• Innovation & Transformation
    • Covid-19

How COVID-19 is Spurring Innovation in Hospitality

  • Article

Touchless and digitized experiences, new partnerships and more.

Hotel occupancy worldwide was enjoying years-long growth leading up to the COVID-19 pandemic. Then came the global shutdown, which closed borders and ushered in months of travel restrictions. Demand for accommodation fell dramatically, with hotels reporting that occupancy for the week ending March 28 dropped by 77.3% compared to the same time in 2019. Short-term rentals also suffered, with a decline of more than 45%. As a result, the entire hospitality sector had to think fast and get creative to serve the global travel community’s short-term needs while also positioning themselves for the future.

As a tech-enabled hospitality company providing a ‘contactless’ guest experience, HSBC client Sonder was in an ideal position to build on their digital offerings. Incorporated in 2014, the company is headquartered in San Francisco and has more than 10,000 studios, lofts, hotel rooms and apartments in cities across North America, Europe and Dubai. "When the pandemic hit, our self-serve app-based service already gave guests contact-free check-in, keyless entry and 24/7 virtual support via the app, phone or text," explains David Watt, Head of Treasury for Sonder.

Being ahead of the industry from a technology standpoint allowed them to quickly add features designed to help guests resolve even more requests on their own

They also formed partnerships to make it easier to arrange for parking or free delivery from local restaurants and groceries right from their app.

According to a recent Deloitte publication, The Future of hospitality: Uncovering opportunities to recover and thrive in the new normal, COVID-19 has accelerated consumers’ adoption of digital technologies and experiences in general. This includes traditionally high-touch industries such as hospitality – with more and more travelers looking for self-check-in and check-out, touchless payment and app-based services such as Sonder offers today. However, as the virus lingers, Deloitte says travelers also want added peace of mind that the spaces they use are clean. Some hotels, for instance, have begun to seal rooms once they’ve been sanitized.

Daniel Neumann, SVP & Chief Financial Officer for HSBC client The Leading Hotels of the World (LHW), agrees. “I believe trends such as elevated cleanliness standards and contactless technology will play a role in the industry long after the pandemic.” As a global company that has provided sales, marketing, distribution services and more to independent hoteliers for over 90 years, one of the first initiatives LHW undertook on behalf of their members was their Healthy Stays commitment.  “We started by creating cleanliness guidelines and protocols for COVID-19 disinfection to help our hotelier members create the safest possible environment for their guests.” They also partnered with the Global Biorisk Advisory Council, a division of ISSA – enabling their members to earn GBAC STAR™ facility accreditation for cleaning and infectious disease prevention. Likewise, Sonder implemented procedures for training housekeepers on cleaning and sterilizing rooms once guests have checked out.

Sonder knew they needed to focus on agility as well as building on the technology they already had in place. That's why in addition to building on its digital offering, Sonder launched a discounted long-term stay program to accommodate the changing needs of travelers.

"While our core business has been to welcome travelers for 7 nights or less, we knew the pandemic would lead some people to look for safe, self-contained living arrangements for extended stays with fully-equipped kitchens and in-unit laundry," David says.

LHW’s hoteliers have also been successful in offering flexible, creative solutions that add technology and serve guests safely. In the U.S., for example, the Acqualina Resort & Spa on the Beach in Florida has been working to improve its Acqualina app. “Guests can now pre-schedule housekeeping, shop virtually at the boutique and book private cabanas in advance,” explains Daniel. The app will also provide keyless room entry and take the resort's bedside reading program digital, making books that were once offered in-room available for download via a QR code. Meanwhile, the Malibu Beach Inn in California stayed open throughout the pandemic with a remote work-from-hotel package that allowed local residents to reserve seaside rooms to use as their offices for the day and now offers a “Back-to-School Beach Edition” package that caters to virtual learning, and the Hay-Adams in Washington D.C. unveiled an open-air dining experience at the Top of The Hay, which had previously only been used for private events. 

The result of their creative thinking and hard work? Sonder has seen higher occupancy rates than others in the industry are currently experiencing, and the majority of LHW properties that were once closed due to the pandemic re-opened by end of summer.

Both also agree that having partners on their side helped them see their way through the complexities of the pandemic. This includes a strong financial partner. For LHW, that meant help navigating the Paycheck Protection Program (PPP). “The HSBC team was instrumental in our getting a PPP loan, and they continued to provide support as the environment changed,” says Daniel. David from Sonder says HSBC helped them connect their systems to automate vendor payments, which has positioned them to scale up while keeping processing costs low. “The bank has also issued letters of credit for lease security, which allows us to grow while also preserving liquidity.”

At HSBC, our goal is to help our clients thrive – even in the most challenging of environments. That’s certainly what 2020 has brought to many businesses, especially those hardest hit by global shutdowns such as the hospitality sector. What we saw was a world that came together, forming unlikely partnerships in some cases and leveraging long-time relationships in others to reinvent business models or create new solutions. We’re proud to be able to support the resilience our clients have shown as they continue to innovate toward success.