Articles | HSMAI Global

HSMAI SPECIAL REPORT: Crisis Communications for Hospitality Marketing Professionals

In a crisis situation, business leaders don’t just need information. They need inspiration. They need success stories. That’s what this HSMAI Special Report — presented with the support of HSMAI’s Organizational Member companies — provides. While the coronavirus is still very much a developing situation, hospitality marketing professionals should be focusing on how they are positioning their properties, companies, and brands — not just right now, in the midst of the crisis, but in the aftermath.

To offer some ideas, we’ve turned to winners in the Crisis Communication/Recovery Communications category for Public Relations in HSMAI’s Adrian Awards competition. As the 10 case studies we have developed from these destinations’ and properties’ campaigns show, there is no such thing as a non-recoverable disaster. In the moment, your job is to communicate in a way that prioritizes the safety of your guests, your employees, and your stakeholders. And when it’s over, you let them know that you’re open for business — and better than ever.

Crisis Communication and Marketing Expert Insights

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

Hoteliers find themselves in an unknown environment as the coronavirus continues to spread and the situation evolves, creating a challenge when it comes to communicating with clients, partners, and other stakeholders. Laura Guitar, executive vice president and partner at rbb Communications, and Chris Davidson, executive vice president of insights and strategy at MMGY Global, shared their perspectives and tips for hospitality marketing professionals as part of a program in HSMAI’s Confronting Coronavirus webinar series called “Crisis Communication and Marketing Expert Insights” on March 12. Here are key takeaways from their presentation:

1. We are not overreacting as an industry. This is one of the most common questions that Davidson has been getting. The reality, he said, is that hospitality professionals have no idea how many people are already infected or how many asymptomatic people are walking around. “The reaction is appropriate,” he said. “It’s our responsibility to mitigate the impact.”

But because no one knows what’s going to happen, it’s hard to predict when things will bounce back. “How quickly we come out of this,” Davidson said, “is dependent on how widespread it becomes.”

2. Hotels have a responsibility to provide clear, accurate information. This, Guitar said, is difficult in an age when, despite all the news sources that are available, many people don’t trust the government or media — plus there is so much misinformation out there. Because hospitality marketing professionals aren’t scientists, it’s more important to point clients to the most reliable sources you can find, such as the World Health Organization or the Center for Disease Control, rather than spreading information yourself.

3. It’s important to have a crisis plan. Such a plan shouldn’t cover every single situation in detail, but rather should define the process that will guide decisions being made in high-pressure circumstances, Guitar said. Davidson added that crisis plans should include a chain of command for both getting and disseminating information. It’s also important to create a post-coronavirus toolkit, with plans and programs that can be used to target audiences when the crisis is over.

4. Focus on the business. This crisis is likely going to last at least six to eight weeks before it peaks, Davidson said. Therefore, it’s important not to let the issue absorb everyone’s time and thinking, but rather create a team of people to do that, so that others can focus on keeping the business running. “If you lose sight of the business, you’re going to have to rebuild on the other side,” Davidson said. “This is a marathon, not a sprint.”

5. There are still opportunities to pursue. Both Guitar and Davidson recommended pushing the idea of staycations, where people can feel as if they’re getting away by staying in a hotel in their own town. “The idea is hometown support and rallying around our community,” Guitar said. Davidson also recommended targeting road trippers, who could get to hotels without risking being exposed to the virus in airports.

For island destinations, Guitar said that more people are afraid of getting the virus on a plane than at a resort. She recommended partnering with an airline and promoting all the cleaning and sterilizing that planes are undergoing after every flight. “Planes might actually be the cleanest places in the country right now,” Guitar said.

Watch the entire HSMAI Confronting Coronavirus webinar “Crisis Communication and Marketing Expert Insights” here. For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Resources hub.

Pricing Psychology in Challenging Times

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

As the coronavirus continues to spread, many hoteliers are wondering how to adjust their revenue strategy. Carter Wilson, senior vice president of consulting and analytics at STR, presented data from the 2009–2010 recession to illustrate the implications of dropping prices versus holding steady during low-demand periods as part of a program in HSMAI’s Confronting Coronavirus webinar series called “Pricing Psychology in Challenging Times” on March 10.

