From quarantine facility to holiday destination: Will hotel reputations suffer from Covid-19 association?

New Zealand hotels used as managed isolation and quarantine facilities may run the risk of their brand being associated with Covid-19, says a marketing expert.

All people entering the country are required to spend 14 days in managed isolation or quarantine at a designated facility across the country.

The Government has contracted hotels to provide the service, with 32 of these facilities currently set up in New Zealand: 18 in Auckland, three in Hamilton, three in Rotorua, two in Wellington and six in Christchurch.

Auckland hotel M Social, one of the 32 Covid-19 managed isolation hotels for arrivals into the country.

Supplied/ M Social

Auckland hotel M Social, one of the 32 Covid-19 managed isolation hotels for arrivals into the country.

“Two ways hotels have tried to increase revenue is by targeting domestic tourists and serving as quarantine hotels,” said crisis management expert Daniel Laufer, associate professor of marketing at Victoria University of Wellington.

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“Serving as a quarantine hotel is beneficial for a hotel in the short run, however there is also a risk to the brand after Covid-19.”

Tourists might be wary of staying at a hotel that served as a quarantine facility, Laufer said.

“This may be particularly problematic for hotels housing people with Covid-19, such as the Jet Park Hotel,” Laufer said.

Jet Park Hotel in Auckland and Hamilton were being used solely by the Ministry of Health and were closed until December 31, 2021. However, Jet Park Hotel Rotorua remained open, and was not hosting returning travellers.

Jet Park was contacted for comment, but directed Stuff to the Ministry for Business, Innovation and Employment.

At one end of the spectrum, some hotels might not end up hosting anyone with coronavirus, so there would be minimal publicity and not a lot of risk to the brand, he said.

The risk was higher for hotels where the association was specific and repeated.

Auckland’s Jet Park Hotel, which is being used as a quarantine hotel, and will be closed to the public until December 2021.

Hannah Peters/Getty Images

Auckland’s Jet Park Hotel, which is being used as a quarantine hotel, and will be closed to the public until December 2021.

“Whenever a new case of Covid-19 arises, health officials such as Dr Ashley Bloomfield highlight during press conferences the transfer of new Covid-19 cases to the Jet Park Hotel.

“The Government is 100 per cent right in disclosing to the public, but at the same time when there’s a constantly repeated brand, that has an impact.”

A more famous brand that suffered the fallout of being associated in people’s minds with coronavirus was Corona beer.

However, Corona, which derived its name from the Sun’s corona, had held up and was recently named the world’s most valuable beer brand by Brand Finance. It was one of the most popular alcoholic drinks bought in New Zealand during the level 4 lockdown.

Usually such association was beyond the control of brands, but if the publicity was negative enough a company might consider changing its name.

People’s fears about coronavirus did not have to be rational to be damaging to a brand such as a hotel which sold itself as a safe, comfortable and pleasant experience, he said.

Daniel Laufer, associate professor of marketing, Victoria University, says the risk is higher for hotels repeatedly and publicly associated with Covid-19.

SUPPLIED

Daniel Laufer, associate professor of marketing, Victoria University, says the risk is higher for hotels repeatedly and publicly associated with Covid-19.

Chris Bennett, Colliers director of hotel advisory and valuation, said it was unclear whether association with Covid-19 would have long-term implications.

“People’s memories are short, so it’s impossible to tell,” he said.

“Potentially it could be [damaging], but at the same time these hotels have all implemented pretty strong cleaning measures, particularly all the big brands, so I think people have some trust in that.”

Joerg Finsterwalder, associate professor of marketing at Canterbury University, said a premium hotel would make it very transparent how they keep the hotel in shape during quarantine and self-isolation.

Reviews on Tripadvisor and similar sites would give an indication of how guests were treated, and also of how well the hotel had managed the situation, and its standards, he said.

“A high quality, top hotel would have to be very, very meticulous because they need to maintain their brand image because they can’t have that tarnished just by quarantine processes.

“It’s a very careful decision to be made, it’s reputation versus making money so to speak, because there is a tradeoff in that if you’re not careful.”

There was no sign yet of hotels dropping their prices to attract guests, Finsterwalder said.

“I think there was an expectation towards the end of the year that because we only have domestic tourists that hotels would drop their prices, but it seems that everyone wants to go on holiday towards the end of the year.

“So I don’t think hotels have dropped their prices much – on the contrary, I think there’s quite a high demand for hotels and accommodation, not only for January when kids have their school holidays, it’s already picking up now.”

New Zealand Hotel Owners Association executive director Amy Robens said managed isolation hotels met all the requirements to house people safely during their mandatory stay in isolation.

“Hotels maintain stringent and leading-edge health and safety protocols in line with Ministry of Health guidelines, rooms are thoroughly cleaned and sanitised with particular detail to high touch points,” she said.

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