Hotels are now opening up in Spain, Portugal and Italy, as Southern Europe looks to salvage something from its historically high demand summer season.
Governments in Europe are negotiating air corridors to connect lower-risk countries with a view to restarting the tourist season. And domestic tourism continues to boom in the region, as consumers opt for drive-to destinations.
Demand is increasing, as we are seeing from our bi-weekly Pulse Report. The most recent data, comparing web traffic between June 15-28 with June 1-14th, saw the EMEA region continue to see growth especially for July stays with a 52% increase. August showed a 23% increase and September 20%.
Iberia (Spain, Portugal, Andorra & Gibraltar) saw a 25% increase in web traffic for July and a 7% increase for August and September. This followed very strong increases in May,
We caught up with clients operating in the region to find out how they have been preparing to reopen, what has been behind their decision-making processes, and how they have adapted to changes in distribution and demand in order to optimize on what business is currently available.
Reopening Strategies
Pestana Hotel Group is reopening with a phased strategy, with three main vectors.
- Health & Safety. Pestana is opening only those properties that, by their services or physical attributes, can facilitate social distancing. For example, the group will not be opening any all-inclusive offerings right now. Focus is being placed on opening
- Pousadas hotels, which are smaller, more secluded properties that offer outdoor activities.
Demand. Before reopening a hotel the Pestana team considers the demand for the hotel and its location. Focus is being placed on beach destinations and those with outdoor activities.
- Profitability. Pestana is opening properties where it hopes to achieve a higher occupancy.
Pousadas is proving a popular brand to reopen, with six Pousadas properties now operational.
“We do see there's demand for that product. So we will continue with the phased reopenings. We are opening a few other Pousadas in July,” said Catarina Figueiredo, Director of Revenue Management, Pestana Hotel Group.
Palladium Hotel Group reopened its first property, the Grand Palladium Palace Ibiza Resort & Spa, in late June. One of the company’s largest resorts, offering a beach-front campus, Palladium felt this was a good hotel to reopen because of the space it afforded guests.
“It’s the hotel where we have the biggest business mix. We have clients from Germany, from the UK, from Spain, and all the segments are coming too,” said Diego Fernández, Corporate Revenue Director for Palladium Hotel Group.
Following the Grand Palladium Palace Ibiza Resort & Spa, the company will also reopen its Hard Rock Hotel Ibiza and Bless Hotel Ibiza, while in the Caribbean Palladium is preparing to reopen 50% of its hotels.
“We are working step by step, and opening hotel by hotel,” Fernández said.
Revenue Strategies
The revenue team at Palladium is also considering nationality, in addition to segment and channel mix, when forecasting, because of restrictions on travelers from certain countries..
“We now add the nationality for the clients in this forecast. All changes are good in life and this was very helpful for us. We now have more data than ever, and that data is pure gold,” Fernández said.
Pestana is offering a 125% credit on bookings in Portugal that had to be postponed due to COVID-19.
“We want to make sure that the guests that have already booked with us are confident to make a change for another property,” explained Figueiredo.
The revenue team also spent time in Duetto looking at website regrets and denials.
“We have seen some very interesting insights. For instance, we had a property in Algarve, that because we had all of the others closed, was having more denials and regrets than in the previous year. You couldn't see from the bookings but there was definitely more demand for that property than last year, which is something that is completely extraordinary,” Figueiredo said.
Domestic Demand
Both Palladium and Pestana have seen increased demand from their local markets.
“The Spanish people are traveling like never before. Internal tourism this year is going to be very important,” said Fernández.
A recent holiday weekend in Portugal saw strong results for Pestana’s open hotels, with a lot of demand from domestic travelers.
“Definitely what we are seeing in terms of segments is people looking for domestic travel. Pestana Troia Eco-Resort, where we have a different kind of offering with apartments, is our best-selling offer,” said Figueiredo.
“Direct channels are gaining a lot of importance for the recovery. Our websites and our contact center are our fundamental pillars for growth.”
Pestana has rolled out a number of domestic promotions, including partnering with TAP Air Portugal to promote its resorts on the islands of Madeira and the Azores. Customers making hotel bookings benefit from a 10% discount on flights.
Operational Changes
NH Hotel Group recently held a webinar on the changes it was implementing. The company had almost 200 hotels opened by the end of June, and is also still focusing on new openings, preparing its entry into the Irish market soon.
Javier Marmol, VP Experience & Quality, explained the ‘Feel Safe at NH’ 10 operational promises. The company has analyzed every touch point with customers and adapted its plan to local legislations.
The 10 operational promises include:
- Health Inspection Certificates and updated cleaning protocols.
- PPE Protocols. Staff to wear masks and gloves, and PPE to be available to guests.
- Advanced Digital Services. Guests can now use an online check-in, choose their room, online check-out all through a mobile guest platform.
- F&B. Visual menu cards now available on the Stay app, avoid shared table elements such as salt and pepper, single use tablecloth. In-room breakfast is packed in a box and brought to the guest room.
- Social Distancing. Maintaining a 1.5m distance, and furniture and space layout rearranged in public areas.
At Pestana, operational changes have also been rolled out, with all rooms now offering Personal Protection Kits for all guests. Buffets are now waiter service. And the group has also made improvements to its app to facilitate a more touch-free hotel experience, with mobile check-in etc.
At Palladium, the operations team have created a White Book that contains more than 500 measures to adapt their hospitality offering to meet the current health and safety needs.
Looking Forward
The human resources department at Pestana kept all teams busy with a series of internal webinars. The revenue team webinar included an introduction to revenue management and an introduction to Duetto.
Pestana also used the lockdown to redesign its loyalty program, creating an online customer area and offering details of partnerships with TAP and Avis. The group also invested in its Pestana app, offering check in and check out, in-room requests and a chat function.
For the team at Palladium, 2020 has been used as a time to improve skills and focus on 2021. The team used the lockdown to conduct training, which normally they are unable to do when busy. The revenue and sales teams did a Duetto training sprint of one hour every day for two weeks.
“We took this time in order to prepare the team to be better trained for the 2021 season,” Fernández explained.
Top Tips
What would be your one piece of advice that you would give to other hoteliers in other markets, who are preparing to reopen?
Fernández: Be focused on the next year. We are focusing a lot on this year, but this year is going to be very difficult whatever you do. Focus on the next season. Try to reopen. Try to lose less money than by having your hotel closed; that is the objective for this year.
Figueiredo: We need to have a bias for action, and we need to change the way we do things, we can no longer take time in talking hypotheses, choosing the best hypotheses, doing the test then putting that into reality. If we see there's an opportunity we need to go for it.
Agility is definitely something that we need to work on. Everyone needs to be a lot more flexible in their organizations to support profitability and the bottom line.
Sarah McCay Tams, Director of Content, EMEA
Sarah joined Duetto in 2015 as a contributing editor covering Europe, Middle East & Africa (EMEA). In 2017, she was promoted to Director of Content, EMEA. An experienced B2B travel industry journalist, Sarah spent 14 years working in the Middle East, most notably as senior editor – hospitality for ITP Publishing Group in Dubai, where she headed up the editorial teams on Hotelier Middle East, Caterer Middle East and Arabian Travel News. Sarah is now based back in the UK.
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