CDN Hotel Industry Will Bounce Back As Impact Of COVID-19 Lessens, Says GlobalData
Anna Kroupina, Open Jaw
Canada's hotel industry is being hit hard as occupancy levels dip below 10% during the COVID-19 pandemic, according to the Hotel Association of Canada. But it's a hit that the industry can bounce back from, says Ralph Hollister, Analyst, Travel & Tourism at GlobalData.
“It is imperative that hotels across the globe remember how they have overcome a range of past crises such as natural disasters, the SARS outbreak and acts of terrorism when thinking through their strategies to handle the COVID-19 crisis," he says.
As the impact of COVID-19 lessens and demand increases, it will be "crucial" that hotels act in a proactive manner by effectively managing room rates and property leveraging marketing offers to maximize revenues. Hollister warns that hotels that are the fastest to drop their room rates and who provide the heaviest discounts will often be the last ones to recover when demand eventually returns.
"Many hotels will not be able to return to their normal rates instantly after demand for travel returns. Many guests will not accept this steep hike in price. Hotels that heavily reduced rates due to COVID-19 will have to gradually increase price overtime to avoid deterring customers, this will prolong recovery," explains Hollister.
As many hotels continue to accept reservations for stays many months from now to maintain their revenue streams, a predicament they face is how to price their rooms during and after the COVID-19 pandemic. But most hotel companies aren't rushing to dropping prices too quickly or too severely.
“It will provide long term benefits for lodging providers to hold the line on rate-cutting. However, with a variety of short term financial commitments to meet like bank loans, investor returns and employee pay in the absence of government assistance many will have no choice but to discount room rates to bring in much needed cash," he says.
Anna Kroupina Journalist
Anna is OJ's newest member and she joins the team as a writer/reporter. She co-writes the daily news and covers events. Although she's new to the industry, pursuing a career path in travel/tourism has been a goal since her first family road trip to the Florida Keys sparked a desire to discover the world and this exhilarating, fast-paced industry.