Hotel ICON Reinvigorates Its Revenue with IDeaS G3 RMS
Hotel ICON is an award-winning luxury property housing 262 upmarket rooms. Located in the bustle and energy of Tsim Sha Tsui in Hong Kong, Hotel ICON is a modern, uniquely designed property with a commitment to delivering unrivalled guest comfort and featuring a wide range of dining choices for both leisure and business guests.
In addition to being a top-rated business hotel on TripAdvisor, Hotel ICON is also a training school for the next generation of hospitality leaders. Owned by Hong Kong Polytechnic University, Hotel ICON was opened in 2011 by Richard Hatter, the hotel’s general manager and adjunct professor, and operates as a research and training facility for the School and Hotel of Tourism Management in Hong Kong.
Attracting Higher-Value Guests
“Hotel ICON operates in one of the world’s most competitive hospitality markets and at very high occupancy levels—all of which means there is little margin for pricing error,” said Hatter. “Our executive team is always looking for ways to not only enhance guest experiences, but also improve the returns from our inventory and maximize revenues.”
Hotel ICON has a large inventory of upmarket club rooms and suites boasting superior amenities and accounting for 38.5% of the hotel’s total room inventory. Demand from guests, however, has traditionally been overwhelming for the property’s standard rooms, compared to higher-priced rooms. Demand for standard rooms from January to December 2017 was 126% compared with 40% for club rooms and 54% for suites.
“Our executive team was challenged by how to best lift revenues when market demand for our room inventory from guests was largely focused on lower-rated room categories,” said Hatter. “We quickly realized we needed a new approach with a best-of-breed revenue management system that could assist with room-type pricing and yielding.”
Returning to the Market Leader
Hotel ICON had been working with a different global revenue management system (RMS) provider but had experienced limitations with the system. Given the advanced automation and room-type management needed, Hotel ICON chose to work with IDeaS, a company the management team had previously enjoyed a successful relationship with.
“We had used a different IDeaS product previously, as well as another revenue management solution, and were confident IDeaS G3 RMS’s unique ability to assist with room-type management and yielding, along with IDeaS’ solution for meeting space revenue management, was the best choice to drive revenue and profitability for the next stage in our revenue management journey,” said Hatter.
Through its adoption of IDeaS G3 RMS, Hotel ICON achieved optimal RevPAR performance through rate increases and by selling the higher room categories at suitable market prices. Importantly, this process helped minimize overbooking entry-level rooms and forced upgrades, a key area of opportunity many hoteliers are challenged by in the hyper-competitive Hong Kong market.
“Previously, increased demand would simply push the selling price of our room inventory higher across all room categories,” said Hatter. “Today, with the advanced IDeaS G3 RMS, Hotel ICON can accurately forecast and price our room inventory based on different room categories. This is a significant development for our property.”
Netting Early Rewards
Since returning to work with IDeaS and implementing the industry-leading G3 RMS solution, Hotel ICON has experienced significant improvement in the performance of the property’s higher-value room categories. Within three months of the G3 RMS installation, Hotel ICON saw year-on-year RevPAR growth of 4.51% for its higher-value club and suite rooms, driven by a 7.35% increase in ADR.
“When we looked to update our approach to revenue management, we committed ourselves to changing our strategies over the long term,” said Hatter. “We are pleased that since returning to work with IDeaS, Hotel ICON has experienced tangible improvements in the performance of our club and suite room categories, which has contributed to a significant uplift in revenue over a short space of time.”
Thinking Outside the Guest Room
Going forward, Hotel ICON will also implement IDeaS Smart Space, making their property the first in Hong Kong and China to benefit from the innovative, web-based tool which provides unparalleled visibility into meetings & events demand. Smart Space seamlessly pulls data from other sales tools to strategically manage function space events, allowing hoteliers to collaborate and create ideal pricing scenarios for group business.
“The positive results we have witnessed with IDeaS to enhance revenues from higher-value room categories gives us tremendous confidence we will see similar improvements from our meetings & events,” said Hatter. “We look forward to continuing our growth with IDeaS as we aim to enhance our total revenue performance.”