The boutique hotel had a successful 2014 and everything was looking good for 2015. 2013 had been a disappointment, so 2014 only needed a few minor changes to right the ship, with the goal of surpassing the record year of 2012. 2014 beat the pants off 2013, but was only a (respectable) 1.5% growth over 2012. For 2015, the goals were more ambitious: doubling the revenue growth compared to 2012 and aim for 5% growth over 2014.

In short, the hotel succeeded in the first goal, and came real close with the second. This is a look at what was implemented at the hotel to cause the growth.

Rate Strategy

To build revenue, a property either needs to increase the occupancy with a room rate similar or greater than the previous year, or it needs to increase the room rate with an occupancy level similar or greater than the previous year. With this hotel, I noticed that the ADR had dropped off from 2013 by around 2%, occupancy had risen close to 6%. Increasing the occupancy was going to be more difficult because this hotel was nearly sold out for the summer months, so more focus was put on increasing the ADR and maintaining the occupancy, at the very least.

Rather than staying with the same rates for 2014 and focusing on eliminating the lower rate channels, I decided to apply better yield tactics year-round, instead of only in our peak season, and increase our base rates across the board. The only exception to this rule was our rate for locals, which account for one of the largest segments for this hotel and also tended to eat more in the restaurant than others.

Using the pickup report, I was able to develop a better plan of when to be yielding, regardless of the number of rooms on the books. For example, I could determine that May was the busiest month for reservations in July-September, so I increased the summer rates for those months in May. I could also tell that the lead time of reservations for October-December was less than 30 days. Meaning, when I looked at the forecast for 2015 in June and saw little on the books for the final three months, I did not panic and drop room rates, overly promote, etc.

After going through 2014, I realized that my pickup form was too basic. I took the time to redevelop it to use in 2015, and I am fairly confident that the data collected will pay off. The key difference between the pickup form used in 2015 (and now 2016) and the one from previous years is that the form allows you to collect data daily for the month. This will allow me to yield even more precisely this year: instead of boosting rates for a month in advance, I can raise/lower rates in more specific lead times and do a better job of predicting walk-in demand.

I am so confident in people using this pickup form, that I will put it on sale for this month.

OTAs: Expedia, Booking.com, etc

OTAs are going to be a constant challenge for hotels. I previously wrote about how hotels need to take ownership of their guests in order to cut down on the amount of commissions you lose each year. It is something that will be worked on more for 2016, but for 2015, I decided to squeeze what I could out of them without hurting the overall revenues. This meant yielding the channels much more closely, and closing them off much more aggressively.

Overall, the strategy worked. Expedia and Booking.com are the two largest providers of revenue and dwarf the others, so I will focus on them. Between them both, revenues grew by a small percentage, but- this is the key – only in the softer months of the year. Looking at the total numbers for the year, they almost negated each other (i.e. July, August, September were up for Expedia, but were down the same amount for Booking.com.) When looking at January, for example, Expedia was down, but Booking.com increased dramatically to makeup the difference and then some.

Instead of using the OTAs as filler for last-minute rooms, I use them to create a base level of revenues for the hotel, like most would do with group tours or convention blocks. They may provide a lesser rate than if a guest booked directly at the hotel, but I compensate for the loss by increasing our other rates for last minute guests. I estimate the allotment I will receive from the OTAs using their reports and build my other rates accordingly.

The result is a net positive for the hotel: revenues and ADR increase; OTAs receive their allotments to keep them happy.

Another change that I was able to implement was tighter integration between Booking.com and our CRS, InnLink. Inventory between the hotel’s PMS and InnLink is synchronized constantly through the day, closing out room types for web bookings or GDS bookings automatically. Before 2015, that synchronization was not available for the OTAs. They released that feature for Booking.com, which meant less management for me. Previously, I had to keep adding rooms to inventory at Booking.com as needed when a room type ran out. For 2015, I was able to leave it wide open and then close off as needed. In previous years, I would close off it off a few days prior to an arrival date just in case the front desk staff sold the remaining rooms quickly. I did not want to be left with an overbooked hotel. This feature worked extremely well for 2015.

Yield Management

All yield management happened manually, up until September. Before September, I was watching the availability, adjusting rates for periods of stronger demand, closing out the OTAs, etc. In late August, InnQuest was offering an upgrade to unlock their yield management tools at a discounted price. It was too good of an opportunity to pass up.

