Hospitality has been unimaginably tested during this time and, while we are not a front line hospitality business, our fate is directly tied to the industry as a specialist agency. The last few months have been tough, as they have been on everyone, but I just wanted to openly and honestly share our situation and how I feel we are somewhat breaking the back of it now.
How We Pivoted Out Of a Crisis
As a smaller sized company it was pretty scary seeing over 50% of your revenue disappear overnight. We had a robust client base with around 70% revenue from retained contracts with 30% being ad hoc software builds. It was a revenue base that Steve and I had worked for years to build; much of which evaporated in a puff of smoke.
Unfortunately, if there is one lesson from the financial crisis that hospitality suppliers will know about it is that marketing is one of the first budgets to be cut and is often the last one to be reinstated. I’m not sure where exactly that all stems from but it has had the effect of hitting us at Umi very hard indeed. We are a company that has grown organically without group support, investment or by taking on debt so there were no get out of jail cards to carry us through.
While the various government schemes have definitely seen us through, the double-edged sword for us was that we were not able to close, go dormant and furlough everyone. Our 200 websites needed to stay online and secure, the reporting, the fixes, the security, server costs etc. All the while payments from clients were being frozen, media spend stopped and most software projects put on ice. Throughout the majority of the lockdown, it was furlough or no furlough, there was little flexibility and that left the team with time and resources available to innovate.
As a result of this we had the challenge of working out how much we could afford to lose in the short term to ensure both the long term success of our relationships and managing to survive potentially months on end running at a significant loss. The medium we had to strike was somewhere between over-service and risk the future survival; or under-service and risk the longevity of our current client base.
While the balance was struck financially, we found ourselves with quite a bit of time and resource to play with internally. Many of our client contacts were on furlough so there was generally less of the normal work to do. The team that was unable to go on furlough had a number of continued support tasks to look after but our goal from the start was to invest the rest of that time into something new and helpful for hotels to help mitigate some of the hotel losses.
Introducing Umi Labs
To structure this, we went about structuring Umi Labs, a process and internal wrapper that we are now using for specific innovative projects. These new ideas can be developed, piloted and then potentially rolled out into our wider service/product offering. Many of our hotels have been very keen to try things out and we’re really grateful for their willingness to innovate with us!
At the beginning of lockdown, Umi Labs was focussed primarily on eeking out every possible bit of revenue for hotels and lead to the creation of projects like:
- Gift voucher eCommerce plugin for hotel websites
- Branded virtual reality headset for show rounds
- Quick-deploy COVID info banners and alerts
Alongside this, Tom ran an extensive analysis of how the whole hospitality network was performing and the details can be seen here. What stood out to us from the data was that there was revenue to be generated, albeit small, if hotels could tap into changing demands and purchasing capabilities. Vouchers, food boxes, virtual experiences etc. More often than not, there was no mechanism to execute on this so the goal here was to create technology to enable these revenue streams.
As we now progress through the reopening for hotels, much of our innovation has been focussed around supporting the internal hotel operations through digital tools. Umi Labs again has had a number of ideas and projects that include:
- Custom Alexa Skills for enhancing a touchless in-room experience
- Live webcam analysis software to alert of crowding in communal areas
- Online check-in web-app, passport scan and payment gateway integration with deep integration to Hotel Time PMS
- Using static site technology to deploy lighting fast digital menus for guests in the hotel/restaurant.
While these innovations are widespread and they have often only been tested in a handful of hotels, what it has shown us is that R&D and prototyping can be done very rapidly.
Both our future success and the success of the hospitality industry will rely on being far more flexible with revenue streams and digital implementations. Should there be any ideas or tools that you think could help hotels pivot out of the crisis, please do give us a shout and we’ll be delighted to discuss how we might be able to make them a reality in Umi Labs.