Arguably those impacted the most by COVID-19 were businesses that heavily relied on a physical influx of customers, such as hotels, restaurants and bars. Data from McKinsey suggests that the hotel industry’s path to recovery to pre-COVID-19 levels could take until 2023, or even later. With Australia’s border lockdowns being stricter than most, our hotels had it particularly tough.
Despite the overriding assumptions, the hotel industry was not a complete casualty. In fact, if we dig a little deeper, we can find many examples of resilience and survival. We think there are several key learnings that can be applied to other small businesses that have perhaps seen their usual modus operandi turned upside down by recent events
Focus on the customers you can serve
In the case of hotels, they lost their main source of revenue: guests. However, by being smart and re-evaluating their business models, many were able to offer value in other ways. For some, this included expanding their kitchen offering, or putting on events or entertainment solely with local communities in mind. Remember, hotels are often in prime locations, making them accessible and perfect for hosting events.
For example, King Island Hotel, which sits on its namesake, between mainland Australia and Tasmania saw its room occupancy rates drop from 80 per cent to 10 per cent last year. In response, King Island Hotel shifted its focus away from non-existent tourists to the 1200+ population of its island and instead catered to those it could help and provide value to.
In other words, focus on those you can serve, rather than worrying too much about those you can’t. Don’t let what’s not possible at the moment distract you from the current opportunity in front of you.
Double down on what you do well
Following on from the previous tip and once again taking King Island Hotel as an example, we can see how doubling down on what you do well (and what you still can do despite limitations) is a great way to keep a business humming. King Island Hotel, focused on its restaurant offering. By extending the restaurant’s opening hours, the hotel went from preparing 40 meals a day to 150. Putting this into context, amazingly the hotel was feeding 10 per cent of the island’s population every day.
The lesson here for other small businesses is to identify and map all the separate services and ways you can provide value and then see how you can build or expand upon them. You never know where your future drivers of revenue might come from.
Don’t stop investing (where you can)
When times are tough, cutbacks are understandable and sometimes necessary. However, where possible businesses should always set capital aside for long-term investments that will provide lasting benefits to the core business.
As an investment, technology does tend to deliver good returns. The right tech can speed things up, simplify processes and create better customer experiences. For example, on average, 40 per cent of businesses state that the top reason for investing in cloud technology is to improve business resilience and agility – key business qualities during uncertain times. For small businesses, investing in technology can save money in the long run.
We understand that all businesses were impacted in different ways during the pandemic and what works for one may not work for all. However, hotels were perhaps some of the worst affected businesses and if they, despite serious challenges, were able to pivot and find success – we believe there’s a lot that can be learned from them…and, hopefully, applied!