- Lack of revenue management knowledge and practices
- Pricing structure wasn’t clearly defined
- ADR increase up to 15%
- Fully automated pricing decisions deliver more precise forecasts and optimal rates
SBM (Société des Bains de Mer) is a casino and luxury hotel group with more than 150 years of history in Monaco encompassing four properties that include four and five-star hotels. For more than 12 years, Benjamin Caprini has been the revenue manager for the hotel group. The hotels using IDeaS today include The Hôtel de Paris Monte-Carlo, The Hôtel Hermitage Monte-Carlo, and The Monte-Carlo Bay Hotel & Resort.
Managing Change in an Ever-Changing Post-Pandemic Environment
The changes in management structure are becoming a common occurrence as hotels begin the journey through recovery. Combining the group’s revenue management and overall innovation as it relates to technology is paramount. When the hotel group was looking at revenue management solutions a few years ago, there were discussions about a number of solutions among the different hotels. The changing landscape and downturn in recent years made it clear that they would need to pull the individual teams together to better optimize their revenue strategy from a global perspective. The entire collective now confer with one another, regardless of the solution. Caprini noted that today there is global input from the user perspective from F&B (food & beverage) to spa services.
“Every day is different, and the challenges continue to evolve,” said Caprini. “The pandemic has forced various teams to work more closely together. For instance, when we want to change something, we need to do so as a cohesive group, versus making individual property decisions. It is nice to work like this as we have a clearer strategy on how best to optimize our profitability.”
Using a Score Card to Select a Winner
In 2017, a new director joined the group and made the decision to move forward with significant new technology changes, and Caprini began investigating various revenue solutions with the help of a consultant. A shortlist was compiled – it contained four of the top international RMS (revenue management system) vendors, including IDeaS. To ensure they all were judged fairly, Caprini and his team created a scorecard with different key elements for the systems, including reporting, forecast pricing, room type optimization, and other elements that mattered to each property.
The group implemented a fully transparent RFP (request for proposal) process that included a shortlist of all the required elements. They provided a two-month window that allowed each competitor to provide presentations and conduct meetings with their group. The competitor that was able to do the best would be the winner.
“At the end of the day, we knew that IDeaS was the best,” said Caprini. “One critical factor was the technical implementation of the software. We needed to consider how the system would affect our current architecture and the future scalability of the tech stack. IDeaS came up as the leader for seamless integration with the rest of the stack – now and in the future, regardless of changes that would need to be made as the business grows.”
It’s really important to have an RMS, and it’s a common misconception that only big chains use it – on the contrary, independent hotels can greatly benefit from it.
As the team implemented IDeaS G3 RMS, they began to see ongoing results. While the system (and the team) continues to learn, there is an opportunity to watch, trust and then verify.
Pricing configuration was key for the SBM properties. Before automation, they had the ability to make comparisons and quickly change prices. What they discovered was that while they could do things fairly quickly, the RMS was faster and more automated than they could have hoped, and the pricing decisions made by the system drove incremental revenue increase, day after day. The analysis showed that their pricing decisions are now fully automated, and the revenue team are able to create more precise forecasts and better optimize rates.
“I tell my team that it’s important to understand that RMS is not only about the rates and changing prices – it’s a multi-function tool that does a variety of things: forecasting, pricing, reporting, channel distribution… We were doing our own forecasting, but now when we compare that to what IDeaS RMS can do in forecasting and pricing decisions, we can see tremendous speed and ongoing results. We have positive results not only from a pickup standpoint, but we have also seen an increase in ADR (average daily rate) by as much as 15 percent for some of the properties in the high season,” said Caprini.
Caprini noted that hotels that are not using a revenue management system should take a hard look at getting one. “It’s really important to have an RMS, and it’s a common misconception that only big chains use it – on the contrary, independent hotels can greatly benefit from it. Because of my experience with IDeaS, I would say choose IDeaS. Our entire team is happy with the system and with the ongoing support. Our experience has been really good. We have learned that the system is not just about pricing, it is also about forecasting, reporting, and channel management. IDeaS’ G3 RMS is a multifunctional tool and that makes it a really important tool for hoteliers to have.”