With May drawing to a close, it finished the first full year I have been working as a hotel consultant with one client. Normally, I like doing year-end reviews with the calendar year, but in this case I thought it would be better to do an annual review coinciding with when I started.[1] Without giving too much detail, the hotel is a small boutique hotel operating in a city with a strong corporate culture year-round, but also a very busy high season.
Reviews almost always start with the results, whether positive or negative, so here is the graph showing the revenue changes from Year-to-Year:

And ADR change:

Overall, revenue has been up 6.4%, ADR has been up 5.9%. I’m pleased with the result, but know there are improvements to be made. I was rather disappointed in how November and December performed, and really disappointed in April. November-January are historically the worst months of the year, so I was going into the months with the aim to at least match the year before. I will get into detail later about the problems I faced with those months in a bit.

If I take out the three down months, the revenues increased 9.2%, which shows how disappointing those three months truly are.

The Challenge

Looking over the information I had at hand, I knew the hotel was underperforming. The hotel was entering its second full year of operation, revenues were climbing as it gained traction with the community and businesses, but the ADRs regressed significantly. When I looked at the first four months of 2011 and compared to 2010, the revenues were up, but the ADRs were virtually unchanged. The other hotels in the market were increasing their rates, leaving the hotel towards the bottom of the price scale even though the quality of the rooms should have pushed them to the top.

The first report I sent the owner pointed this out and suggested rate increases for the upcoming summer season, as well as differentiating the room rates further (a double queen room was priced the same as a king room, some had a balcony others did not, etc.) The initial response was very resistant to the change because they were concerned about pricing themselves out of the market and wanted me to do more research.

Upon meeting the Front Desk staff, they showed the same resistance, but ultimately, they listened to my suggestions and we made the rate increases occur. Unfortunately, it happened nearly a month into the high season after a good portion of the rooms had already been reserved.

Further complicating matters was a company contract that had a very low rate, meaning it would be difficult to meet the owner’s goals. It was only in place for 2011, but it was a tough contract to work with. The company made a switch at the last minute saying their crews would be checking out late (5 PM), but there was a policy in the contract stipulating that they would not be responsible for any other fees beyond the general room price and tax. The result was lost revenue from a lack of late checkout fee, higher housekeeping costs since the team had to stay late on those days, plus the guests wanting to check in had to wait. Of course, most demanded drinks, meals, lower room rates, which increased the costs further.

I also started the process of investigating into a new Central Reservation System (CRS). The previous CRS was not faring too well. The majority of the bookings were coming from Expedia, with no functionality to easily close off that channel while keeping the main booking engine alive. There was no way to create negotiated company rates, have promo codes, etc. It was very basic, served its purpose when the hotel was just starting out, but they required a more robust solution.

The company I went with was InnLink. There were four factors that helped push me in their direction:

1. The startup costs were minuscule in comparison to SynXis and TravelClick.
2. The layout of the booking engine was exceptional in my opinion compared to most hotel booking sites.
3. The backend was easy to navigate and offered a lot of flexibility to control what I needed to control.
4. It interfaced with the hotel’s PMS, which no additional fees to set it up.

The switch worked wonderfully, and the new CRS has been producing over 20% of the hotel’s revenues. The percentage is even higher in the off-season, which is when the hotel needs the bookings the most. The ADRs have been exceptional, as well. Even taken into account the bookings coming from Expedia and other OTAs, the ADRs are outperforming the hotel staff. If you are interested in learning more about InnLink, get in touch with the sales rep I link to on the Resources Page.

Another challenge faced was learning a new PMS, roomMaster 2000. Apart from learning the basics of the system, it’s always interesting to me to discover the hidden functions that make doing things easier, or finding ways to change the rates automatically to make the staff’s life easier. After I attended the InnQuest’s user conference to learn about roomMaster 2000 version 15, I ended up learning even more about the system that is currently in use. So after using it for one summer, I learned about things that I could put into place more effectively this year, and have learned even more to implement into the plan in the coming year.

Changes Made

There are quite a few things that were changed that are impossible to track completely, but here’s a short list of actions I initiated:

1. New rate structure with higher rates overall (RACK, Corporate, Government)
2. New CRS to increase hotel exposure and capture higher paying guests
3. Tweaks to roomMaster 2000 to improve how the agents take bookings.
4. Tweaks to the website to improve search rankings, with plans to release new website after the summer.
5. Formalize contracts with companies with negotiated rates, have one controlled source for rates instead of multiple people.
6. Slowly increase advertising expenditures in smart ways (targeted magazines, ads on certain community radio stations).
7. Implement guest satisfaction survey that is automatically sent to guests after a stay.
8. Track revenues for pace reports.
9. Create and implement marketing plan for longterm growth
10. Smart negotiation with companies.

The last point has been an important one. As previously mentioned, the one company made a switch at the last second which cost the hotel dearly in terms of guest satisfaction, as well as lower rates overall. When the contract came up for re-negotiation in the fall, I was put in charge of it. Here is what happened:

• Agreed to rate increase of nearly 10%
• Agreed to late fee worth 70% of room rate
• Agreed to firm deadline for room schedule, addition/subtraction

With the late fee factored in, their room rates effectively increased by 82%.