1. There are no winners in a price war. STR analyzed daily data from Chicago-area hotels from 2008–2010, which Wilson said was representative of patterns throughout the country at that time. Demand began to fall in September 2008, and after U.S. ADR plummeted more than 10 percent in 2009, no major markets were immune to major revenue loss. “There are no winners here,” Wilson said.

STR wanted to see if it was the case that once one hotel dropped its rate, the rest would follow. They found that on average in a comp set of four, after a first hotel reduced its rate, the second dropped its rate 26 days later, and it only took 130 days for the last hotel in the set to drop rates. The first hotels to slash rates lost more revenue, but the last hotels to do so sustained double the occupancy loss as the first. “It’s a pick-your-poison situation,” Wilson said.

2. Tiers and geography make a difference. Economy and midscale comp sets had a longer time between when the first hotel dropped its prices and the following hotels dropped, suggesting that these hotel tiers don’t follow each other as closely. Upper upscale and luxury hotels had an average of just 100 days between the first hotel dropping and the fourth hotel, which suggests that they are following each other closely.

Another factor was geography: The closer to downtown hotels were, the shorter the timing gap. Hotels in the suburbs had a lower gap than hotels located in the central business district of a city.

3. Holding the line is good for business. Most hotels dropped their rates by at least 10 percent, but there were exceptions, Wilson said. The hotels that tried to hold their rate steady — within 10 percent of normal — did lose occupancy, but they had a less significant RevPAR loss overall. Even though it’s difficult to hold rates steady when competitors drop, properties that didn’t slash rates had less severe profit declines.

4. No two situations are exactly the same. All hotels lost significant RevPAR in 2009 — between 20 and 25 percent — and it took an average of nearly five years to grow back. With the coronavirus, the hospitality industry still doesn’t know what the full impact will be — if it will take a long time to recover, or if it will be similar to outbreaks like Ebola and SARS, where the recovery was brief and rates bounced back within six months.

“Every property behaves differently and has different impact to the bottom line,” Wilson said. “It’s meaningful to learn from the past and create a stress test to prepare for the next downturn and what will happen to your bottom line.”

Watch the entire HSMAI Confronting Coronavirus webinar “Pricing Psychology in Challenging Times” here. For additional information, insights, and tools, visit HSMAI’s Global Coronavirus Resources hub.

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.

Force Majeure and Other Coronavirus Legal Questions

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

The spread of the coronavirus has led to cancellations, travel restrictions, and widespread uncertainty throughout the hospitality and travel industry. To address some of the challenges facing hospitality sales professionals during this crisis event, HSMAI presented a program in its free Confronting Coronavirus webinar series on “Legal Insight on the Pitfalls and Protocols of Hotel Sales Contracts,” featuring leading meetings industry attorney Steven M. Rudner, founder and managing partner at Rudner Law Offices. Here are key takeaways from Rudner’s presentation:

1. The spread of the virus itself does not qualify as a force majeure. According to Rudner, if you have a properly written force majeure clause, the existence of the coronavirus does not allow groups to cancel without penalty, because nothing about the coronavirus makes meetings illegal or impossible. “If we don’t hold the line and combat this fear and say that our hotels are open, so we expect you to be here,” Rudner said, “we will open up a dam we won’t be able to put back into place.”

2. That said, check the specific language in your clause to be sure. Most force majeure clauses contain phrases such as “enumerated events” or “commercially impracticable,” which both mean that it is virtually impossible to continue with an event. However, if the clause leaves it to the booking group’s discretion, or if “impractical” is used instead of “impracticable,” then the group may have a case to qualify under force majeure. Rudner advised against entering into a clause that contains such language.

3. Most cancellations are driven by fear, which doesn’t count as force majeure. A company’s internal decision to suspend travel still doesn’t rise to the level of force majeure. “You don’t get to make your own rules and create a force majeure,” said Rudner, who recalled a case in which a group canceled a booking after 9/11 due to fear of traveling. However, the Arizona Supreme Court ruled that subjective fear doesn’t excuse performance — meaning that the canceling group still had to pay for its cancellation.

