Asia-Pac hotels taking 'strategic' tack with Covid-19, NUS study finds

Singapore

DESPITE the hit to business from the Covid-19 pandemic, hotels in the Asia-Pacific are less likely to lower room rates than hotels elsewhere.

That's even as the priority for three-fifths of regional hoteliers is on building occupancy, which has fallen by more than 15 per cent since the deadly disease emerged from Wuhan.

Researcher Sherri Kimes, visiting professor of analytics and operations at the National University of Singapore, told The Business Times that the Asia-Pacific industry response has been "much more strategic in nature", based on lessons from earlier downturns such as the severe acute respiratory syndrome (Sars) crisis of 2003.

Prof Kimes, from Cornell University's School of Hotel Administration, has been polling more than 930 hoteliers around the world, including 19 respondents from Singapore.

Just 46 per cent of regional hotel players are tapping lower rates to woo guests, compared with 54 per cent in Europe, Africa and the Middle East, and 57 per cent in the Americas.

Instead, the Asia-Pacific is turning to tactics such as value-added packages and promotions, and new market segments, her study has found.

Along those lines, Arthur Kiong, chief executive of Far East Hospitality, told BT that while leisure travel has declined, his sales teams are "proactively targeting" more resilient industries, such as online businesses, engineering and construction.

According to Prof Kimes, Asia-Pacific hotels are rolling out the tactics that were identified as effective during not just Sars but other downturns, like the Asian financial crisis of 1997 and the global crash of 2009, as well.

"They are also more likely to close some of their facilities or schedule renovation during this downtime," she said. "At the same time, they have leveraged their loyalty programmes and used targeted promotions."

But whether these tools and tricks manage to pay off remains to be seen.

When respondents were asked to rate each tactic on a scale of one to five - with five indicating that the tactic worked very well - scores hovered around three, which Prof Kimes described as "a moderate effect".

Most Asia-Pacific hoteliers started to feel the hit from Covid-19 as early as January. Since then, 44.8 per cent have seen revenue per available room drop by more than 30 per cent, while 74 per cent reported occupancy falling by more than 15 per cent.

Nearly seven in 10 regional players think the Covid-19 outbreak has been worse than Sars, and "industry leaders believed that the hotel industry would continue to be affected by the coronavirus for the next six to nine months", Prof Kimes added.

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