Other company contracts were renewed for higher rates, and new ones were won with competitive rates without completely sandbagging them in comparison to the competition. Being competitive with these RFPs for corporate rates can be tricky, but the hotel is coming out on the winning end more often than not now.

What Went Wrong

A few things happened over the year which did not help the hotel’s cause. The big thing is how often staff turns over there. There is a constant cycle of the supervisor working overtime, getting on the verge of burn out before someone new is hired, trained, and then just when it seems like everything is back to normal, someone else decides to switch jobs. It gets tiring going over the same things with new people, but it’s a part of doing business in that community.

The other thing that went wrong is instead of staying true to my policies, I went in favour of what some of the staff had suggested for the rate structure in the off-season. The bookings had slowed down in November, and they suggested a drop in rate would help draw people in. The occupancy didn’t increase by much, but the ADR dropped significantly, causing the revenues to slide down. I learned from this, however, and when the bookings for April looked slower, I didn’t waver too much from what I was doing. The ADR increased from the year before, minimizing the losses. This off-season, the hotel will be much better prepared to make sure there are no drop-offs.

The other major issue was a la
ck of a sales team for the property. A sales office outside of the city is effective for attending conferences and meeting with companies who are based outside of the hotel’s city, but they make it extremely difficult to build rapport with the local community. This is an area where I trusted people would pick up the slack and help sell the hotel, but ultimately it fell on my shoulders and I was unprepared to manage a campaign effectively. Plans are being developed for a more effective campaign this year, which should increase our revenues in the off-season.

2012 Projections

Based upon the value of the company contracts, this year is going to be excellent in terms of revenue and ADR growth. Even with the slip-up in April, the summer season is looking to increase by 10%. The company contracts bleed over into the off-season, which will help that revenue base. The off-season should increase by at least 10% itself, with the overall increase being between 12–16%.

Things to look forward to:

• New website with improved SEO
• Better yield management strategies with roomMaster 2000
• An effective advertising campaign through the year.
• Reliable, loyal, well-trained staff.
• Stronger social media presence.

1. I actually started in early April, but didn’t meet with the hotel staff until the first week of May, which is why I am choosing May 1st as a start date.  

The post Year-End Review: Boutique Hotel appeared first on Four Sides Hospitality Consulting | Hotel and Airbnb Consultant | Canada.

Please note that I am only a hotel consultant and cannot assist you with issues with virtual cards or cancellations, etc. Read below for the appropriate channel to contact.

Using Expedia as a channel for revenues remains important and not a site that can easily be ignored. I am finding with the properties that I work with that it accounts for a good 20% of the overall online bookings. Finding support on how exactly to maximize revenues through Expedia is difficult to find online, however. I thought it would be useful to have a series of posts outlining some of the important details on how to get started with Expedia, and how to take full control of your offerings on the site to ensure you do not lose out.

Partnering with Expedia

Signing up with Expedia is signing up for multiple sites all at once. You enroll into Expedia.com, hotels.com, and venere.com. The first two sites are heavily promoted on television and online. Venere.com is not as heavily marketed, and is not supported by a lot of the CRS companies, either. It appears properties have to enroll with Expedia directly in order to appear in the search results for Venere.com.

To get started, the process is quite simple. You can either get in touch with your account manager for your CRS (if you have one) or visit their website, JoinExpedia.com.

The process is a bit lengthy, so do set some time aside to fill in all the information properly. This is a process that can not be completed in five minutes. Alternatively, you can have someone from Expedia contact you, but you will either have to fill out the information on paper and fax it back to them, or tell them over the phone. Filling out the form online is much simpler and quicker, in my opinion.

After all the paperwork is filled out, you will still need to sign a contract to get started with them. A short time period after the contract has been signed and sent in, your account manager will get in touch with you to show off your hotel property on the site. Then it is up to you to close off inventory for sold out dates, change rates for special occasions, and watch the reservations show up.

Do be aware of the different options in receiving reservations from Expedia. You can either receive the reservation information through fax, or through their Expedia QuickConnect which sends the reservation directly to your CRS. The QuickConnect will mostly have an additional fee of $2.00 or so per reservation for transmitting the information down to your Property Management System.

Contact Numbers for Expedia Hotel Support

When your property is live, and you have problems with bookings or need to close off inventory when the power is out, the best way to get a hold of someone at Expedia is by phone or fax. This information is tedious to search for online, and is not easily discovered in the Hotel Extranet for Expedia. You can find it by running a Rooming List Report, for example, but who wants to run a report just to get the contact number?

I have pulled it out for everyone’s convenience to pass around to Front Desk Agents or others who may need it in times of need.

Expedia Support: 

888-397-1786

Fax: (702)  939-2697

For non-North American properties, visit their main page which lists the whole range of numbers:

Expedia Support

Expedia Market Management

Email: mm@expedia.com

Phone: (888) 663-9733

Use the Support line to get assistance about closing off inventory or details about a reservation that need to be re-sent. Market Management is great for increasing exposure of your property in the listings (having Expedia Special Rates, for example).If you have any questions about partnering with Expedia,

The post How to Get Started with Expedia as a Hotel and Phone Support Numbers appeared first on Four Sides Hospitality Consulting | Hotel and Airbnb Consultant | Canada.