How do you think consumer behavior will change, post-Covid? Maybe split it up between leisure travelers and business travelers. How are you looking at that, today?

{audio:0:08:27} That’s a very good question because, before, we were expecting the behavior of the customers to be really focusing on the service and on the quality of the service and the brand name. Now they will be focusing a lot on health and safety, despite the fact that they know that the brand they were travelling to before, is very strong in making the hotel safe for them. I think they will be looking, first, at the new procedures that the hotel is putting in place and that’s where we communicate a lot with the customers. We remain in contact with them, even though the hotels are closed now, and make sure that, when we reopen, they are fully aware about what we are going to put in place, in terms of procedures for cleanliness of the rooms, for example, or at the check-in.

{audio:0:09:20} In terms of type of customers, with the business customers, there is not much interaction with them, when they come to the hotel. Most of them they arrive, they leave early in the morning, they go out doing business, for the whole day and they come back in the evening. I’m sure that, first of all, we will have the leisure customers coming to the hotel, because of the whole lockdown and people would like to travel again. They would like to come out from this lockdown and just enjoy life, outside of their homes. They are where we need to make sure we answer all their questions, in terms of health and safety, by the procedures that we will put in place, then just continuing business as it was before. Making sure that we anticipate their needs and that we make them feel comfortable at the hotel.

{audio:0:10:13} Do you see larger declines in, potentially, business travel, versus leisure? I assume, then, conference and events in the hotels will be the hardest hit?

{audio:0:10:27} Yes; that will definitely be ramp-up time, after we open the hotels. First of all, we will definitely have a lot of locals and we will focus on the local business, because planes are not yet flying. The borders in Europe are closed to Schengen. The United States doesn’t want their citizens to travel abroad. So first of all, we will have local customers. Also, with all the technology that is now available, a lot of people are doing what we are doing now. I didn’t travel to London; you didn’t travel to Paris, to meet and talk. I think a lot of companies, because they were also hit financially, they will review their travel plans. They will probably ask some of their business people to not travel, where before they were travelling. You have a two-hour meeting; don’t travel. Just do it by Skype or by Zoom. Then they reduce the costs and it will be as efficient as it was, face to face. We have now put everything in place to make it successful. It’s a new way to do it.

{audio:0:11:35} Do you think that it’s a permanently smaller market then, the business travel market?

{audio:0:11:44} During the year, you can see, in the main cities in Europe, how the market is. You can see that, in the summertime, it’s mainly leisure travel. The rest of the year, especially end of September, October, November, and then January, February, March, it’s more for business travel. That’s where we are going to see reduced travelers. I think, on the business side, we will see reduced travelers. On the leisure side, I think we will have more and more people travelling.

{audio:0:12:23} So most of the demand for business comes in Q3, Q4?

{audio:0:12:27} Usually, yes. It’s Q3, Q4 where most of the business is. Usually, Q1 is very slow, historically speaking, in hospitality. We will see, probably this year, Q3, Q4 slower in that type of business.

{audio:0:12:50} How can you, as hoteliers, encourage the traveler to stay in hotels? What are you doing, to make the hotel seem safer, be cleaner and really encourage both leisure and business travelers, to stay in your hotel?

{audio:0:13:13} I think the first point is really the brand name and the brand is very strong. All the travelers that used to travel to the brand before, they believe in the brand, so they trust the brand and this is the very important point; the trust between the traveler and the hotels. That will be very key, for the success of opening the hotels and having the traveler coming back to us.

{audio:0:13:40} The second point is the strong procedures that will be in place. We have proved in the past, for example, if you see in Paris, in September 2015, what happened with the attack. Travel stopped a little bit but then when they saw that the hotel has put all the security measures in place, they started travelling again and coming back to the hotel. I think it will be the same approach, making sure that the travelers are aware of what we are putting in place, to make sure that our employees, our assets but, most importantly, the customers, are safe in the hotel. Also adapting the food and beverages that are offered to them, and not making them feel, okay, I’m going to go to the hotel, but I cannot go to the restaurant because it’s going to be crowded and there is no distancing. No, you can come because we have put everything in place, to make you feel comfortable and safe. That’s where we are going to be able to attract the traveler again.

