Interview – Kostas Panagakis Discusses the Basics for Hospitality’s Rebirth after Covid-19
Amid the coronavirus (Covid-19) pandemic, Greek corporate communications professional, Kostas Panagakis*, together with his team at Travelworks Public Relations, invested time and effort in understanding and studying the developments and transformational processes which will lead the hospitality sector to its rebirth after the crisis.
“We deep-dived into market data, spoken to industry experts and hotel owners, read investment reports, listened to podcasts, participated in global webinars and gone through an endless list of opinion articles in trade and financial media,” Kostas says.
In light of what they learned, Travelworks formulated an entry-level view of the short and middle-turn roadmap to the tomorrow of hospitality and “hand crafted” a white paper.
GTP Headlines spoke to Kostas and discussed his views – based on extensive research – and expectations for the post-coronavirus era.
“…we are facing a ‘format & reboot’ situation. My feeling is that in the short term (Q3 2020) the only concern for the industry will be ‘putting heads in beds’, with longer-term planning beginning once we hit Q4. It’s still too early to make any assumptions…” – Kostas Panagakis
- GTP: You recently released a white paper on hospitality’s roadmap to recovery from COVID-19. What was the driving force for you to create this report?
Kostas Panagakis: Our key motivator for the creation of this report was our need for clarity. We are a Travel PR Agency working primarily with hotel brands, so it was evident to us from the very beginning of the crisis that our business segment as we knew it was about to change drastically. For our services to remain relevant and add value to our client base, the only way forward was to deep dive into available information and knowledge on the subject, in order to understand the dynamics of change. Having gained certain insights, drafting the white paper just felt like the natural next step. The only reward for me and my team was that this white paper has worked as a “backdrop” for ongoing discussions with our clients and partners regarding our strategic action plan for the next phase. We have laid the groundwork for our next steps.
- GTP: You mention at your introduction that “this is not another PR plan”. How exactly would you describe it? What are your intentions?
Kostas Panagakis: We felt the need to make it clear from page one that this is not another PR plan. A white paper from a PR agency tends to carry the connotation that it is only meant to address communication issues. This was not the case with our work. It would be a huge mistake on behalf of an agency to draft a detailed PR plan with so many pieces of the puzzle still missing (flight schedules, opening of markets, operation status etc). Our aim was to rule out any misreadings of our work.
Our key intention when drafting this white paper was to be as close to reality as possible. Detailed sourcing, credible references and, most of all, a balanced mix of short and middle-term perspectives. It was a document meant strictly for hospitality professionals, so we had to be extra careful. We hope that some of our colleagues and partners across our segment (management companies, performance agencies, sales consultancies) found its information to be useful.
- GTP: Taking a glance of the 2020 momentum concerning the COVID-19 and the travel industry, what do you see?
Kostas Panagakis: This is a huge topic to address. Our only certainty is that we are facing a “format & reboot” situation. My feeling is that in the short term (Q3 2020) the only concern for the industry will be “putting heads in beds”, with longer-term planning beginning once we hit Q4. It’s still too early to make any assumptions or conclusions. There are a lot of unanswered questions, as we find ourselves at the first stages of this process. What I can tell you is that our team holds calls with our clients on a daily basis, in order to update our roll-out plans. Things are expected to move at lightning speed when the lockdown measures are lifted and we all need to be well prepared to support our strategy, whatever that is (even if the plan is to not open for the season).
- GTP: Can we predict when the crisis will be over, and when we will return to normalcy? What should be expected after?
Kostas Panagakis: In my opinion, nobody is in the position to provide a clear timetable which could be used to draft a detailed roll-out plan at the moment. As stated in our white paper, for each hospitality brand, the return to normalcy is a complicated equation, based primarily on domestic recovery as well as the recuperation of the basic geographic markets which make up its guest mix.
In any case, if one were to predict the chain of events that will lead to hotels opening, it’s possible that it would follow this sequence:
– Governments announce lockdown reversal timetables
– Airlines release flight schedules
– Key TOs & TAs resume operations
– Hospitality support functions commence operations
– Hospitality service providers commence operations
- GTP: Amid the anxiety this pandemic has created to all businesses, how difficult is it for brands to see the bigger picture?
Kostas Panagakis: The key question here is not the capacity for each brand to understand change, but how well prepared it is to handle adversity. If your balance sheet is favourable and your cash flow allows you the clarity and time to pause and take in the changes that are underway in your sector, your response will be stellar.
In essence, this is not just about the ability to understand and read the drivers that trigger change. It’s also related to the overall momentum of your business. Your leverage, the extent of your capital expenditure and the stage of completion of your investment plan are just some of the attributes in play. Knowing what must be done is a world away from the actual ability to deliver, given the circumstances and the internal and external constraints.
- GTP: Would you like to elaborate on the decisions a hospitality brand has to make on operations, on sales and on communication strategies in order to safeguard its brand and minimise losses?