The yield management controls are based on availability. You set various parameters so that when the hotel reaches certain thresholds, rates adjust upwards. Conversely, you can set discounted rates for people booking the first few rooms automatically. There are other controls available in roomMaster: ignore yielding over long-term stays, people who book x amount of days in advance, minimum amount of yielding, and more. Yielding can apply to all rates or specific ones, and can include meeting rooms.

It’s a great feature and worth looking to see whether your current PMS offers that functionality.

TACS: Travel Agency Commission Settlement

Dealing with travel agency commissions are always a pain, especially if you use a CRS to handle GDS bookings. Multiple faxed statements for commissions, manually punching in the reservation numbers, and constantly having to double check whether that commission had been paid previously or not. TACS is a service that eliminates a lot of those hassles.

There are two parts to it. The first part is that all relevant reservation data is uploaded automatically by the CRS (meaning only GDS reservations, not direct web bookings). When you log in to TACS to look at the commissionable reservations, all the information is there for you to look at and adjust: name, stay dates, rate, confirmation number, commission due, etc. Reservations still need to be confirmed, but it goes quickly. Copy and paste of the reservation number into the PMS and you’re done. Confirm all the commissions, submit, and payment is sent to each agency for you automatically. The hotel has the amount taken off a credit card or withdrawn from a bank account.

The second part to the system is likely the most useful. It is a full history of all the commissions paid that is searchable by agency name, guest name, arrival date, or confirmation number. You can pull up a list of your top agencies, look up previous statements, and more. It gives you a quick tool to confirm that yes, payment has been sent out and the date the payment was issued. It saves a lot of time and no double payment mistakes.

How does this apply to increasing the revenues? When travel agents look up the available hotels in the GDS, your property gets highlighted as being a partner in the program. It gives them an assurance that commissions will be paid for on time, automatically, without them having to send invoices to the hotel. Travel agents are more likely to book your property, and then those guests help spread the good word when they’re talking to their other colleagues in the office.

The best part is the service is not that expensive and should be available for all major central reservation systems.

Hotel Amenities

There were a few minor and a few major additions to the hotel that helped us propel the occupancy higher.

The major upgrades took place with the purchase of Samsung 48” LED TVs. The hotel had plasma TVs before, the only hotel in the city with them, and now as other hotels are upgrading to flat-screens (finally), our hotel is staying ahead with the LED TVs. They look fantastic, and they’re priced under $400 right now. We had the wall mounts previously, so the effort involved with installing them was not too difficult. A great upgrade that did not cost a fortune.

To go along with new TVs, the hotel upgraded their cable service to receive set top boxes with HD channels being offered. A good TV should have the best quality content available for it. It was an easy decision to make, and, again, not a big cost involved.

Another upgrade dealt with our internet service. The hotel was able to upgrade to a fibre-optic connection to increase our speeds and bandwidth. The service upgrade was not that expensive. The more costly venture involved upgrading our WiFi routers to take advantage of the new speeds. We purchased Meraki Access Points, which allowed for them to be controlled through a central dashboard on the local network, but also because it allowed us to setup tiered WiFi solutions. The hotel offers a basic connection, a premium paid-for connection, and then the premium connection without a fee for our regular or VIP guests. The basic connection allowed for the usual internet browsing and basic gaming. The premium connection was designed for people that needed to do Skype conference calls or wanted to stream Netflix at night. The cost for the premium connection was minimal enough to encourage people to purchase it. The hotel basically recovered the costs of a few of the access points in the first year of having them- not a major revenue source for this small boutique hotel, but a worthwhile one in the end.

The final upgrades had nothing to do with the physical property. The hotel is too small to have a fitness centre be installed. Instead, we approached one of the gyms in the city and created a partnership with them. The only cost for us was a few free nights in our suites each year, and in exchange the guests had full access of their facility for free. The other change was an upgrade in our airport shuttle service. We switched companies to one that had newer vehicles and a more reliable service. The costs were the same, but service better, which made it a worthwhile switch.

Looking Ahead

For 2016, I will be applying a lot of the same revenue management strategies as I did for 2015 but in a more focused manner. Based on the information found in the pickup report, I will be able to develop a game-plan for the year well in advance. Rates will be adjusting for certain periods weeks or months in advance with the goal being to slowly fill up the hotel instead of have it reach 100% as soon as possible.

