- Tough market conditions
- Young revenue culture and processes
- Immediate results despite challenging climate
- Among five pilot hotels, all had increased revenue performance
- West Capital International Hotel saw revenue growth of 4.2%, and an RGI increase of 6.5%
An expanding hotel group in a dynamic marketplace
China has undisputedly become one of the most popular destinations for both business and leisure travelers. The influx of international visitors, coupled with the increase of domestic travelers, has been driving the growth of tourism especially the hospitality sector in China. International and domestic hotels—including both chains and individual properties—are extending the battlefront from gateway cities to second or third-tier ones.
Yet the seemingly ever-blooming hospitality market of China does encounter bumps in the road from time to time. For instance, as a result of the government’s policies of banning official extravagance in 2013, the catering business of many hotels has been seriously affected. Their room business also experienced some market turbulence due to growing competition. According to a market report of the China Hotel Association, from January to April 2013, Chinese hotels’ total revenue was down 16.43%, with a significant decrease in average occupancy and room rates from the year prior.
The IDeaS virtual Revenue Mentor service is one of the key reasons that we decided to work with them. Jin Jiang International Hotels has a full array of well regarded hotel product offerings. These combine with sound revenue management will enable our company to achieve remarkable performance. With the support of IDeaS, our company has been able to establish a robust revenue management culture. We have also gradually been developing a pool of revenue management executives. We look forward to strengthening our cooperation with IDeaS and keep on delivering results.
Jin Jiang International Hotel Management Company Ltd. (Jin Jiang International Hotels) is the largest domestic star rated hotel management company in China. It has 116 hotels offering some 37,000 guestrooms to 75 cities in China. Jin Jiang International Hotels has a portfolio of lodging brands covering segments from luxury, five-star and four-star business hotels to those targeting younger business travelers.
Jin Jiang International Hotels has been ambitiously expanding its network in China. To keep pace with this phenomenal growth, the company also looks for ways to fine-tune its operations and managerial know-how in pursuit of excellence. Revenue management is one of its top priorities.
IDeaS Revenue Solutions, the world’s leading provider of revenue management software and services, has been working with Jin Jiang International Hotels since 2012. The mandate from Jin Jiang International Hotels to IDeaS is to improve the pricing system and build a revenue management culture among its hotels.
In pursuit of revenue management excellence
In a bid to adopt a more intelligent and robust approach in revenue management in both the company and individual hotel levels, Jin Jiang International Hotels and IDeaS believe that the company should work on the following:
- Develop a strong team of revenue management talents.
- Build and strengthen a revenue management culture throughout the organisation.
- Encourage and facilitate its hotels to carry out revenue management based on automated data analyses.
For Jin Jiang International Hotels Group, IDeaS organised two revenue management workshops to build the revenue management culture across the company. Each of these two workshops consisted of seven modules: revenue management conception, market segmentation, pricing, revenue management forecasting, revenue management deployment, distribution channel and revenue management strategy. Senior executives across the organisation from revenue management, sales and marketing plus hotel general managers participated in the workshops.
IDeaS also conducted a thorough analysis on five selected hotels of Jin Jiang International Hotels and compiled an audit report with insights on how to improve their revenue management strategies. The report, aimed at uncovering improvement opportunities, provided a roadmap detailing a centralised, well-orchestrated execution plan for pursuing excellence in revenue management.
These five hotels are Jin Jiang Hotel Shanghai, Jin Jiang Tower Shanghai, Hotel Kunlun Beijing, Shanghai Galaxy Hotel, and West Capital International Hotel. Following IDeaS’ recommendations, they have also deployed IDeaS Revenue Mentor service to provide guidance in building a revenue management foundation from which sophisticated revenue strategies can be built upon.
Revenue Mentor was designed by IDeaS specifically for hotels confronted with a lack of internal revenue management resources. It enables hotels to quickly secure the support of an experienced revenue management consultant. This seasoned professional guides and helps execute a hotel’s revenue management strategy, training relevant employees along the way to ensure a deep revenue performance culture while maintaining the performance momentum of the hotels.
Delivering immediate results
Jin Jiang International Hotels acknowledged that the company has experienced a paradigm shift in revenue management after having worked with IDeaS. The company is now approaching revenue management with reference to data analysis instead of intuition or experience. According to the feedback survey of the two workshops, the participants buy into the revenue management concepts suggested by IDeaS and are committed to put them into practice.
In the past, Jin Jiang International Hotels set their weekday and weekend room rates according to experience. They have started to embrace the dynamic pricing approach based on occupancy status and market dynamics as recommended by IDeaS.
The five pilot hotels that have been using the IDeaS Revenue Mentor service have achieved immediate results amid the challenging market climate in 2013. Their revenue performances in the first 11 months of 2013 (compared with that of same period the year before) were as follows:
- West Capital International Hotel has a revenue growth of 4.2%, and RGI* increase 6.5%
- Jin Jiang Tower Shanghai has a revenue growth of 2.3%, RGI increase 5.65%.
- Jin Jiang Hotel Shanghai has a revenue growth of 3.4%, RGI increase 4.1%.
- Shanghai Galaxy Hotel has a revenue growth of 0.51%, RGI increase 8.9% (as of September 2013)
- Hotel Kunlun Beijing has a revenue growth of 3.3%.
A growing partnership
Building on the success so far, Jin Jiang International Hotels intends to expand its partnership with IDeaS to fully unleash the power of intelligent revenue management. These plans include:
- Jin Jiang Hua Ting Hotel & Towers and the Park Hotel are going to deploy IDeaS Revenue Mentor service
- On the company level, Jin Jiang is considering IDeaS Change Accelerator and IDeaS Revenue Architect.