How Are Hotels Surviving During COVID? Extreme Makeovers, Innovative Business Promotions Keeping Industry Afloat

Months after hotel occupancy bottomed out — just 22% of rooms were filled in March as coronavirus fears surged — things are starting to look up again for the U.S. hotel industry.

Occupancy rates were hovering around 50% by the end of the summer, though the industry is bracing for more waves as the weather turns colder.

Still, the industry has seen a major uptick after being weakened by the pandemic. There are plenty of reasons as to how the hotel and vacation-rental operators have gotten back on track.

Let’s make a deal

With an average occupancy rate hovering around 50%, hotels are still struggling mightily worldwide. Safety-savvy deals are one-way hotels are coaxing guests to check-in.

Consider SIXTY Hotels, which operates three stylish boutique hotels in New York City and Beverly Hills that remained open during the pandemic. To court guests, the group refocused their marketing and sales on safety, local markets and social distancing, while fashioning deals that marry a discount or upgrade with timely amenities, like a Stay Safe package that includes a fabric face mask. Deals also address COVID-related restrictions. To gain access to the SIXTY LES rooftop pool guests must book the Paradise Pool Package.

“This helps us control capacity levels for proper social distancing. We’re seeing a great response to it,” SIXTY Hotels co-founder Jason Pomeranc told International Business Times.

Service with a text

With strict limits on face-to-face contact, providing personalized service has become a challenge for the industry.

“Before our guests arrive, they get a phone call from the innkeeper, who goes over the protocol for their stay,” said Sharon Rooney, public relations director at Four Sisters Inns, a California chain of 16 boutique hotels that reopened in early July.

Individually wrapped homemade cookies are left in guest rooms instead of in the lobby cookie jar. A mini-box containing a bottle of wine, glasses and wrapped fruit and cheese replaces evening wine tastings with a vintner. Staff can’t enter a guest room once a guest checks in.

“Our entire team had to be retrained,” Rooney said.

The group follows California Hotel & Lodging Association guidelines in determining which services they can provide.

“Guests can use swimming pools and outdoor cabanas if social distancing is observed but not hot tubs or spas,” Rooney said.

The group is constantly updating their procedures. Four Sisters recently introduced a guest-messaging system to facilitate contactless communication.

“If a guest needs anything, they send a text, whether it’s additional towels or information about which wineries are open. If coronavirus had happened in the ‘80s, all of this would have been a lot more difficult,” Rooney said.

More than a hotel

Plagued by a glut of empty rooms, hotels are rethinking their operations, from reopening as a members-only residential club to refitting the property to house the homeless.

“They’re thinking, ‘Can I convert this ballroom into a workspace?’” Kate Walsh, Dean of Cornell University’s School of Hotel Administration, told IBT. "Can I appeal to businesses who need to socially distance their workers?”

There is also a rethinking of amenities long-deemed essential like fitness centers and food services.

"Is this the opportunity to put a Peloton in a room and charge a price premium? And how do guests feel about minibars? Will there be a change in how much time guests spend in their rooms? I think hotels are open to everything, and they’re trying to think creatively," Walsh said.

With very few tourists and business travelers, the Cordis Hotel in Hong Kong is attracting local guests with screenings of movies like “Avengers: Endgame” in their dormant ballroom, outfitted with six, socially distanced king-size beds. Guests get a ballroom bed and gourmet treats for the movie, a room for the night and discounts throughout the hotel.

“The inspiration was movies on the lawn,” said Shane Pateman, managing director of operations. “Staycation packages like this are also a way to encourage guests to explore the other services we offer, like our restaurants and spa.”

Home away from home

Vacation rental home businesses have redirected marketing to highlight home offices instead of hot tubs and promote local farmers' markets and food delivery services so guests can self-distance.

“Typically, renters are looking for properties up to a nine-hour drive from their home,” said Sharon Keefe, a vacation rental consultant in Lake Geneva, Wisconsin.

That equation has worked well for Beachcomber Vacation Homes in Cannon Beach, Oregon, which is within a driving radius of company headquarters for Nike, Amazon and Microsoft.

Unexpected work-stay bookings have helped make up for cancelations by guests who planned to fly.

“We had people who said, 'If I can work remotely, why not do it at the beach instead of in an apartment in downtown Seattle?'" said Brian Olson, co-owner of Beachcomber Vacation Homes.

A new identity

Ancillary businesses that depend on hotels have also suffered.

But a bad break can turn into an unexpected opportunity. One such company that seized the opportunity is Porter & Sail, a 6-year-old mobile concierge platform whose business was wiped out when the pandemic struck.

“Within 48 hours, we launched an entirely new business,” Caitlin Zaino von During, co-founder and CEO of Porter & Sail, told IBT.

Aiming for a venture that would bring quick funding to cash-strapped hotels, Porter & Sail used restaurant gift cards as a model and created Hotel Credits, a platform that lets guests purchase credits for a future hotel stay at a discount.

A $200 credit is worth $300, $2,000 credit buys $3,000 -- the hotels set the price equation. Hotels reap a much-needed cash infusion, and guests receive a discount for a stay within two years.

“We didn’t know if this was going to work, but the data has shown that consumers really want to travel, maybe not next week or next month but maybe a year from now,” Zaino von During said.

“We do expect this business to last beyond the pandemic.”