Jorgen Christensen

Since April 2020, we have been running the Hotelier PULSE Report series to track the evolution of hotel industry trends as hotels embark on the road to recovery. Each month we survey hundreds of Hotel industry leaders from CEOs to General Managers on hot topics that remain top-of-mind during these unprecedented times.

For the upcoming November edition of The Hotelier PULSE Report, we have launched a brand new Hotelier Spotlight segment, where we interview Hoteliers to get insight on how their businesses have responded to the crisis and what the sales and marketing priorities are for recovery and beyond.

For the first Hotelier Spotlight interview, we had the pleasure of catching up with Jørgen Christensen, CEO at Small Danish Hotels to understand the Group’s journey through 2020 and what’s on the agenda for 2021.

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One question
I always ask myself is: Where will our next hotel guests come from?

What was your initial reaction to the crisis and your hotel group’s short-term priorities to overcome it? Has this changed today?

Shock was the initial reaction for all of us at Small Danish Hotels, and I am sure every other hotel and group worldwide. To suddenly go from a record-breaking 2019 to facing permanent closure, privately-owned or family-run hotels felt this shock more severely. In the first few weeks of the crisis, I felt more like a shrink than a Hotel CEO because everyone was very preoccupied with what was going on.

But fortunately for Small Danish and other hotels and groups here in Denmark, the Danish government was very quick to deliver help packages to the hotel industry.

One month into the crisis, after the initial shockwaves passed, we all began to think about the new world our hotels would reopen into and what the restrictions would be. More importantly, we wondered: “Will there be any guests visiting? Where will our revenue come from?”

In May, when most hotels reopened in Denmark, there was a significant shift in focus towards sales and marketing. Luckily for us, the boom came almost straight away and reservations poured in from local guests and travelers from surrounding markets such as Germany and Holland. This trend replaced our initial concern with hope for the summer months.

What is top of mind for you and your Hotel Group right now?

Over the past six months during this unprecedented period, our sales and marketing strategy has remained top-of-mind for our group of hotels in Denmark. One question I always ask myself is: “Where will our next hotel guests come from?”

Although Covid-19 is largely under control here in Denmark, we do see areas where cases increase more than we want them to. Immediately this affects our hotels, and we see the impact in the cancellations.

For the wider industry here in Denmark, a major concern is the extremely low levels of business travel, both domestic and international. Currently, leisure travel is the segment where most hotels in Denmark are generating business during this time.

What has the industry implemented that you think will be an improvement to the industry going forward?

There is certainly an even bigger focus on the customer journey right now. There is no doubt in my mind that many hotels are ramping up their sales and marketing efforts to tackle new markets, and particularly local guests, given how domestic travel is the number 1 segment for us right now.

There is also an increased focus on the reasons to visit a hotel. I expect more hoteliers will be actively creating special packages to set their hotels apart and communicate the benefits of booking a stay, such as local attractions in the area or discovering cultural experiences.

Direct bookings have also increased in importance because hotels are looking to save costs. Here in Denmark, we have already seen this trend over the summer, with some big campaigns urging guests to help local hotels by booking directly. I also expect many hotels will be reconsidering OTA partnerships, which don’t really distinguish one hotel from another, apart from price.

And of course, the industry is now increasingly focused on the wellbeing, health, and safety of guests. In Denmark, the industry launched an initiative called, “Safe to Visit”, where hotels that implement enhanced health protocols can showcase compliance to reassure guests.

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About Jørgen Christensen
& Small Danish Hotels Jørgen Christensen is the CEO of Small Danish Hotels, a voluntary association consisting of individually owned inns, hotels, castles and manor houses throughout Denmark. All are rated 3 stars out of Hotelstars Union's hotel rating. In total, Small Danish Hotels has approx. 4,000 rooms.

In your view, what will help hotels remain competitive in the current climate?

There is undoubtedly a huge focus on Health & Safety at the moment. I expect this is where smaller, independent hotels and particularly resorts will have a huge advantage over larger hotel chains and city center hotels because today’s customers want to stay in properties where there are not so many people.