4. You can’t evoke force majeure based on a forecast. Nobody knows what’s going to happen a few months from now. The only exception to this is when a clause requires notice within five days of learning of an issue. Because it’s been more than five days since the coronavirus has become a major disruptor, that would not apply in most cases, Rudner said.

5. Be careful with rebooking policies. If you allow groups to rebook, keep in mind that you will have empty hotels for months until everything is rescheduled. Require rebookings to occur within a certain timeframe with the same numbers and same attrition rate. If you allow a group to have a credit from the initial booking, require that they pay for both bookings if the second has to be canceled as well.

6. If you have to make a claim against a group, do it now. Because trials can take a year or more to go to court, a jury or judge may have a different view of a crisis situation and consider the canceling group’s action as permissible as opposed to now, when the group doesn’t have a case. “If you want to do something about a cancellation,” Rudner said, “assert your rights now and start the process of collecting.”

7. All other decisions are business decisions, not legal ones. You can choose to be more lenient with rebooking or attrition rates with one group rather than another, but Rudner cautioned against inadvertently discriminating against racial or ethnic groups. He said that it is appropriate to increase attrition rates if a high percentage of attendees are coming from an area experiencing an outbreak, but not if people are simply afraid to travel in general.

For additional questions about the coronavirus and cancellations, HSMAI members can email Steven M. Rudner at ruder@hotellawyers.com. For more resources, visit HSMAI’s Global Coronavirus Resources hub.

The First Rule of Coronavirus: Don’t Panic

Coronavirus may seem like it’s come out of nowhere, but hospitality revenue optimization professionals have been here before. From Sept. 11 to SARS to one hurricane season after another, they have not just survived plenty of crisis events but thrived in the aftermath.

The number-one thing to keep in mind, according to Timothy Wiersma, founder and principal of Revenue Generation LLC and chair of HSMAI’s Revenue Optimization Advisory Board: Don’t panic. Wiersma shared some additional advice for revenue professionals in a recent interview with HSMAI.

When it comes to responding to the coronavirus, what should hospitality revenue professionals be thinking about?

From a practical standpoint, be sure to pay close attention to the data. Now is not the time to lose control, by any means. This is an opportunity for a revenue strategist to lead by paying close attention to their pace results and other trending data. Examine closely what’s inside the pace results, what type of trends are happening, what segments are canceling, what segments may actually be increasing as a result of shifting priorities, the number of cancellations that you have going on, the number of new bookings, where are the bookings coming from, and where are the cancellations coming from. Additionally, what are you seeing from a pricing perspective? Are you looking at the right competitors and broader market pricing conditions? What about airline cancelations? What about drive market trends? What are your sales leaders telling you?

My recommendation would be, on a daily basis, update the key stakeholders on exactly what’s going on with those trends. As far as pricing is concerned, taking a look at not only your competitive set but what you would also consider your secondary competitors — the greater market — ensuring that you’re watching those trends and then making sure that you’re taking it all into account as you move forward with your strategies.

When you say don’t lose control, in this context, what would losing control look like?

Based on my previous experience, I’ve seen certain hotels, certain competitors, just drop rate. There’s only so much demand that will come into a market regardless of market conditions. By discounting significantly, you may be compounding the impact you have on your asset profitability and you’re not helping generate additional demand into that market. This also makes it very difficult for you to recover. Smith Travel put out a chart the other day showing that during 9/11, it took about 12 months after the event for U.S. ADR to bottom out. From that point, it took 24 months to get back to pre-9/11 ADRs. In other words, about three years to see pre-9/11 ADRs.

There are huge implications behind that. We don’t know how long this particular event is going to last, but if you look at an event like SARS, which occurred around March of 2003, by June of that year they were beginning to lift travel restrictions — and by July the crisis was basically over. They had a vaccine, and any travel restrictions that were in place were completely gone. From that point, occupancy levels normalized about six weeks later.

