. Guests to wear face masks in public areas at all times.