Nesuto Hotels’ Revenue Surges with IDeaS G3 RMS

The Story

Daiwa Living Nesuto Group is a leading hotel and apartment operator in Australia and New Zealand. Nesuto’s 13 apartment-style properties are individually unique, with each providing a home away from home for guests. Located near central business districts, their properties allow you to experience cities like a local.

In the midst of the unprecedented challenges posed by the COVID-19 pandemic, Nesuto had to make some tough decisions. They chose to uninstall IDeaS G3 Revenue Management System (RMS) temporarily to cut costs, only to later reinstall it post-pandemic. Nikita Beresnev, Director of Commercial walks us through the strategic decisions made by Nesuto and how IDeaS G3 RMS played a pivotal role in their revenue management and decision-making process.

Bold Decisions and the G3 RMS Dilemma

During the initial wave of COVID-19, Nesuto took a bold stance. They decided not to lay off any employees and opted not to accept any quarantine business. Despite the challenging environment, Nesuto secured group business, which sustained them for nearly three years. However, with the hotel running consistently at full capacity, it led to the difficult decision to uninstall G3 RMS as a cost-saving measure.

Beresnev is well-acquainted with IDeaS solutions, with a combined 12 years of RMS and G3 RMS experience to his name. While he understood the unique circumstances surrounding this tough decision to temporarily suspend use of G3 RMS, he also knew the decision was going to have a substantial impact on the hotel’s day-to-day workload as the “invisible” automated work of G3 RMS came to the forefront. “Once we pulled it out, the workload increased significantly because everything had to be done manually,” recalls Beresnev.

“In the space of three months, we saw the average rate increase 30% which is similar to that of a 4 ½ star hotel. […] With G3 RMS, you can just sit back and enjoy all of the money coming in.”

Return to IDeaS G3 RMS

As COVID-19 restrictions eased, Nesuto decided to reintegrate an RMS into their operations. They conducted a Request for Proposal (RFP) process to compare IDeaS G3 RMS to other potential vendors. An alternate system was tested for nine months in the same hotels that previously used G3 RMS. At the end of the evaluation period, Nesuto decided to not proceed with the other vendor and returned to IDeaS G3 RMS for five properties. Beresnev knew that IDeaS G3 RMS would instantly consider the data and competitor rates and forecast accurately thus leading to desirable pricing, overbooking, and Last Room Value decisions.

For example, when Nesuto installed G3 RMS at their St. Martins property, they achieved rates they had never seen before. “In the space of three months, we saw the average rate increase 30% which is similar to that of a 4 ½ star hotel,” notes Beresnev.

Beresnev says he was excited to see the return of G3 RMS as it frees up time for his team and lead to a substantial long-term return on investment.

Regain Operational Excellence

Nesuto carefully considered various factors when selecting their RMS during the RFP process, and G3 RMS stood out due to its compelling features. First, G3 RMS’s dynamic pricing capabilities, which enable precise pricing adjustments at the room type level, were particularly appealing. Second, the system’s ability to incorporate competitor pricing data into its decision-making process was a significant factor. Finally, Nesuto was impressed by G3 RMS’s ability to gather and analyze data multiple times per day, ensuring real-time pricing optimization.

The team also found great value in utilizing the system’s alerts and notification capabilities which became integral to their operational processes. Additionally, the graphical representations in the system were appreciated as they added an easy glance at performance. Rather than viewing G3 RMS merely as a tool, the team adopted a collaborative mindset, treating the solution as an extension of their analytical capabilities. This involved using the system to validate forecasts and understand the underlying factors influencing decisions. Ultimately, this practice has helped Nesuto ensure optimal system configuration and performance long-term.

Market Dominance Unleashed

After re-installing G3 RMS, Nesuto properties saw immediate improvement in gaining market share, seeing double digits while competitors are seeing single digits. Since installing G3 RMS, the Mounts Bay property in Perth is running number one in year over year market share improvement, and of its competition, it’s now the highest performing property on weekends. G3 RMS helped achieve the highest rate growth of any competitors in their market.

Additionally, the Nesuto team achieved what they never thought they could through Last Room Value. When G3 RMS started to push LRV-based controls to create longer lengths of stay or yielding out lower rated business, their confidence in the system grew.

The integration of the forecasting, pricing, and investigative features, coupled with the additional benefit of drilling into decision-making, has proven to be a valuable asset for their properties.

The best part for Beresnev? “With G3 RMS, you can just sit back and enjoy all of the money coming in.”