I’m not saying that’s going to be the case here, but we need to look at the long game on this and say, okay, we have to ride this out. We need to make certain decisions from a pricing standpoint but understand that those decisions have longer-term implications. If there is a recovery in place, it’s going to be more difficult for you to claw back on the ADR side if you drop significantly. If we as an industry can ride this out without dramatically dropping ADR, we will be in a much better place once this is behind us.

Is there a difference in terms of responding on the leisure versus the group side?

Yes, there is. The leisure side comes back much quicker, and there are many things that you can do to attract leisure demand through packaging, working with your CVBs, OTAs, and so on. If you’re a destination, there’s many approaches that you can take from a marketing standpoint to generate that demand and give customers incentives to come your way. On the other hand, from a group perspective, it’s more difficult to coordinate and reschedule a convention or group meeting. There are so many implications behind that. Depending on the type of group it is, you’re going to have a greater lag on recovery.

What else should be on revenue professionals’ radar?

Pay close attention to the external data — not just the traditional stuff that you look at, but also items like airlift. How are airlines reducing the flights coming into your particular market? Which markets are they taking away completely? That will allow you to refocus your marketing efforts into feeder markets that still come into your market.

The important thing is being as transparent as possible, trying to stay ahead of the game. The worst thing that can happen is that you continue to have internal surprises. So, not painting too rosy a picture, but just being realistic as to what’s happening with your booking pace trends, your cancellations, and expectations for the future.

Sign up for HSMAI’s free webinar Confronting Coronavirus: Pricing Psychology in Challenging Times.

For more resources, visit HSMAI’s Global Coronavirus Resources hub.

Marketing in the Age of Coronavirus

Marketing never stops. Even when a crisis event like coronavirus seems to be consuming everyone’s attention, you still have to get your message out — but do so in a sensitive, thoughtful way. How? Brian Hall, chief marketing officer of Explore St. Louis and a member of the HSMAI Americas Board of Directors, recently offered some insights.

What are the immediate priorities for hospitality marketing professionals in this climate?

The most immediate priority for hospitality marketers in times of uncertainly is to communicate facts and do so routinely and liberally. As concerns have heightened over the past week, many organizations are issuing daily updates as travelers are seeking facts and perspective amidst swirling and sometimes sensational news accounts.

Second, it is important to refer to and cite leading authorities such as, in the case of CONVID-19, the CDC, WHO, and local public health agencies to allow your guests to make informed decisions. Lastly, marketers should never minimize the consequences associated with an event and always demonstrate empathy to those who have been impacted.

How does a company balance prioritizing its customers’ safety and protecting its brand?

Travel brands always put guest safety first, which ensures their reputations will be well-protected, earning the trust, respect, and loyalty of their customers. Those brands who put other motives ahead of the safety and security of their guests do so at their peril.

Should marketers already be thinking about their post-coronavirus planning?

For those destinations and industries directly impacted with cases and possible outbreaks, post-CONVID-19 marketing planning and activity will be imperative to attract customers back. I recall in the aftermath of 9/11 that several hotel brands responded with marketing campaigns inviting travelers back to New York to show their support for the city and its tourism community. Once again, the tone and timing for these campaigns is paramount. As the virus will have resulted in substantial illness and loss of life around the world, marketers should avoid celebrating victory prematurely and communicate in a respectful, reflective fashion.

Sign up for HSMAI’s free webinar, Confronting Coronavirus: Crisis Communication and Marketing Expert Insights. For more resources, visit HSMAI’s Global Coronavirus Resources hub.

Revenue Career Paths: Sabre’s Scott Pusillo, CRME

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

Scott Pusillo loves travel, whether it’s seeking out adventures in his personal life, holding business meetings in new locales, or developing new technology to make the industry more efficient. And while Pusillo’s career has taken several twists and turns, his love for travel has never wavered.

After working in the field for several years and teaching himself all he could about what was then the new discipline of revenue management, Pusillo obtained HSMAI’s Certified Revenue Management Executive (CRME) credential to supplement his previous learning and take his career to the next level. Now the vice president of business development for North America for Sabre Hospitality Solutions, Pusillo recently shared his professional story with HSMAI — and a snapshot of what makes him tick outside of work.

