How to build resilience in hospitality during the Covid-19 pandemic’? Part 4

Good to see you back here! 

In the last articles in the series we have introduced the six resilience dimensions applied to the hospitality sector. First, we covered financial and operational resilience, followed by technology and organisational resilience last week. In this week’s article, we are covering the remaining two dimensions: reputational and business model resilience.

Reputational resilience: “You are what you do”.

Reputation is a broad theme, subject to many different and sometimes competing interpretations. Reputation is a major intangible asset and is something that has grown to be a significant part of companies’ stakeholder value. It demands having a strong sense of self (mission, values and purpose) and basically comes down to aligning these company values with your actions and words. Moreover, addressing societal expectations can be achieved by listening and communicating with your stakeholders. Aside from an added emphasis on hygiene during the pandemic, what else can we do to uphold a good reputation? 

1. Establish and strengthen client relationships and build a client base that is loyal, for example by personally following-up their visits (allow technology to support you!) to get a better understanding of your guests’ experiences and needs that will allow you to serve them better.
2. Communicate in a crisis with your guests and build trust through listening and transparency. What are their expectations regarding your response on Covid-restrictions? A clear personalised and reassuring message, preferably from the owners, is essential. “While you shouldn’t make any definitive statements around issues that are still unclear, do keep clients abreast of any efforts you’re making, either currently or are planning to make in the future.” [1]
3. Adoption of CSR practices not only create reputational gains and customer loyalty but it also holdsimportant implications for retaining quality staff by enhancing their confidence in the sector and particular hospitality businesses operating as ‘caring’ and ‘responsible’ employment providers [2].

Business-model resilience: “Concept of new hospitality”

Low margins, high employee turnover and failure rates make hospitality an extremely difficult industry. “Resilience therefore requires business models that can adapt to significant shifts in customer demand and the regulatory terrain.”  [3] As discussed in previous sections, the concept of “new hospitality” is all about technology, enabling better guest and employee experiences [4]. But how can we build resilience in the business-model? Here are a few key take-aways: 

1. Drive top-line revenue into the restaurant. Even though boxes and take-away services have been exhausted during the pandemic, it can still generate extra revenue. Other examples are to winterise and / or extend your patio to enable year-round outdoor seating.
2. Drive as much efficiency as possible on the bottom line by leveraging tools and technologies that optimise labour, hence payroll.
3. Work with third-party delivery companies. But make sure it can easily be scaled up and ready for the next round of restrictions. However, these services can easily charge up to 30% of commission fees per order. By providing your own delivery service you can avoid these fees and fully own the end-to-end customer experience. This also enables personalised experiences and customised offers for your customers. 
4. As soon as financially able, invest in renovating the establishment with sustainability, improved customer convenience and safety in mind. For example, by putting the emphasis on health-related features such as indoor/outdoor architecture, antimicrobial finishes and high-performance ventilation systems to reassure guests and heighten their sense of wellbeing and safety [9]. Also, it’s time to get rid of those old carpets by investing in solid flooring that looks and feels cleaner. And to replace shower curtains with glass doors.  

Underlying the six dimensions is the critical element of personal resilience. Covid-19 has been a source of unexpected stress, anxiety and adversity for many. It forced business owners to rapidly, and admirably, adapt and respond to ongoing setbacks and restrictions. As resilience is heavily enabled by strong relationships and networks, business owners can become more resilient in the process of connecting with other businesses and even collaborate with competitors to identify and pursue new opportunities [5]. “Ghost kitchens”, for example, are a great way for smaller hospitality owners to set up a joint cooking facility for the preparation of delivery-only meals. Needless to say, personal health, care and being mentally and physically fit will on every front help you to better deal with negative governmental interruptions. 

References

[1] https://www.hotel-online.com/press_releases/release/hospitality-sector-building-resilience-in-uncertain-times/

[2]] https://www.bu.edu/bhr/2017/01/27/hospitalitycsr/

[3] https://www.mckinsey.com/business-functions/risk-and-resilience/our-insights/the-resilience-imperative-succeeding-in-uncertain-times

[4] Hospitality in the Post COVID-19 World By Professor Peter Jones , Dean of eHotelier Academy. https://insights.ehotelier.com/announcements/2020/05/07/new-report-hospitality-in-the-post-covid-19-world/

[5] https://www.harvardbusiness.org/insight/building-our-resilience-in-the-face-of-a-crisis/