{audio:0:14:47} How did you see demand change, post the Paris attacks?

{audio:0:14:54} Post the Paris attacks, demand was very slow, immediately after. Particularly as it happened in September, and it was at the end of the year, with all the holidays and we only started seeing a bit of ramp up in Q2, 2016. People started travelling, because business travelers had to travel, at that time, for meetings and business. The demand started with the business traveler, first. Then in the summertime, we saw an increase in the leisure business.

{audio:0:15:32} So from Q3, to the summer next year; almost half a year, nine months, for leisure travel to bounce back. But business travel was what ignited the Paris demand, post the attacks. That’s a bit of a different situation from today, because we have Zoom, for example, which wasn’t prevalent back then?

{audio:0:15:54} Exactly. Now we have Zoom, we have all the different platforms that we can use. As I was saying before, I think the business traveler will not start travelling again until Q4 or Q1 next year. That’s what I foresee, for now. The leisure traveler will start travelling again, especially the locals. But the business traveler probably won’t be until the end of Q1, next year.

{audio:0:16:27} Could you elaborate more on how you cultivated trust, post the Paris attacks. What did you do with security, to really tell the travelers, look, come and trust our brand; you’re safe here?

{audio:0:16:40} First of all, by really staying close to the customers, even if they are not travelling to the hotel. People who are on board on the loyalty programs, they receive newsletters and they are informed. Just last week, there was a press release, sharing with everyone what we are doing, in the company, for procedures and for cleaning. That makes the customers feel more secure, knowing exactly what the company is putting in place.

{audio:0:17:16} In terms of the security measures you put in place in Paris, how much did that cost? What was the real change in running the hotel, after Paris, compared to what you expect today?

{audio:0:17:28} We had to keep it very transparent, because we didn’t want to scare the customers, when they came to the hotel. The security was increased and, of course, there was an increase in the cost, because you need more people. In some hotels, you had metal detectors and that was an extra cost. But it was very well-received by the guests. They sometimes even thanked the employee. Thank you very much for doing this, because I can come to your hotel and I feel very safe and I can have lunch, dinner or even stay, because you are putting all this in place. There was a cost but it was worth it, because it keeps your employees safe, it keeps your guests safe and that was the most important thing.

{audio:0:18:21} How do you think prices will change, to ignite demand, coming out of this period?

{audio:0:18:29} That’s actually coming from market intelligence right now, to try and see exactly what’s going to happen after Covid-19. The prices will need to be realistic and there should not be a war between each brand or each hotel, dropping rates. The company or the hotel that drops their price too much, you need to think, within a year or two, how are you going to ramp up your rate to the rate you had before Covid-19? In general, in revenue management, if you drop your rate too much, you’re going to suffer later, by bringing it back up. So we need to be realistic also, about the service we are going to be providing. We are going to be providing the same service, so we need to also be aligned in terms of pricing.

{audio:0:19:14} Just browsing Booking or Expedia, I’ve seen some prices and I don’t think the rates have dropped that much, right now. I guess because occupancy is so low that I don’t think the change in price is going to matter at this point. Coming out of that, maybe in Q3, Q4, and even next year, do you still feel there is a requirement for branded hotels, and also independent hotels, to really drop that average daily rate, to ignite demand?

{audio:0:19:44} I think we should adjust the rate to the demand. As you mentioned, if we don’t have demand, you can drop the price to whatever you want, but no one is coming. We need to see how Q3 and Q4 go and then we will have a strategy for 2021. But we need to be realistic and we also need to be aligned to the market.

{audio:0:20:13} How did you change prices, post the Paris attacks?

{audio:0:20:19} It was the same strategy, actually. Just making sure that demand is there and adjusting the price to the market. There were a lot of hotels that dropped their prices or you book a room and you get an upgrade to a suite. That’s what we usually do. If the suites are available, I’m not going to keep it empty; I’m just going to keep you happy and give you the suite. We will have the same strategy.

{audio:0:20:42} Let’s just hypothesize for a moment. Let’s say that Q3, Q4, we see much less business demand than we expected. That puts the hotels in a tricky position, where they rely on that business demand, in certain parts of the year, to meet occupancy and meet certain revenue profitability targets. Would you then adjust the leisure rates or leisure offer, to balance that out? How are you looking at balancing the two sets of demand and the hotel occupancy?