What has your career path looked like?

I’ve been in the industry for 20 years, having earned degrees from Johnson & Wales University in culinary arts and in management. Originally, I started in hotel operations and early on found my passion for revenue management. I moved through positions in revenue management at hotels and at a corporate level, eventually leading global market strategy for Viceroy Hotel Group before making a leap into the travel technology space three years ago. I now lead business development and account management teams across North America at Sabre Hospitality Solutions.

Why did you get the CRME?

I pursued my CRME about 12 years ago, when I was early in my career and wanted to be relevant and have the credentials to back up my knowledge. When I started in this discipline, revenue management was not something that was talked about or taught in university. I didn’t know it would be something I’d be good at until a very astute general manager recognized my strengths and suggested I take the role.

Having formal training and certification helped a lot in the early days, and I get to keep my knowledge relevant and stay up-to-date on industry trends by recertifying every three years. Practical applications of these skills have changed over the years, so having “CRME” is more than just bragging rights, it helps to really further your growth and further your relevance when you speak to the ideas and concepts you’re bringing to the table.

What keeps you interested in revenue every day?

I’m passionate about the changing trends in travel in general. At Sabre, we power more than 40,000 hotels around the world, and I get to help redefine what the future of travel looks like. I’ve been passionate about this evolution for a long time — how hoteliers need to move away from just thinking about hotel rooms as a source of revenue. I believe our industry’s future is grounded in the concepts of retailing, distribution, and fulfillment, particularly in meeting the complex requirements today’s travelers have when deciding where to stay during their journeys. There are infinite possibilities out there, and I love that I work for an organization that is leading the charge into the future.

What has been the biggest setback in your career and what did you learn from it?

In the early days of my career, not having formal training available to me, not even really having standardized curriculums across the industry, led to a lot of self-teaching and self-discovery of strategies. When you develop it on your own, you don’t know what you don’t know, and you’re developing these theories and strategies in a vacuum. Self-learning is fantastic, but there were a lot of speedbumps along the way. Failing isn’t a bad thing, but the lack of defined trainings had the potential to stunt my growth. I learned perseverance and determination from those speedbumps and failures.

As HSMAI rolled out CRME and as they have enhanced and refined the study guide through the years, it has really helped catapult the discipline into a more structured and advanced stage. HSMAI helped me overcome that as I became more involved in the organization and we became more focused on honing the skills of revenue management as an industry.

What’s been the best or most exciting thing you’ve gotten a chance to do in your career?

Making the switch out of hospitality to technology was really exciting for me. It was probably the biggest risk I’ve ever taken in my career but has also been the most rewarding. I’ve loved being able to take the skills around revenue management and hotel operations and carry that experience into the travel technology space. In this role, I’ve been able to influence a lot of the focus for the next generation of systems focused on hotel distribution and strategy.

Specifically, I’m most excited about the ability to lend insights and thought leadership around the idea of optimizing every source of revenue available to hoteliers. For so long we’ve been so focused on selling just rooms, but the true opportunity comes with selling everything around it. There is endless untapped potential when you start thinking about attribute-based selling, decoupling package elements, time-based pricing strategies, or monetizing amenities, policies, and ancillaries. When you take away the guest room as the center of the purchase and look to what inspires travelers to consider a destination or hotel in the first place, you really get at the heart of the future of hotel revenue management. It’s exciting to know that a little bit of my DNA will be in the theory and application of technology systems that will power that enablement.

Outside of work, where would we find you?

My passion is travel, which is why I’ve been so lucky to have been able to marry my passion with my career. You’d find me on a plane exploring new destinations by myself; I enjoy the personal and cultural discoveries that come with traveling solo. My most recent exploration was back to Taiwan to spend a week there with friends I met on a previous solo visit and explore more of that beautiful country.

What would your coworkers be surprised to learn about you?

I think they would be surprised to learn that outside of work I am far more fun-loving and easygoing. I come into my job with a focused and driven attitude and it’s all business in my professional life, but when I go home, I’m far more relaxed, go with the flow, and whimsical.

