Mark Simpson on how hospitality and travel businesses can survive coronavirus. London faces worse damage than other regions. When lockdowns ease, domestic staycations and pent-up demand could reward businesses that pause now and relaunch with modest marketing budgets. Many hotels with fixed costs will close permanently, shrinking supply.
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What sort of words of encouragement, what sort of advice can you pass on to people that may be tuning into this right now? First of all, if you're outside London, things look much better. It's not even half of the effect that we see in London, outside London. And that's because I think a lot of people who are in London are feeling quite stuck in their tiny apartments looking for a bigger place. So there's definitely a different kind of market, more the staycation. You know, nationals traveling inside the UK maybe who don't have a second home but could afford to go somewhere else now that the lockdown is being enforced. So look out for those. And then if you're looking more at the long term, just consider the fact that everyone is in the same boat and below you are the hotels that have got fixed leases that, you know, they can't do anything about, number of staff, etc. Those are in much dire conditions and those are likely to actually close some of them permanently. Which means that when demand picks back up, there's going to be a shortage of supply. The same way that demand has sort of evaporated very quickly. It will come back very quickly because people stuck at home. It's not good for relationships to be stuck 24 hours a day. There's going to be a lot of divorces at the end of this, I'm sure. But jokes aside, the industry of travel is one that people. As much as it's considered to be a leisure and an enjoyment, it's also something that people need. People need a break, you know, in one of those destinations that are easily accessible for people, then you're likely to benefit if you can just pause your business for the next three months or so and then reemerge with, you know, everything to go out with a little bit of budget for marketing, and you're likely to benefit a lot from those bookings at that.