Case Study
The client was a mid-size 5 star hotel in a primary european city, requesting a total revenue management & distribution review. The hotel had suffered from stagnant growth over the previous 3 years, with a fixed annual occupancy of 65% and EUR125 ADR. The brief was:
- Identify challenges in existing RM culture & practice
- Recommend a revised IDS strategy to increase revenue & positioning
- Evaluate GDS share and MPI and recommend future growth strategies
Evaluation Set-UpAn initial evaluation audit was completed with on-site data collection and interview period, followed by report write-up and an on-site presentation of the findings and recommendations. The audit was structured as follows:
Organisational Set-Up | Segmentation | Channel Management | Reporting
Distribution Management | Pricing | Competition | Business Development
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FindingsYeeld Solutions identified the following challenges:
- Erratic pricing with no fixed room supplements
- Unfocused forecast methodology
- Limited inventory management planning
- Low co-ordination of RM decision making
- Ageing and over populated market segment structure
- Under-resourced reservations department with no formal SOP
- No qualification criteria for IDS partners
- Invalid competitor set selection
Recommendations
The recommendations were split into 3 phases, over a 12 month timeframe, with the option for the hotel to implement these independently or with Yeeld Solutions support. Yeeld Solutions was retained, intensively over the first 6 months and for strategic support during the next 6 months.
Immediate Corrections (Months 1-2)Revised Market & Channel Segment structures | Training on pricing, inventory mgt & forecast mgt | Updated SOP for Reservation Telephone Sales | Mystery Shopping of Reservation Telephone Sales
New Revenue Management Infrastructure (Months 3-6)Creation of a centralised Business Development Department with new SOP and daily/weekly checklists | Updated daily, weekly, monthly RM reporting tools | Competitor Set Benchmarking| Dormant corporate account sales activities
Long term business development planning (Months 6-12)Consolidation period for new department | Website analytics & conversion rates | Creation of a Dynamic Pricing Matrix | Market Mix conversion from Operators to Groups for base business | Consumer & Trade PR and marketing activity
Results
Over the course of the 12 months of consultancy, the hotel achieved:
- 6% increase in occupancy
- 5% increase in ADR
The hotel increased revenue year on year by EUR 600,000 - ten times its investment over the 12 months in additional revenue management & distribution resources.
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