After the reality of the pandemic set in by mid-2020, like other hotels, we suffered severe monthly losses – mainly as a result of high fixed energy costs and an inflexible monthly payroll which are both hard to avoid in our industry.

We managed to make a monthly profit relatively quickly due to the governments fast action to control Covid19 and, while it took us until October to be back to budgeted profits, the assumption at that time was that by Q2 2021, we would be back to normal business levels.

That proved not to be feasible, and we are now assuming an ongoing financial impact through to the end of Q3 2022. The opening of the Hong Kong and international borders have been delayed and the impact of each occasional breakout generally affects confidence levels for the following month or two resulting in reduced travel.

A changed market.
Besides the financial aspect, we noticed changes in the type of tourism we are ‘serving’ as well as in patrons needs and aspirations.

For one, China domestic tourism has recorded a substantial growth, a very positive and sharp trend.
A positive development for Shenzhen, a city historically not seen as a strong tourist destination given it’s nature as a business city. People miss travel and resorts and as an alternate strategy given softeness in business travel, hotels have been appealing to visitors for a staycation or within-their own province travel destinations, during weekends and holidays when people may not have confidence, or be allowed to travel far away.
As result of this, we saw a 15% growth in the share of business from Guangdong – our own province – and an increase in arrivals from Sanya, Chengdu and Hangzhou at the expense of more traditional feeder markets such as Beijing and Shanghai. Domestic market mix contribution to our business grew by 18% when compared to the same period in 2019 replacing our international business share.

In general, occupancy and pricing of the international resort hotels, at the beaches on the eastern outskirts of Shenzhen during August 20202 – a key vacation month – grew by double-digit percentages when compared to 2019. .

Likewise, during May 2021 labour day break- one of the most popular times to travel in China second only to Chinese New Year – the government encouraged people to travel and did not impose restrictions. The results of this initiative were astounding with hotel revenues breaking all records of previous years right across the country. Luxury hotels in Shenzhen recorded an increase in room revenue of the 44.3% vs the same period in 2019. The first 3 days of the holiday recorded our highest nightly room revenues ever.

In the meantime, obviously business tourism has suffered.

Despite the fact that in Mainland China, people in general normally prefer face-to-face meetings., we noticed that – despite returning to a sort of normality – , business travellers occupancy recovery has been lower than expected.
We noticed small revivals, however, we have also noticed that, as soon as an outbreak is announced in some cities, people quickly opt for meetings on zoom (or other forms of online meeting platforms)

According to the results of the programs we have rolled out globally across our company, there has been a clear uptake in the popularity of smaller onsite meetings, perhaps ‘digitally joined’ by a larger number of attendees participating jointly. Remote meetings have become the norm, although, of course it remains to be seen whether this trend will continue or not. We believe to some degree that future travel patterns will likely be impacted as a result of companies weighing up the benefits and costs of each approach. Indeed, the combination of travel restrictions, working from home policies, and general uncertainty has meant many business events are being cancelled and overall business travel has been significantly reduced.

And a customer centric one.

Most importantly, the uncertainty created by the pandemic has changed customers ‘state of mind’, expectations and needs. Travelers easily face the sudden imposition of new restrictions, or even test positive for the virus being forced to cancel or re-plan their vacations.
In this situation, the industry must reply to customer needs with flexible cancellations policies avoiding friction with the clientele.

Likewise, it is necessary for us to adapt to new demand patterns which make forecasting (and therefore make effective dynamic pricing) difficult. This is a critical factor for profitability in the hotel business. Booking lead time is getting shorter; guests don’t want to commit early due to lingering uncertainty (this year to date more than 75% of individual travelers to our hotel prefer to make their reservations on the day or just 1 day in advance). Travelling is more dependent today on government restrictions -which may vary from country, to province, to city as well as institutions – schools and companies policies.

Safety and security are now top priorities for travelers.

Hospitality operators need to focus on conveying the importance of these to our guests and clearly communicating our efforts in this area. Customer requirements in the area of room cleanliness has become a focus, and what was once taken for granted as a “clean” room now needs to be a “virus-free” room.

Interestingly, according to a March 2021 survey on “public opinion on improving comfortability of hotel stays worldwide 2020” 60 percent those who replied stated that they would be more comfortable staying in hotels after the coronavirus pandemic if there is an increased frequency of cleaning and disinfecting procedures. Comparatively, nine percent of replies were in favor of temporarily suspending some hotel services such as spas, casinos, and restaurants.

As a result of this, hygiene standards and such things as contactless travel options have become much more powerful in attracting guests to a hotel.

The majority of big hotel chains – including ours – have come up with numerous standard protocols in this area , making sure guests are aware of our efforts as this is much more important than ever before. These include some that are clearly visible – such as hand sanitizer dispensers throughout public areas and partitions between treadmills in the gym – and also many others not immediately perceivable to visitors – such as back of house cleaning routines, food inspection protocols upon receipt of ingredients.

Travel convenience, safety, and well-being are the leading requirements in the travel industry as of now.
Notwithstanding that, we need also to make sure our destination and hotel maintains and expresses a warm hospitality and experiences.

Particularly, our new generation visitors – whose travel habits are likely to be the least effected once the restrictions and precautions have been lifted – are looking forward to continue exploring and learning from unique experiences, which could also allow them to better share and stand out on their social media. We believe that older travelers and those with families are likely to remain cautious for a longer period of time.
Once guaranteed the safety, however, it is important to remember they ultimately travel to ‘escape’ to a different dimension and our service and attentiveness should support their aspiration.