14 april 2014

As we pointed out in one of our previous articles, revenue management applies not only in city hotels but also in ressorts. We have expanded our summer sun hotel portfolio with a beachfront hotel in the Costa Dorada of Spain. The 3 star Hotel Kursaal in Calafell is being prepared for a stark turnaround. Revenues and yield will be optimized to the maximum in this hotel.

The Hotel Kursaal de Calafell is a great addition to our portfolio. This 3 star property is well maintained and offers spectacular views of the Mediterranean right from the many private balcony. The hotel is located right on the Paseo Maritim, a pedestrian only boulevard, allowing you to walk straight onto the beautiful beaches of the Costa Dorada. It clearly has a lot of potential.

As always the question is, how do we turn around a hotel? Well first of all, we are working with a team of seasoned experts. They know what to do and how to execute. Essential of course is to differentiate priorities from actions with a marginal impact on results. We can come up with many ideas, but which ones really make the most money.
Our hotel turnaround methodology is based on the 20/80 rule. We constantly ask ourselves which 20% of the ideas will bring us 80% of the results. We are always looking to identify the next 20% of actions, before getting bogged down with time consuming work which might only lead to a 1% variance. Its essential to step back and look at the big picture to continuously get ROI on your time.

Where are we focussing for this property? To be able to drive incremental revenue we need to be able to offer multiple rate levels, and have consumers upsell themselves. This is especially important in markets that have seasonal compression. So we are looking at ways to tangibly differentiate the product. Tangible differentiators have the preference over artificial discriminating ones (rate fences like early bird, non-refundable, mlos) as consumers are more susceptive to them. They simply understand it better.

We have already identified that we can increase the room types from 2 to 3 due to the layout and orientation of the building. There is clear, although small, difference within the sea view room category. Now we are working on optimizing the descriptions of the hotels and room types. We have to make sure they attractive and complete. In the end in the online age all we sell are images and descriptions. So they better be perfect, and outshine those of the competition. Many hotels do a poor job on this, not really pointing out the USPs (unique selling points) of their property.

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Step 2 is the distribution landscape. We are analysing the channel production mix to make sure all existing are contributing effectively to the bottom line for the pre-, peak- and after-season. We will need to avoid revenue displacement during high demand dates by low rated business. Dilution by wholesalers floating FIT and package rates on a standalone basis through proxy-OTA have a very negative effect on financial results.

Step 3, direct sales needs to be safeguarded and protected. The booking engine process will need to be streamlined and the website optimized. We will start launching PPC campaigns to reduce cannibalization by third party websites, as well as remarketing campaigns to improve conversion. And the entire website will get a bit of a makeover as well.

Step 4, reputation management is a know key driver to success. We will be actively working on improving service and obtaining more online guest feedback. We have developed some simple proven action steps to effectively drive the online reputation if hotels.

As you can see we have a comprehensive plan of attack to turnaround the Hotel Kursaal in Calafell. It is a very nice property, with good potential. We are excited to have added the hotel to our portfolio.

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