Marketing-wise, we launched a new guest loyalty program for the hotel. Punch card rewards and a tiered membership plan with benefits to give us a further edge over the competition. The only other reward programs in the city involve Air Miles with no direct recognition of guests staying 20 times through the year. Our marketing push at the end of last year has brought several inquiries from guests who stayed with us before but switched to other hotels. The hope is to build stronger guest loyalty with the guests we have and give better incentives for others to switch. Tough to say how well this will turn out right now. The cost of the program was only around $20 a month, far cheaper than the AirMile programs.

The only other addition to the hotel that we are starting to market is a digital subscription to the NY Times. Currently, people viewing their website are limited to ten articles a month. With the subscription, anyone viewing the site through the hotel’s WiFi connection will be given unlimited access to the site. Given that the hotel is in Canada, we are not positive how much this will be used. Again, a minor cost experiment of around $20 a month.

Looking at their revenue forecasts for the upcoming year, every month is ahead by at least a 10% margin compared to the same forecast a year ago. A very promising year. Hopefully this time next year, my update on this boutique hotel will give even better results than 2015.

Suggested Reading

From Four Sides Hospitality

• Case Study: Boutique Hotel – introductory post about the hotel.
• Year 1 Review: Boutique Hotel
• Hotel Loyalty Program – an overview of the loyalty program Flok and how it applies to hotels.
• Owning Your Guest – strategies to encourage people to book directly with the hotel.

Elsewhere

• 7 Pricing Mistakes – Duetto
• Understanding the Basics of Revenue Management
• Revenue Management for the Hospitality Industry

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

[First post of a series: New Year, New Hotel]
Towards the end of the year, I sent out a thank you letter to all the guests who have stayed at the hotel and wishing them happy holidays. It sounds like a daunting challenge:

1. How do I collect all those email addresses from the property management system?
2. Where do I import the addresses to?
3. Do I send a plain email or something fancier?

Thankfully, this is not a difficult task and takes maybe an hour of your time to complete from start to finish. Below are instructions with roomMaster 2000. The process will likely be similar with other PMS software. Once you have the data file with email addresses, the steps will be the same.

Exporting Email Addresses from roomMaster

The first step is to collect the email addresses. roomMaster makes this very simple using a query service.

BACK OFFICE Menu –> Guest Profile Email Export

You have five options now.
1. File name (I keep it the default)
2. Export Type (CSV)
3. Only Certain Records (to collect email addresses from people who stayed in 2013, or other time period)
4. EasyMail (collects first and last names, company name, etc)
5. Open File (a quick view to make sure there is data in there)

Hit Extract and we go into the query window. If we had left “Only Certain Records” unchecked, we would receive all the email addresses from the very first night audit.

In the next window, we want to Insert a new query.

Scroll down until you see the Last Checkin Date and Last Checkout Date. We are going to tell it to pull all the email addresses from 01/01/2013 to 12/31/2013. We could leave it open so it collects only the stays from 01/01/2013 forward, but you are likely to have a few guests who stayed this past week mixed in. Might seem weird to receive an email stating, “Thank you for staying in 2013,” when you checked in during 2014.

Next, we use the query wizard to get the email addresses we would like to pull out. There are a lot of options here, but I am keeping it simple. Some other queries that could be useful: anyone with a company name or used a direct bill account, anyone who had used a certain rate code, everyone who lives within your state/province, and so forth. The information pulled out is only useful if the Front Desk agents have been entering it often. Something to keep in mind for this year’s and future years of operation.

Once you have your query entered, you hit Finish, save the query for future reference (Stays in 2013), and then hit Extract. Depending on how large of a database you have, this process could take only a few seconds. You should receive a pop-up window with a string of email addresses, commas and other items entered between “ ” marks. If you did, great, if not, you will have to double check the query to see what went wrong.

In the pop-up window, go under FILE and Save As to save the file to your desktop (or other location). If you choose not to have the file open up right away, the file is downloaded to the roomMaster folder (in this case, it’s E:/DATA/roomMaster). From here, you will want to email/transfer the data file to a computer for you to work on so you don’t tie up a workstation at the front desk.

