Improving Positioning & Pricing Strategies
Established in 1965, and located in leafy Kensington, the Royal Garden Hotel has royal neighbors and rock star clients – and a worldwide reputation for some of the best views in the city. The Royal Garden offers guests 394 rooms, 17 suites and 10 function rooms. The Mayfair and Knightsbridge shopping destinations are close by, with several major London attractions merely minutes away.
This idyllic location is, however, crowded with competitive hotels – and maximizing the opportunities to attract the right customer at the right price is a key objective for the Royal Garden’s revenue management team. Specifically, the hotel was looking to achieve growth in its Average Daily Rate (ADR) for transient business.
The challenge facing the Royal Garden was identifying its most appropriate target competition from among the thousands of London hotels to develop a robust pricing strategy.
“Having partnered with IDeaS since 2007 and using its highly advanced IDeaS Revenue Management System, the Royal Garden has developed a healthy respect for IDeaS’ revenue management expertise,” explained Matthew Burbidge-Airs. “When comparing the depth and breadth of IDeaS’ global revenue & pricing resources with other providers and consultants, it was an obvious choice to select the IDeaS Advisory Services team.”
The IDeaS Pricing Analytics & Market Positioning service combines together a hotel’s own and third party data with IDeaS market segmentation models to provide them with the best available benchmarks to develop strategic positioning and pricing.
By identifying the critical competitors and reviewing each one against customer review scores, IDeaS has helped the Royal Garden Hotel in three key areas:
- Assisted in creating an optimal Best Available Rate (BAR) spectrum to maximize ADR
- Provided the hotel with market segmentation recommendations on how to achieve an optimal strategic business mix
- Supported the hotel’s revenue management team in fully exploiting available market intelligence (rate shopping, bench-marking and online reputation data) to complement revenue management strategies and tactics to establish maximum market share potential
The Royal Garden Hotel asked IDeaS Advisory Services to enhance its use of analytics to determine where the optimum customer value resides, and used that analysis as an effective platform for pricing decisions. The hotel wanted better statistical business analytics to understand where they can increase profits using price and margin, and to gain insights into which customer relationships can be the most profitable. With IDeaS, the Royal Garden’s revenue management team was able to look at the transaction structure, behavioral segmentation and price optimization to appreciate the full value proposition for different groups of customers. IDeaS advisors created a process that facilitates granular data development and analysis to enable accurate and timely pricing decisions.
“IDeaS took the time to really understand our unique setup, which allowed them to make solid recommendations that are realistic and appropriate for our property,” said Burbidge-Airs. “I have no doubt that they will positively improve our revenue processes and performance going forward.”