{audio:0:21:17} Usually, there are also promotions that help the customers to enjoy more time. You book two nights and you have the third night free and that’s a regular package that we do. It’s more on giving the service and providing more service to the guests, rather than just dropping the rates. As I mentioned before, we need to think ahead, not just for right now or for six months. But think how we are going to ramp up the rates in 2021. The rates should not be very aggressive and very low, because the service is there. When you pay the hotel price, you are paying for the service. The associates are there, their enthusiasm is the same and they are here for servicing the guests.

{audio:0:22:05} When do you think we will see similar ADRs to 2019, or even 2018, going forward?

{audio:0:22:13} Personal guess, by experience in hospitality, would say not before the end of 2021, early 2022.

{audio:0:22:27} That’s quite a bounce back though. Arguably, you could say there was a peak ADR or peak occupancy, especially in the US, sometimes in Europe, in 2019. You think we’re going to bounce back, pretty quickly, in 2021, if not 2022?

{audio:0:22:47} We’ll see the reaction of the customers, right after we open up the hotels and I’m sure they will be happy to travel again and to come to our hotels. With that, we will see a slow ramp up, through 2021. Therefore, we should be at cruising speed in 2022. Similar to what happened in 2015; 2016 was really a ramp-up year and then we started really seeing the previous rates, in 2017.

{audio:0:23:22} Talk to me about the operational changes you are making in the hotel and in the rooms, as you said, around cleanliness and driving the trust for the customer.

{audio:0:23:34} In terms of the room itself, physically, nothing will change. It’s all in the processes. One of the first processes that will be impacted on is the cleaning and housekeeping process. There will be some products and some machines used, to make sure that the room is really clean, before the new guests arrives.

{audio:0:24:04} Is that much of an operational challenge for you? Does that take much longer than expected?

{audio:0:24:12} It will involve being in the rooms a couple of minutes more, because we will be using other products and we will be maybe swiping twice, what we used to do once. That’s taken into consideration for the reopening of the hotels and that’s something that will be the new norm.

{audio:0:24:33} Do you think that has an impact on reducing the breakeven occupancy rate, for example, for a hotel?

{audio:0:24:41} No; I don’t think that it will have an impact on the breakeven rate. The cost will increase a little bit and that’s because we will be spending a little bit more time in cleaning the rooms. Therefore, instead of having one room attendant cleaning 12 rooms, maybe she will only be cleaning 10 rooms, so we will need more staff, more hands. This should not be affecting the breakeven rate.

{audio:0:25:10} So it’s not a major change, in terms of the cleanliness requirements. Clearly, there is going to be more hand sanitizer around the hotel or, like you said, maybe shorter turnaround times, but it’s not going to have a material impact on the economics of the hotel, in turning around rooms?

{audio:0:25:28} If you had a specific cleaning procedure, even before Covid-19, you are safe and you are sure about what you are cleaning and what you are doing for the next guest. Right now, as far as I’ve seen from the different government procedures that are coming out, they’re mainly on products but also on precautions for the guests. Washing their hands, using gloves, using masks. That’s, basically, what we’re going to be changing; the behavior of everyone.

{audio:0:26:06} Will it be mandatory to wear masks in the hotel?

{audio:0:26:15} In France, it’s recommended, but it’s not mandatory. We’ll see, in other countries, how they will react. Yes, in public transportation, they are saying that it will be mandatory. For most of the cases, they are saying it’s up to the person as to whether they wear a mask or not. We will definitely adjust to the local regulations.

{audio:0:26:38} What is the biggest challenge you are facing today, in operationally managing hotels through the crisis?

{audio:0:26:49} It’s to reopen them. We are looking forward to reopening the hotels. The challenge is really to keep the team motivated, to keep them on board. Also, really getting the information from the local governments on when we will be able to open. That’s the main challenge, operationally, because we are ready. We can reopen the hotels tomorrow; the team is looking forward to it and they are following what’s happening right now and we are in contact, on a daily basis. So they are being updated and they are looking forward to the guidelines being out and also the regulations from the government and the dates for reopening.

