By Hans Pfister, President, and Co-Founder of the Cayuga Collection
A few days ago, I was giving a presentation to a group of MBA students from NYU Stern on sustainability in the hospitality industry. After the presentation, one of the students asked me what I would have done differently in terms of steering the Cayuga Collection through the Covid crisis.
I had to think for a moment. But shortly, it became clear to me that we did a lot of things right. However, in some cases, we probably should have acted earlier and more firmly.
Ever since June 2021, we have broken monthly sales and profitability records month after month and are currently having our best year ever. It is hard to believe this after we were on the brink of bankruptcy in the summer of 2020.
The biggest lesson that we learned from the pandemic was that “it is all about the people”. We kind of knew this already. After all, in 2018, we were rewarded for our efforts by winning the WTTA Tourism for Tomorrow Award in the people category. Now, it is crystal clear.
One of the things we did well during the pandemic was trying to take as much care as possible of all our staff and be as “human” of a company as we could be. Unfortunately had to let go of almost half of our staff in April 2020. We decided to not do the furlough model and instead distribute a substantial severance payment to everybody that was let go. Our former staff greatly appreciated this even though it was a hit to our cash flow at first.
The staff members that remained had to accept salary reductions as our income was reduced to zero in the first months of the pandemic. The airports were closed, and tourism was prohibited by law. Some could not afford their rent anymore, so we let them move into the hotel temporarily. We also sent out packages with food to former employees to help them make it through the worst.
Everybody that remained at Cayuga stuck together and soon we developed our Cayuga battle cry. Strong today – extraordinary tomorrow. This kept us going. Instead of lamenting and worrying, we started a training marathon with the staff at the hotel. We took up all the things we never had enough time to do. We invested idle time during the hotel closures in hours of teaching, learning, and sharing. This really helped us make it through the worst in the months of April, May, and June. We felt that there was a purpose and that something better was to come.
As soon as June came, we were able to reopen our first hotels for the local market and we were ready. Starting August, we were able to increase pay to our current employees and little by little bring back old ones. Today, we have the best team ever. Our staff is paying us by taking exceptional care of our guests. We never felt “the great resignation”. On the contrary, we have local community members lined up to work at the Cayuga Hotels as the stories of how we took care of our staff circled in the community and positioned us as the employer of choice.
Another important factor to our current success is the fact that the day we had to close our hotels, we started to think of reopening. I told our staff in April 2020 that hard times are coming, but this is not the end of the world. We will come back and we need to be ready.
So this is how we planned our comeback!
Not letting maintenance of the hotel infrastructure slip was key. When the hotels were closed, accountants, guides, receptionists, chefs, servers, spa therapists, and everybody else helped keep the hotel look and feel “like new”. There is no other way, especially in the tropics with the extreme weather and salt spray from the ocean.
And of course, we knew that we needed to become more efficient than ever. We worked hard on becoming lean, using and upgrading technology, and eliminating processes that did not add any value. We also did an innovation contest in late 2020 where our staff could win cash prizes and recognition by proposing ideas. More on this in this blog here.
A couple of good friends and colleagues also taught me early during the pandemic not to stop marketing (thanks Casey and Richard) and rather to double down on communicating with our former guests, potential guests, and agency partners. It was important to us to honor our financial commitments and not burn any bridges even during these difficult times. We found ways to work things out.
Our most successful initiative was the sales of the Green Future Bonds in June 2020. Our former guests and agency partners could buy future vacations at a 50% discount, and this allowed us to raise over $165,000 during a time when we had zero revenue from operations and lots of payment obligations. We will be eternally grateful to everybody that supported us and believed in us during those very uncertain times.
We spent all of 2020 and most of 2021 in Zoom presentations, webinars, virtual trade shows, live broadcasts from our hotels, and keeping in touch with our former guests through a series of mailings and social media outreach. We even launched the Cayuga Gratitude Giveaway for loyal agencies and tourism partners that did something special for a client or a colleague during those hard times. More about this program in the blog here.
When we had the opportunity to reopen our hotels for the local market starting in June 2020, we were very skeptical at first. But opening our hotels as soon as possible was probably one of the best decisions that we made. There is nothing more depressing than a closed hotel and we learned that the wear and tear of the infrastructure of a closed hotel in the tropics might be worse than when we operate.
Finally, a word on sustainability. Cayuga is considered a worldwide leader in sustainable tourism, and it was clear that we would not cut corners in terms of our values and commitment to sustainability even in a pandemic.
We did not cave into going back to single-use plastics that we had banned from our properties almost 15 years ago. Today, we know that triple wrapping things in plastic did little to prevent the spread of Covid.
We have never made more donations in the communities where we operate than during the toughest months of the pandemic. Money was tight for everybody, but a few thousand dollars went a long way, even though we all wish we could’ve done more. The managers at the hotels made sure that the donations made it to where they were needed most. Supporting a senior citizen home in Quepos, improving educational facilities in Monteverde, helping indigenous communities near Puerto Viejo, and getting the National Park in Uvita ready to receive visitors again were just a few examples of how we spent our funds.
Staying on track with our sustainability efforts was rewarded by winning a Global Vision Award from Travel Leisure as we are currently one of six hotel brands worldwide that are changing travel for the better.
A special thank you goes out to the owners of the Cayuga Collection Hotels. Benjamin, Pablo, Alejandra, Martin, Dave, Scott, Johnny, Lisa, Elizabeth, Elena, and Karen. We would not be where we are today without your support and belief in us. We promise you that the best is still to come!
Oh, and one more thing. On a personal level, what I would have done differently is to travel more in Costa Rica with my wife and children when the country was closed to visitors from abroad. What I remember are empty beaches, lush forests, wildlife everywhere, and a spectacular hike in Monteverde’s Cloud Forest reserve with my daughter.
What would you have done differently with your business? Send me a note at email@example.com. I would love to learn from your experience.