Hotels and tourist destinations are opening up but with new social distancing regulations the impact is far-reaching for the industry. All hotel chains have implemented and published their new hygiene policies, giving their corporate clients the reassurance they need that all delegates at their meetings will be protected. However even if companies decide to book face-to-face meetings, their staff need to feel safe and be happy to attend. It is widely anticipated that some meetings will remain virtual with arguments of both cost and time savings. Whilst others hope for a return to live meetings, recognising, however, that many will be hybrid – with some delegates attending face-to-face and others joining remotely.
Industry research
Higher levels of optimism in the business travel sector have started to appear, according to research issued in mid-June by the Global Business Travel Association (GBTA). Domestic and essential business travel are likely to resume first, especially with health and safety standards across the industry. In 2019 Polish hotels enjoyed 70% occupancy following a decade of growth, in 2021 it is anticipated at around 50%. According to the OECD the direct and indirect impact of tourism represents around 6% of Poland’s GDP, so the knock-on effect of a slump in the industry will be felt in the economy at large.
Hotels’ perspective
The hotels have stepped up cleanliness standards and can arguably boast they are as hygienic as a medical facility, with ample shiny bells and whistles. To quote the Marriott chain, ‘We are reimagining how we can deliver the customer experience in a hygienic yet human way’.
Some of the stringent sterilisation measures may not be visible as they will be implemented prior to arrival or when guests are not present so as not to disturb them. Other measures will be a permanent feature of the new normal with armies of gloved and masked cleaners wiping down surfaces day and night. Some business group bookings are being made for the autumn but far more for 2021. However, in the leisure market, the promotion of the term ‘staycation’ will boost holidays in the home country. The long Corpus Christi weekend in June witnessed 100% capacity in hotels in Sopot. Whether enclosed receptions like Christmas gatherings or New Year’s parties will be popular remains to be seen; much will depend on the development of a vaccine. Current thinking suggests that many individuals and corporates will defer till 2021.
The corporate market
Speaking to organisers of a major annual awards ceremony in Poland, they stated that with the landscape changing weekly, so too are plans. Although scheduled for December, they are currently considering a hybrid event combining a mix of delegates both in person and via video link. The decision will be made in September, by which time restrictions for group gatherings may be further relaxed and also people may be craving physical contact. In my view the motivational impact of delegates’ achievements being acknowledged publicly, to an audience you can personally interact with, cannot be matched over the screen.
There is considerable disparity regarding the number of delegates allowed to attend events globally. Even when regulations are relaxed it is anticipated that MICE events may be restricted to 500 – 1000 delegates. Whatever is permitted by national governments, some companies have suspended all live events till next year, as did Microsoft when it announced postponement till July 2021.
With such a volatile situation if corporations are currently planning events for 2021, they will probably be looking to hold events nationally and possibly within driving distance.
When an event is dependent on commercial sponsorship there is considerable risk of a drastically reduced audience, so all have postponed till 2021.
This on-going, yet inevitable uncertainty means that robust force majeure clauses in contracts are paramount. I work with HelmsBriscoe which has a library of recommended clauses and extensive experience in negotiating contracts with hotels and venues to ensure the best protection for our clients. This can be an extremely difficult balance for hotels which need to minimise losses but maintain good relations when clients with whom they have long-standing relationships are forced to cancel or postpone. Many HelmsBriscoe associates have success stories where despite being legally obliged to pay hefty cancellation fees, we have negotiated for our clients a favourable outcome of fee reduction, waiver or credited if the event is postponed.
2021 and beyond
Although there are bookings for autumn 2020, larger meetings have been postponed till 2021, even into the second quarter. This means that there could be a lack of availability if companies wait too long to make provisional bookings. The success of working virtually will be the new normal for many companies adopting more flexible working and meeting practises. However, most of us recognise the value of meeting in person with work colleagues, clients or prospects to network, to strengthen our relationships, and to benefit the business. With the additional safety precautions in place, industry professionals are confident that there will be renewed enthusiasm for that indispensable human touch.