The Comeback: Case Study of a Comeback
In the episode, “Case Study of a Comeback” we were joined by Yatin Patel, Chief Executive Officer and co-founder of the hotel booking giant, Reservations.com. In an enlightening conversation, Patel chronicled his inspirational journey from pre-pandemic success in the travel industry to the crucial steps he took to rise out of the fall. It’s a survival of the fittest story you won’t want to miss.
The impact to the travel industry due to the COVID-19 pandemic reached unprecedented numbers as major airlines reported $4.5 billion in combined losses for the first quarter of 2020. As a result, 5.9 million travel-related jobs are expected to be lost because of the coronavirus, according to the U.S. Travel Association.
Now, imagine you’re Yatin Patel—a successful entrepreneur whose business relies heavily on the travel industry. In a candid interview, Patel explained how Reservations.com went from a thriving travel business to experiencing a devastating loss of 90 percent of its bookings—in one week. In his words: “95 percent of our business was gone completely.” For many other entrepreneurs, these unforeseen impacts would be crippling. Read on to learn how Patel embraced this drastic decline and engaged a new action plan to emerge even stronger than before.
Patel jumped into action and realized this was not the time to sit around and take a “wait and see” approach. To set the stage for his action plan, Patel first examined the hard reality of the impacts. As millions of dollars in cancellations were occurring every day, approximately 10,000 travel customers were calling daily for refunds—that’s hard cash, not credits. And what made this an even harder reality was the fact that Reservations.com got paid when customers checked out of the hotels after their stays. This meant the company’s revenue plummeted to almost zero. It was time for a proactive approach. Here are some of the critical steps Patel included in his action plan:
- Play offense—not just defense
- Protect employees and customers
- Assign new roles
- Rebuild financial plan
- Model your exposure and stress test P & L and liquidity
- Focus on immediate priorities/“no regret” action
- Defend against revenue declines
- Build trust and loyalties
- Stabilize operation to new normal
- Plan urgent cost-cutting
So, what does it take to be the fittest during these uncertain times? Patel says optimism was key to coming through the pandemic better and stronger than before. “Fear is a dangerous thing,” he explained. “Remaining optimistic and displaying that optimism to my team was instrumental in changing their thinking.” Here are some key elements to his strategy:
- Put money into branding
- Build cash reserves—liquidity in company
- Reevaluate your demographic
- Use current data to capitalize on media buys
Building trust and loyalty
First and foremost, Patel states that his customers are number one. He explains how travel is not just a lifestyle but also a product that requires a human touch. But in a time of quarantine, how does a company like Reservations.com retain its integrity as well as its customers during an unforeseen pandemic? The answer, according to Patel: “Go to extremes to keep your customers happy.” Here are some ways he achieved this goal:
- Issued cash refunds on cancelled bookings
- Contacted thousands of hotels by phone to ask for cancellation waivers for his customers
- Emailed customers during this difficult time
What it takes to be the fittest: 10 steps in 30 days
Patel outlined his strategy for what it takes to be the fittest for a successful comeback. Here is his 10-step plan in 30 days:
- May your pivot—your new SWOT analysis
- Reset KPIs and goals
- Leadership and communications: Transparency and empathy
- Double-down on digital delivery: Transform your physical and analog transactions to online
- Maintain intent capture
- Commit to new types of content in 30 days (e.g. podcasts, Facebook Live)
- Reallocate media: Take advantage of low CPMs
- Refocus on your local market
- Segment your database: Virtually hug your high-value customers
- Celebrate your wins
A proactive approach, combined with a positive outlook, is key when it comes to a strong, successful comeback. Patel believes now is the time for everyone to engage their entrepreneurship and creativity in order to build an even stronger future.
You can watch the entire episode, and others in this series, by clicking below.