I think also we will see a major uptake of digital services to remain competitive, such as online check-in, for example. At the moment in Denmark, we see a lot of these guest communication systems where hotels stay in contact with guests before, during, and after the visit, and thus minimize the need for guests to interact directly with hotel staff.

Obviously price is a huge factor at the moment, and I am sure many Hotel Managers are considering lowering prices to remain competitive. However, I doubt that the prices will severely drop here in Denmark. We have the highest VAT for hotels in Europe at around 25%, whereas all the countries around us have lowered the hotel tax due to Covid-19. So, therefore, if Danish hotels lower their prices even more, well they may as well close their doors now.

Despite the uncertain climate, is there anything you are looking forward to?

Well, I am looking forward to a cure for Covid-19, that’s for sure!

But despite the times we live in, some positives have emerged from the pandemic. As a society, people are reflecting more on the quality of their lives and taking time to pause. From a commercial perspective, this could bode well for resorts, including Small Danish Hotels.

Although it’s a shame that not as many people are traveling the world as before, this will be the reality until things stabilize and hotels will need to adapt. We advise hotels to focus on their own activities, such as strengthening their websites or focusing on their social networks, to find new clients.

What would you say are the top Sales & Marketing priorities for Small Danish Hotels over the next 12 months?

Well, we need to focus on being as much of a support for increasing as much awareness about Small Danish Hotels as possible. Our number one priority is to ensure that our hotels will be what clients are searching for to book stays, which means that we have to optimize all our sales channels all the time.

Currently, we are prioritizing our loyalty programs, to make them even stronger and better than ever. Communication with our guests will also continue to be a major focus for us, particularly in the current climate.

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I expect many hotels will be reconsidering OTA partnerships, which don’t really distinguish one hotel from another, apart from price.

We advise hotels to focus on their own activities, such as strengthening their websites or focusing on their social networks, to find new clients.

We are seeing a continuous increase in hoteliers who believe direct bookings will increase in importance. Why do you think that is?

I believe this trend is strongly motivated by cost. It’s certainly more cost-effective to generate a direct booking rather than pay commission fees to third parties, especially when all other business channels are down. Given the economic state, in my opinion, hotels should primarily focus on their own sales channels.

Since launching the Hotelier PULSE Report in April, the majority of Hoteliers surveyed expected to recover to 2019 levels in 2021. Today, we are seeing the expectation shift toward 2022, particularly in the City Center Hotel segment. Why do you think that is?

While we are in unprecedented times, the economic impact of Covid-19 on the industry is actually very similar to what we saw in the financial crisis of 2008, where the first travel segment to disappear was business travel.

This of course leads to GDS business going tremendously down, and we are seeing how this is really critical for city center hotels. These properties are currently not generating a lot of business, and operating at only 25% or 30% occupancy. September is normally a huge conference month for all major cities in Denmark, but this market has vanished in 2020.

And let’s not forget that it is in cities that we really see the contagion threats of the pandemic, more than anywhere else due to the dense population. This too hits City Center Hotels.

On the flip-side, sales in the Leisure Travel market remain stable, especially for resorts which were fully booked from local markets throughout the summer. The Danes still want to go out on short-time holidays at home. This was the case in 2008, and it is the case again now.

That being said, I do agree with the 2022 forecast. Obviously 2019 was a major record for hotel stays in Denmark, and for our group it was the best year ever. But until we find a cure for Covid-19, uncertainty will still have an impact on consumer behaviours.

What do you expect to happen when a cure to Covid-19 is found?

When a cure is found, people will likely go crazy with excitement to travel and live life again. However, I do think travel to more exotic locations may be a bit slower to pick up again, because consumers will be concerned about the risks of falling ill in developing countries without access to proper healthcare. But ultimately, I think many people will be excited to travel again.

And finally, what would be your advice to other Hoteliers navigating through this uncertain time?

Hotels will need to be ready to engage with new types of guests and new markets. In Denmark, we are currently seeing an increase in young people - normally the number one demographic for international ‘big city trips’ - travelling domestically and booking local stays. Therefore, hotels will need to adapt in the coming months.

In addition, I think hoteliers need to prioritize new and hopefully more cost-effective sales channels in the months to come.

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