{audio:0:27:38} So you’re ready to go? It doesn’t take very long to open the hotels? You’re all ready to open them?

{audio:0:27:44} It doesn’t take long. We have professionals and we trust our team. That’s why they are with us. We know them and we’ve been working together for many years and we know they are looking forward to opening the hotel and are ready for it.

{audio:0:28:02} What about the impact on food and beverage operations, in hotels, post-Covid?

{audio:0:28:10} That will be, I think, a new way of operating the restaurants and food and beverage. First of all, because there is the distancing so, of course, there will be less occupancy of the restaurants, less seats in the restaurants. But also, in terms of hygiene. If you already have good procedures for hygiene, in food and beverage, then you won’t worry. You will just put the new procedures in place and you can carry on. Digitalization will be the key, I think. We won’t be handing out menus like we did before. Now there is so much technology that we can use it for that. There will be training for the team, just to ensure they are comfortable and making sure that they are aware of all the new procedures for food and beverage, for distancing, for payment, which will also change. Maybe cash will no longer be used. There are countries, such as Sweden, where cash is no longer used and you only pay with cards. There are now the contactless cards, so that will also help.

{audio:0:29:28} Also serving the food, as well, I assume?

{audio:0:29:31} Yes; serving the food. In the meantime, as I mentioned before, there are precautions and behavior changes that should be taken before. As much as the customer behavior should change, by washing their hands and keeping their distance, the staff will also be doing the same and have all the tools to be able to do so.

{audio:0:29:54} You think that we are going to have a reduced occupancy or covers in the restaurant, in hotels, to maintain that social distancing?

{audio:0:30:05} Yes; and as far as I can hear, when I talk to my colleagues from the food and beverage industry, across Europe, that will be the case, because of the distancing approach that we have to put in place in the restaurants. Independent restaurants are thinking about having glass between seats. Would that be feasible? All the options are open and, of course, we talk a lot about our solutions to not decrease the number of seats. But for now, to deal with the distancing, yes.

{audio:0:30:47} How are you thinking about making up that shortfall in revenue, from the reduction in covers?

{audio:0:30:56} I think the takeaway options could be very good. Many hotels are already doing takeaway now, with the restaurants closed. Takeaway or delivery options will be a good portion, especially for the locals. For the hotel guests, they can also have room service and, therefore, that’s the portion that could cover the missing revenue.

{audio:0:31:26} How do you think independent hotels will react, coming out of this crisis, in terms of being associated with larger chains or that brand that you mentioned earlier?

{audio:0:31:41} Individual hotels, I think, will be going, as with the other big companies, through a very tough time, right now. When they reopen, it will be mandatory to put in the place the new hygiene procedures. The best approach is really to have trust in the team, to really have a strong team and to have a good plan in place, in terms of marketing and broadcasting the hotels, to get the traveler coming to the hotel. If the hotel is closed now, the best thing is to keep in contact with customers because, beyond the business between the customer and the hotel, there is also a bond there, that you need to keep alive. That’s the key, I think, for tomorrow.

{audio:0:32:45} We’ve discussed loyalty a lot, and having trust with the customer, keeping in contact with the customer. How loyal are the leisure travelers, to big branded hotels, versus business travelers?

{audio:0:33:04} We see a trend in regular travelers where they have the same travel plan, every year, in the summer, for example. Yes, they do have their routine and their habits in each hotel and they are very happy to come back to the same hotel. The strength in the brand is that you go to one hotel in one city and when you go to another one, you don’t have to repeat what you like, what you dislike. That’s something very important, to bring back the leisure business. In the same city or in a different city, but with the same brand, that is what is important; keep the customers visiting the same brand, across the world, by making them feel welcome back to the hotel. But also, knowing them, knowing their preferences and knowing how to exceed their expectations.

{audio:0:34:05} Is the frequency of the business traveler much higher than the leisure loyalty member, for example?

{audio:0:34:16} I don’t have the data with me, but I would say – I don’t want to give you incorrect information – but basically, the business travelers are usually more loyal, in any loyalty program, such as an airline program, a hotel program. Sometimes, we do have leisure guests who are travelling, but they are not in the loyalty program, but still, they like the brand, they want to travel to the brand and they stay with the same brand.

