Learning From Past Crises

By Kaitlin Dunn, Writer, Hospitality Sales & Marketing Association International (HSMAI)

The World Health Organization officially declared COVID-19, also known as the coronavirus, a pandemic on Wednesday, March 11. While the coronavirus has been a huge disrupter not only in the hospitality industry but in every sector around the world, it’s not unique. Hospitality professionals have weathered numerous other crises, from outbreaks to natural disasters — each one offering its own lessons.

D.C. Becker, principal and co-owner at Titan Group of New York, has been through two recent crises. While he was with Interstate Hotels & Resorts, he was in Shanghai in 2011 after a deadly tsunami hit neighboring Japan, sending shockwaves through Asia, and he managed several hotels in Florida in 2015 when the Zika virus epidemic caused mass cancellations. Becker recently sat down with HSMAI to discuss these experiences, including how they relate to the ongoing crisis created by the coronavirus.

What did you learn from your experiences in Shanghai and Miami?

When I was in China, [Interstate was] new as an American company in Asia, and we learned of the importance of relationships. It wasn’t about contracts we were going to lose, it was about the sensitivity to the fact that people’s lives were disrupted and we needed to be thoughtful about that. That’s a common denominator with all of this. There’s the legal, contractual side, and then there’s the human side. The human side and having that sensitivity is so important to our business.

In Florida it was different, because it was more black-and-white, even more so than with the coronavirus. The CDC told people absolutely to not travel to Florida. Now [with the coronavirus] people are taking a chance, it’s a personal call. With Zika, this allowed certain insurances to kick in that protected people who couldn’t travel. We knew that we had a degree of business protection because of that, but just like in Asia, we needed to be able to demonstrate sensitivity to our customers. There’s still a tremendous amount of angst on the part of clients who put a tremendous amount of time and money into planning and they know they have to cancel it.

What’s the most important thing for hospitality professionals to keep in mind today?

The biggest piece of all of this is sympathy for people trying to do their jobs and having to cancel their events. The business operators have to separate between contractual and moral obligations, but we have the ability to influence the way we go about this. Today our hotels are speaking with customers about canceling business, and we are as much as possible going by the contract but injecting a dose of sensitivity into it to be understanding and realistic.

People that know me know it’s not surprising that I would talk about doing everything for the customer, within reason. I really believe that is what needs to be happening here. All of us need to understand our businesses obligations and adjust as much as possible to the customer’s point of view to land somewhere in the middle. Everybody loses, but we want to minimize the loss on both sides, so when things are back to normal, people are comfortable with the people they did business with before and nobody has a bad taste because of the way someone behaved.

It’s important to keep in mind that this is a marathon, not a sprint, and these same people who are customers, that we are unsympathetic to, they have very long memories. If you are empathetic or sympathetic because you’re a decent person or because it’s good business strategy, the better the outcome all around. If we go after them and get paid every cent from the contract, somewhere down the road they are going to remember how we treated them and reconsider their relationship with us.

How did hotels readjust their sales plans or ways of selling during the previous crises?

One of the things some people did then and are doing now is taking inquiries on a case-by-case basis. There has to be some additional considerations when it comes to contractual obligations with new business. No one is putting new business on the books right now until it settles a bit. For those that are dealing with new business, its being sympathetic and looking at expanding cutoff dates and making it more customer friendly.

A lot of us in this business understand, there’s no such thing as black-and-white. To survive requires immense flexibility. We have to protect our owners and brand and business, but we need to protect it for today, tomorrow, and next year. The process of getting there is not always the same with each customer. My advice is to look at each instance by itself. We need to understand the contract — what we are entitled to — and look at what the customer wants and needs, and know that it’s never going to be as straightforward as just looking at the document.

How have you seen hotels react to the coronavirus thus far?

I have not seen a lot of strict enforcing of contracts, so when I have heard about that, it surprised me. The hotels that I have been dealing with, they are doing the right thing, which is looking at the customers individually, because there is no one-size-fits-all when you’re dealing with an epidemic. I feel very good, because what I’m seeing is things being done the right way, with sensitivity.

We don’t know what we’re dealing with here. Zika was very regionalized and we came out of it fairly quickly. The conversations happening now are around understanding where the bottom is going to be before we can understand how quickly we can come back. It sounds like China is starting to level off and stabilize, so the hope is that the same timeline will apply, but we really don’t know.

Categories: Sales
Insight Type: Articles