What Effect Will the Coronavirus Have on the Hospitality Industry?

By Katie Davin, CHSE, Associate Professor at Johnson & Wales University – Providence, and member of HSMAI’s Sales Advisory Board

According to the World Health Organization as of Feb. 27, there are more than 81,000 cases of coronavirus worldwide, with nearly 900 being confirmed in the previous 24 hours. Close to 3,000 people have died from the virus, which originated in China’s Wuhan Province in December.

The impacts have been felt worldwide, with travel bans enacted and some businesses shutting down as the virus has progressed to 37 countries, with the largest number of cases in China, South Korea, Italy, Japan, and Iran. The United States has reported 53 cases.

HSMAI’s Sales Advisory Board (SAB) discussed the impact that the coronavirus has had on their properties as well as their predictions for the entire hospitality industry on a call on Feb 12. While the virus has continued to spread, its effects changing and multiplying since then, SAB members offered a valuable take on what hoteliers can do to prepare for potential impacts:

1. Uncertainty is the name of the game: The one thing that everyone seemed to agree on is that nobody really knows what is going to happen. Everyone on the SAB call has had a different experience and heard different opinions on how long the virus is projected to be a disturbance. One member said that while they heard that the SARS virus could be a predictor of the coronavirus, the spread of the two has been very different. Another member said: “What I’ve learned is that nobody really knows.”

2. The view from Europe: One SAB member recently travelled to Europe, where as of Feb. 27 the coronavirus has been in Austria, Belgium, Croatia, Finland, France, Germany, Greece, North Macedonia, Russia, Spain, Sweden, Switzerland, the United Kingdom, and — most notably — Italy. “I saw half-empty airplanes, completely empty department stores, and visibly less activity,” the member said. “Parts of the world are still strong, but some parts of the world we have closed hotels. It’s a daily moving target, but I was pretty stunned just going back and forth to Europe last week that I saw such dramatic declines.”

“We’re seeing and hearing business meetings all over the world being cancelled,” another member said. “It has some very big, very serious impacts.”

3. Cancellations and more: In the United States and abroad, hoteliers have been feeling those impacts. One SAB member who has hotels in Alaska and on the West Coast has seen an uptake in cancellations from guests as well as from airline crews who would be coming from other countries. Another member said they had their West Coast hotels look at upcoming group bookings and flag groups with a high number of travelers out of China, which may be likely to cancel, in order to adjust their forecasts accordingly.

Several SAB members said they were surprised they haven’t seen as many cancellations as expected thus far. “But we’re keeping a very close watch,” a member said.

Beyond direct cancellations from people affected by the coronavirus, the outbreak could have chain impacts down the line. “There are lots of salespeople in many industries out on the road trying to sell goods and services, many of which originate from China,” one SAB member said. “If those salespeople don’t have inventory to sell, that could be an interesting impact on business travel.”

4. Finding other business: Another member recommended finding U.S.-based business that is less likely to be disrupted. “Now is the time to emphasize those relationships and be prepared to transition as the situation changes in China,” they said. “Find those businesses, even if it’s U.S. government business, that can carry you in the short term.”

To minimize the spread of the virus, the WHO recommends washing hands frequently, maintaining space from anyone who is coughing or sneezing, avoid touching your eyes, nose, and mouth, and seeking medical care early if you have a fever, cough, and difficulty breathing.

Visit the HSMAI Global Coronavirus Resources area for additional insights

Curate Update: Leadership Lessons From Coronavirus and Cannabis

By Christopher Durso, Vice President of Content Development, Hospitality Sales & Marketing Association International (HSMAI)

The theme of our upcoming Curate event at The Broadmoor on March 23–24 is “Leadership in Changing Times” — which right now means the developing situation around coronavirus. We’ll be incorporating a session on crisis leadership within the context of the epidemic into our program and will share more details when we have them.

Meanwhile, few places have seen such changing times as our host destination of Colorado, where the legalization of marijuana in 2014 has created business challenges and opportunities in equal measure. Helping unroll them for Curate attendees will be speaker Shanita Perry, founder and CEO of Budding Solutions, a cannabis consulting firm, who previously did technology and management consulting work for Fortune 500 companies. “I saw the opportunity to transition to the cannabis industry,” Perry said in a recent interview, “by bringing a much-needed skillset and professional services to the space.”