{audio:0:34:56} The business traveler, obviously, is where for airlines and hotels, the money is?

{audio:0:35:03} Are you worried about business travel, more broadly?

{audio:0:35:09} Maybe worried is too strong a word. It’s something that is out of our hands, because if the borders remain closed, wherever a leisure traveler would want to go, they are not able to.

{audio:0:35:27} But when it reopens, are you worried about business travel?

{audio:0:35:31} Business travelers, actually, they will probably think twice, before travelling, for sure. As I said before, the technology is here and they will think twice before travelling. It’s all about their company restrictions as to whether they will travel or not. If there are no travel restrictions, I do believe that projects will continue coming up, in cities and, therefore, there will be travel again.

{audio:0:36:00} I want to talk about managing your team and influencing your team, to represent the Marriott brand, to guests, correctly. What is the biggest challenge you face, in persuading or training or motivating your team, who are on the front line, with the guests, to represent that high quality that Marriott expects?

{audio:0:36:28} That starts from the first day, when we do the interviews. The interviews are behavior interviews, first. Do you like hospitality? Do you like working on weekends? Do you like the contact with the customers and your colleagues? In hospitality, we have people travelling from all over the world, so you will be working with different nationalities, in the same team. Of course, trusting the employee and giving them the tools to be able to do their job and be able to respond to and take care of the guests. We take care of our employees very, very well, because we think it’s very important to take care of them and make sure that they are comfortable and are really focusing on the work. We give them the tools, we give them the training, we support them and we encourage them to think out of the box to see what you would like for the customers, that you would probably like for yourself, when you travel. Come up with ideas and make them shine. If there is a great idea that we can use in the hotel and we can share it with other hotels, you need to recognize the associate for that. If there is someone who makes a mistake – and we are human and we all make mistakes – it doesn’t mean that they need to be punished, but in fact, the opposite; we need to understand how it happened and how we can help for the next time, to make it right.

{audio:0:38:03} What is the core part of the training, to ensure that the front-line staff are delivering that customer service that you expect?

{audio:0:38:15} It’s to take care of the customers. We take care of the associates and we have the associates take care of the guests and really enjoy the time, when they are at the hotels. A lot of things are happening, behind the scenes for the associates. There are some programs and training there for them, to really give them the empowerment.

{audio:0:38:42} How would you describe the Marriott brand or way of hospitality?

{audio:0:38:48} Take care of your employee and they will take care of the guests. That’s really the core of the company. It’s really important that we take care of our employees as they take care of the guests so that they come back to the hotel and stay with our brand.

{audio:0:39:05} What are the principles you use to really focus on your employees?

{audio:0:39:12} They are the ones who take care of the guests and they are the ones who, on a daily basis, run the operations and are on the floor. The way to take care of them is to give them the tools to do their job, but also, use programs, on the side, to take care of them, such as celebrating their birthdays, celebrating the best associate every quarter, every year. There a lot of other things that we do and a lot of other celebrations that we do for them.

{audio:0:39:52} Did you have to furlough any employees, during this Covid-19 crisis?

{audio:0:39:57} Furlough completely, no. But with the different government schemes, because the hotel is closed, there is a different government scheme that we need to follow. But when we reopen, we will have our associates back.

{audio:0:40:18} Will there be any ramp-up period, to get employees back?

{audio:0:40:22} There will probably be a ramp-up because the occupancy will not come back on the first day. Again, with each government scheme, there are some rules to follow when you reopen the hotels that, if you have a certain occupancy, you have a certain number of employees. You need to be fair with every employee.

{audio:0:40:46} How did you navigate those difficult conversations with employees, during this crisis?

{audio:0:40:56} It’s not a crisis that’s just affecting hotels, but it’s affecting the whole world, so the associates were very supportive and very understanding about the situation. Therefore, it was really a constructive conversation, saying, this is the situation and we’re looking forward to reopening the hotel and go back to normal business. The associates and everybody understood the situation and, of course, it’s hard to say and it’s really dear to the heart, but that’s how it is. It’s not something that’s only affecting our hotels, but it’s worldwide.

{audio:0:41:37} Looking forward then, what are the key variables you are watching very closely, to signal either a return to demand or just managing the situation, coming out of this crisis?

