Optimise revenue by room type in order to stay competitive in crowded London market
5% increase in ADR
The Mandeville Hotel is the perfect choice for business and leisure travellers seeking luxury within walking distance of one of London’s best shopping areas. Part of the Preferred Hotels group, the Mandeville’s 142 rooms and suites have been uniquely styled, offering guests an elegant and comforting stay.
Operating in a crowded and competitive market, the hotel’s management continues to invest in and leverage technology to optimise revenue performance and gain a competitive edge
The power of demand-based, room-type pricing
Looking for a more advanced system with the capability to yield by room type, the hotel decided to transition to IDeaS G3 Revenue Management System (IDeaS G3 RMS) in 2017 after experiencing success with another IDeaS platform over the previous three years.
“IDeaS RMS had worked very well, but at some point, we realised we needed to be able to yield by room type,” said Enrique Pacheco, revenue manager at the Mandeville Hotel. “We started investigating the market to find the best product, and we were shown IDeaS G3 RMS. For us, the choice was obvious.”
The new functionality allows Enrique to achieve a goal he’d previously only dreamt of—being able to boost the price for a particular room type without the rise being automatically applied to other categories.
“If IDeaS G3 RMS detects high demand in a certain room type—for example, with superior doubles—it will increase the price for that specific room type but leave deluxe rooms at the same rate,” said Pacheco. “This seems obvious because this is what yielding is about, but no other system offered this functionality.”
Since implementing the new system, the hotel has enjoyed significant gains in performance. Senior managers noticed an instant improvement in ADR of around three percent— and a year later, ADR across all room types had risen to five percent.
“The key contributor to the improvement is that we’re now yielding by room type,” said Pacheco. “We’re selling our different room types at the correct price.” However, Pacheco has faced some challenges along the way.
“I’ve occasionally had to explain some pricing decisions to my colleagues,” said Pacheco. “For example, sometimes our deluxe rooms were actually cheaper than our superior doubles. This is all down to demand—more people wanted that specific room type which quite rightly pushed up its price.
“In this scenario, using IDeaS G3 RMS ensured we didn’t sell our superior doubles too quickly at the wrong price—and at the same time, it encouraged guests to book the other room type that wasn’t moving.”
“Effectively, each room type has its own BAR, so we’re now selling more rooms at the correct rate, and we’re also avoiding overbooking a certain room type and then having to move guests to a bigger room.”
Accurate forecasts, automated reports
Pacheco’s support for IDeaS G3 RMS isn’t limited to the system generating a higher ADR. He’s also a fan of the quick, precise reports and forecasts it generates, allowing him to plan more accurate promotions and campaigns.
He also benefits from the platform generating reports with revenue shown by rate codes for each provider, which allows him to analyse the specific channel performance.
“We’re quite a small hotel compared to most of our rivals,” said Pacheco. “However, it’s actually an advantage as it forces us to be clever and creative. We’re expanding and next year we’re starting the planning process of adding 60 rooms in the hotel. That means there will be even more room types for IDeaS G3 RMS to help us optimise and maximise revenue.”