MailChimp

MailChimp is a mass email service that operates online. It’s quite powerful to use and many companies with huge client bases use it on a regular basis (i.e. all those promotional emails about sales at Amazon The service is also free, up to 2,000 subscribers or 12,000 emails send per month. If you are a large hotel, you will have to choose from either a paid option or segment your guests and only send emails to a select bunch. One option, send the emails monthly, but delete the mailing list before you send out the next batch. Keeps you in the free program, while reaching out to your guests.

The email templates can also be incredibly fancy or simple. For this example, I am going to stick to simple. The next steps are going to assume you have signed up for the service and are on the main page.

Create the List

Left-hand side of the screen is the menu bar. Below Campaign is Lists. Select it, and then in the top-right of the screen, select Create List. Choose a New List for now.

Go through and fill in the fields: List Name (i.e. hotel name), From Name, From Email (where any responses will go), and so forth. At the bottom, I would suggest a Daily Summary to show how many opened the email, unsubscribed, or subscribed.

Once you have created the list, now it’s time to import the email addresses.

In the list view, at the far right of your list name is a dropdown menu (Stats then the arrow). Click the arrow, and then go to Import.

Click Upload from CSV
Find your file and start the process to import the records.

In the next screen, we get to tell MailChimp what the data is. Email address is going to be the first column, first name likely the next, and last name. The last columns will be the stay information. Click skip on the columns that aren’t going to be mentioned again (blank ones, stay information mainly.) For the others, click Edit and select the appropriate field.

Click Import and now you have a list of subscribers to communicate with.

Campaigns

Select Campaigns in the menu on the left, and then Create Campaign at the top right.

In the next screen, I select A/B split campaign. This allows you to setup two different subject lines to see which is more effective. MailChimp will send out emails with each subject line to 15–20% of the list. Whichever subject line is more effective will be the subject line for the remaining members of the list. Gives you are higher chance of success with the campaign.

Next screen, you will select the list you are going to use, name the campaign, create your subject lines,

With the Templates, you can either design your own or use one they have already designed for you. I selected the Basic design in the Predesigned section to keep it simple.

The editor is quite nifty. Whenever you hover over a section, you get a little pop-up to change it. Change will bring up an editor (or different window if you are changing an image). The editor is pretty self-explanatory, but there is one thing I would like to point out.

With merge tags, you can bring in some information about your subscribers and make it more personal. For example, I could enter:
Hello, *|FNAME|**|LNAME|*

and get

Hello, James McCullough

There are other options in there, like links to share on Facebook, the date, and even ask a quick poll.

The image editor is also quite powerful. You can crop images, resize them, add effects, and so forth. Too much for me to cover in one post. Do keep images to a minimum though.

Once you have the design done, and text entered, the next part is to send it. If you click through the Plain-Text section (for people who aren’t viewing it as HTML with the graphics and formatting), you get the last screen to confirm all the details again.

At the very bottom, there is a Send button and also a Schedule button.

Select Schedule, and you get to enter the time and date for when that email is going to be sent. Pay special attention to the time zone for sending the email. The email won’t be as effective if it’s sent in the middle of the night for your time zone.

Once the email has been sent, you can log into MailChimp and see the activity, and even a full report. The report will tell you whether people are clicking on the links found in your email (to your hotel booking page, for example), what the links were, and even the time people opened the emails. Don’t be alarmed when you only see a small percentage of people opening up the emails, either. Open percentages are generally quite small, not even 50%.

In the campaign I sent the week before Christmas, it was sent to 1,100 people. 400 of them opened the email (39%). 16 of them clicked on a link (1.5%). The best time the email was read was 1 PM. The crazy thing is that nearly 100 people were still opening the email two weeks after I sent it. An indicator of how infrequent people look at their email during the holiday season.

I hope this mini-tutorial on how to export the email addresses and create a mailing list has been of interest to you. I would love to help you out in creating your mail campaigns (MailChimp has multi-user support), brainstorming ideas on how to use your list and segment it to send emails to specific groups, or assisting in exporting the data from your PMS.

If you would like assistance with setting up your campaign, contact me.

The post New Year, New Hotel: MailChimp Campaign from roomMaster data appeared first on Four Sides Hospitality Consulting | Hotel and Airbnb Consultant | Canada.