{audio:0:42:07} The first question I ask myself is, when are we able to open the hotels, because that is going to be a key date. We will reopen the hotels and, after that, we will start to operate the hotels, but it will not be the same as we used to do before. But the main question is, when will the government tell us, okay, you can reopen your restaurants, your bars, your hotels, as of this date? That’s really the main question for us.
###{audio:0:42:38} How do you even measure demand when there is no occupancy?

{audio:0:42:44} We have specialists in that field, in revenue management, where they are actually in contact with all the hospitality industry, to see exactly what demand is. Everybody is waiting, actually. Everyone is saying, okay, they said 11th May, so maybe I will start booking for the next month, because I will have to travel and we will see how it goes. We’re really waiting for that date, to have the real pace of booking. Right now, yes, you can book for next week, but then if the government says we’re not going to open, then you’re going to cancel.

{audio:0:43:23} I think, even then, as you said, no one is flying, no one is moving, so it’s almost as if demand is, pick a number; no one knows.

{audio:0:43:37} We will focus a lot on the local business. I live in France, so I have the information from the government and what they are saying and here, a lot of people would love to travel again. The first idea we will have is what we get from the locals. Then we will see how the Schengen area will reopen and the airlines start flying. Daily contact, weekly contact with airline companies, to see what the trends are. How is it going in their industry? As much as we are in contact with the customers, we are also in contact with our colleagues in the hospitality industry and the business travel industry as well as the different tourism offices and airlines.

{audio:0:44:34} So you’ll be focusing on targeting, obviously in France, French customers coming to the coast and really pricing for the local customer, in a way?

{audio:0:44:51} Yes and really looking forward to hosting them in the hotels. Local customers will be the first target, for the country customers, and then we’ll see how, within Schengen, the barometer of how people will travel. If people can start travelling from Belgium to France, then we’ll be happy to welcome them in France and vice versa; or to Italy or Spain. Local customers are the first target.

{audio:0:45:21} In your experience of managing hotels, what are the key bits of advice you would pass on, to someone looking to move into hospitality, in a management position?

{audio:0:45:38} You need to love to share a service and providing a service and seeing the smile on the customer’s face. When I started my hospitality career, that’s what was really driving me to be on board and continue in this industry. There is nothing better than when you have a customer leave the hotel and saying, I’ll see you next week; I’m coming back. Can you please book me the same room? It’s the same length of stay and I’m coming back. That’s the best thing you can hear.

{audio:0:46:13} On top of that, it’s also making the connection with my colleagues and my peers. In hospitality, you travel all around the world. Tomorrow, you can pick up your suitcases and go and work in hotels, anywhere in the world and that’s a great opportunity. Also, making new friends, seeing new cultures.

{audio:0:46:36} What does service mean to you?

{audio:0:46:41} That’s a very big word.

{audio:0:46:44} You mentioned shared service. You said you’ve got to love shared service. If I walk into one of your hotels, what would I need to look at, to really understand that this is, actually 10 out of 10, in service?

{audio:0:46:57} It’s the passion that you put into that service and the way you do it. When I say the service, it can be from providing a room, to delivering a dish to the table, whilst the guest is dining. Beyond that, it’s the passion that you put into it. It’s not just delivering it, but making sure that you are aware of everything. Not just providing them with what they asked for, but going beyond that, and being really interested in the guest. Asking them if they are there for leisure or business and really adapting and providing the information for them. Really putting passion into what the guest is looking for.

{audio:0:47:45} So it’s passion; passion in service?

{audio:0:47:46} Exactly; passion in the service.

Marriott International: Dealing with COVID-19

Comparison of Paris attacks and coronavirus disruption to travel

How hoteliers can adapt room and food and beverage operations post-Covid

How to think about the evolution of ADR and occupancy during a crisis

Potential impact on the operational cost structure of running hotels after the coronavirus crisis

Marriott International: Dealing with COVID-19

Current Area Director of Operations at Marriott International

inpractise.com/articles/marriott-dealing-covid

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Executive Bio

Karim Gharbi

Current Area Director of Operations at Marriott International

Interview Transcript

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Marriott International: Dealing with COVID-19(May 1, 2020)

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