Kostas Panagakis: The key topics a hospitality brand has to tackle in order to safeguard its 2020 operation would revolve around the following:
– Address liquidity: refund request handling, debt collection, secure working capital.
– Streamline Operations: review CAPEX, sustain relationships with key suppliers, review cost basis, fortify management information system.
– Sales Strategy: formulate a solid short-term sales strategy, conduct peer group audits on a regular basis.
– Communications Strategy: prepare a quick response plan, be actively out there during the crisis and be ready to communicate your plans as soon as lockdown measures are lifted.
- GTP: We would like for you air your opinion on how the post-coronavirus reality will be like.
Kostas Panagakis: It is very early to make any predictions about the post-crisis reality for the hospitality industry. Our only certainty is that it will be completely different from what we are used to. Take a look at how other sectors have been disrupted: education (virtual classrooms are here to stay), health (tele-medicine), entertainment, telecoms… The list goes on and on.
Hospitality is bound to change, from distribution to marketing and from product placement to PR. I believe that the beginning of Q4 2020 will find us in the position to further discuss these changes.
- GTP: What are your key expectations for the post-COVID-19 era concerning the people, markets, and brands?
Kostas Panagakis: As regards to People I would pick the following expectations from our white paper:
- Reconnection with the human side of hospitality: The wide range of emotions experienced on a personal level during the lockdown is expected to create an array of new needs in the post-COVID-19 era. Before the end of the lockdown, most of us will have bonded with our families and loved ones, and will look forward to everything that we are used to but is no longer available to us, part of our culture but not our daily lives. It’s becoming clear to all of us that much of our nearby environment remains untouched, as we find ourselves newly tempted by parts of our countries left unexplored on the chase for an exotic experience, a “unique” destination. On the short-term, for the hospitality industry, this will lead to a shift towards slow tourism, with all that this entails.
- Being local will be a thing: as we slowly start to grasp the post-COVID-19 reality, it becomes more and more apparent that on a middle-term, travelers will opt for nearby destinations. The above is not only a result of the need to limit high-risk travel, but also of a general change in mentality.
- Travellers will merge vacation time: Aiming to minimise risk, quite a few travelers are expected to limit their trips per year, whilst increasing the average duration of each stay. Avid travellers will most probably refrain to 3 major travel slots (December / April / Summer) and then select weekend escapes within a close proximity of their homes.
- Expect less travel activity from the 70+ age group: Considering the inherent propensity of elders to avoid health related risks, it is a given that, on the middle-term, vacations-related travel will be considered as high-risk. The above is expected to hit hard in the cruise sector, where elders conventionally make up a large portion of the client mix.
As regards to Markets I would focus on the following:
- Travel insurance will be a high priority. In the post-crisis era, travel insurance (including “Cancel For Any Reason” policies) is expected to be a vital part of any booking process. Currently the coronavirus (and any similar event) is considered to be a “foreseen event” and is therefore not covered.
- Mergers and Acquisitions ahead: Cash is going to be king during the next 12 months and on this note, a series of M&A deals are expected, primarily in the TO / TA segment.
As regards to Brands I would suggest looking closer to the following:
- Hotel Hygiene will be a significant selling point: Pristine health and hygiene conditions will become the number one priority in the hotel selection process. Reassuring guests that everything has been sanitised and taken care of will be of pivotal importance for their overall stay experience.
- Hotel chains will attract more independent hotel owners under their affiliation. In the difficult phase of recovery, hotel affiliations are expected to be a safe haven for hotel owners on the basis of their large pools of clients (loyalty programmes), robust marketing networks, extensive PR campaigns and overall knowhow.
- Business Plans will change again; and again: Hospitality brands will need to up their game and learn how to prepare and roll out their operation and communication plans on the basis of scenarios. Demand will inevitably rise in waves, the lengths of which will vary based on a series of macroeconomic & microeconomic attributes.
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* Kostas Panagakis is a corporate communications professional with more than 15 years experience in public relations, digital communications, crisis management and internal corporate communications. He is the founder & managing director of Travelworks PR.
Working closely with a number of high profile listed and private companies, Kostas has prepared and implemented a wide range of tailor made strategic communication programmes across a series of sectors and industries. For the past years, he has focused exclusively on the travel and leisure segment, working with some of the most prestigious hospitality brands on the market.
Kostas and the multi-award winning Travelworks team have developed a loyal clientele base of top hotels and restaurants, including members of Leading Hotels of the World, Small Luxury Hotels of the World, Preferred Hotels & Resorts and Michelin Star Restaurants.
With a BSc in Business Administration and an MSc in Applied Economics and Finance, both from Athens University of Economics & Business, Kostas began his career in the financial services industry, soon specialising in communication. Prior to founding Travelworks, he provided advisory services on all aspects of corporate communication for multinational companies.