When did cannabis first hit your radar as a legitimate business opportunity?

In 2013, I was working on a supply-chain project for a large company. We were consolidating their service centers throughout the country, and I saw things happening in California as it related to the cannabis industry, but when I got there and I saw the opportunities that were available, it wasn’t a good fit. The industry wasn’t sophisticated enough. The opportunities weren’t aligned with real growth.

I went back for two years and worked more on corporate projects until, in 2015, Maryland opened up their process for licensing cannabis businesses. That’s when I just jumped in both feet first and haven’t looked back since.

What is it about this sector that attracted you?

Not only did it present a business opportunity, it presented the opportunity to do something amazing in terms of bringing this medicine to people. The economic opportunity is there, but we have a chance to right the wrong — the ill-intentioned war on drugs, where people were jailed for this plant, and black and brown people disproportionately. For the first time in my life, I saw an opportunity to work hard toward something that would not just be about making money, but would truly have an impact on people’s health and wellness, their freedom and liberties, as well as the opportunity to take advantage of the economic benefits of this amazing industry.

This is an industry that isn’t just young, but until 10 years ago was strictly underground if not illegal. What type of leadership does an industry like that need?

We’re seeing a different leader emerge in Colorado and in the country as it relates to these companies. We just saw one of the former CEOs of Overstock.com take over High Times. You’re seeing businesses shift with the times. Old leadership was stuck in their ways — this was a commodity that didn’t need marketing, it sold itself, and because it was underground you didn’t do a lot of the planning that you do for any other business.

Now we’re starting to see folks that have led Fortune 500 companies come into this space because the various transitions that other industries have had to go through over time are all things that we’re facing in this industry very quickly. You’re seeing people come from consumer-product goods, you’re seeing people come from the tech space, you’re seeing people come from pharmaceutical companies. We’re starting to see folks who understand that what they’ve done in other industries is transferable and much needed.

What are some opportunities for the hospitality industry in this space?

With Colorado being the oldest market, one thing that they didn’t do — and because they didn’t do it, other states didn’t do it, because they were looking at Colorado as the model — is consider social consumption, which is where people would actually consume the product. But because it was legal, you had an influx of tourists who were now buying the product. You also had a very established tourist economy, and there was no thought given to protecting people from illegally consuming, which then messes up their entire vacation and they’re left with having to deal with at least a fine if not a court appearance. It really takes away from the opportunities to allow people to come to Colorado and enjoy it and for other industries like hospitality to take advantage of that.

The hospitality industry has a huge opportunity to come in and provide a solution to an issue that plagues most legal markets, which is where people can consume. We’ve seen the Airbnb “420 friendly” model, where it’s not only allowed to consume but they’re actually curating the stay and the home is full of all of the smoking accessories. In some instances, there may even be partnerships with a dispensary to provide cannabis in this space. So, the hospitality industry has a huge opportunity in that way.

I know there’s the issue of smoking in general. We’re seeing hotels now go from just a no-smoking sign to [a sign with] a marijuana leaf with the cross through it. The hospitality industry has already started to adjust for cannabis legalization, but it’s been in a way that consumers really feel like, “Hey, you’re going to charge me a fee if I smoke here. I can’t smoke on the street. This wasn’t such a good idea to come here.” So there’s an opportunity to fill that gap — to not infringe upon the other guests but to carve out a niche where it is 420-friendly without imposing on others and without sacrificing any of the things that someone would want. What we’ve seen in the way of social consumption spaces has been a dank, dingy, basement-type vibe, but there’s an opportunity to have a more luxurious experience aligned with cannabis.

Curate is an exclusive benefit for HSMAI Organizational Member companies. To attend Spring Curate 2020 at The Broadmoor on March 23–24 or to learn about attending a future Curate event, talk to the primary contact for your company’s Organizational Membership or contact Stacy Gleason, HSMAI’s director of membership.