In March 2021 Louvre Hotel Group embarked on a mission to advance its technology stack. The company is a major player in the worldwide hotel industry with a portfolio of 1,700 properties in 60 countries across the world and is an affiliate of Jin Jiang International Holdings, Co, Ltd., the second largest hotel group in the world behind Marriott Starwood. When you are number two, the goal is always to be number one.
At Louvre Hotels Group we started asking ‘What are the strategic projects and levers needed to take us forward?’ One of the answers was empowering revenue management and pricing.
A thorough audit was conducted, and this showed us that, in the very same markets we operate in, with the same hotel categories we run, there was potential to improve.
We went out to tender for a revenue management system (RMS). We did consider several tools. Duetto is the one that fits our organization, and our ambitions, the most. We have a vision of agility and open, dynamic pricing that Duetto is responding to perfectly.
We are still in the implementation stage. We just rolled out 50+ big hotels on Duetto, with many more to come. Already we can see the benefits of having integration and synergy between distribution, business intelligence, and commercial strategy.
The biggest benefit is that we know there is something clever working in the background 24/7, stimulating our talented RM teams towards new optimization horizons. This multiplies the potential of capturing quality revenue. Business intelligence combined with automation is the number one benefit.
The second benefit comes from our team learnings. We can learn by comparing Duetto’s rate recommendations with what we would do. I do not expect Duetto to be 100% right. But I like that it will challenge our revenue management and pricing practices, and make us ask ‘Why does the tool do this and goes in this direction?’ That’s a fantastic learning opportunity for us.
Third, we want to use the team’s spare time, which comes from not doing manual tasks, to start new added-value activities of Total Revenue and Profit management.
Specialized Revenue Management
The Louvre Hotel Group has a diversified portfolio of hotels and business models. These are either owned and leased, managed, or franchised hotels. More than 60% of our hotels are based in France.
The group offers a range of hotel stays from one to five stars, with the historical brands of the Louvre Hotels Group: Première Classe, Kyriad, Kyriad Direct, Campanile, Tulip Residence, Tulip Inn, Golden Tulip, Royal Tulip; the five brands of the Sarovar network in India and the Hôtels & Préférence Group.
Our organization can count on regional directors of revenue management who coordinate multiple area revenue managers. Combining all of these, the specialized revenue, pricing, and systems teams at Louvre Hotels Group number 35+ persons.
For our owned and leased hotels, we operate a specialized revenue organization. This is built on three pillars: pricing, performance, and revenue management tools.
Pricing is all about strategy, Global promotions, and the right rate structure for all segments. What do our existing and new customers need? Should we keep selling flexible rates like during the pandemic period or go full astern to pre-paid rates? How do we adapt conditions to this unprecedented fast-changing market scenario? The pricing team looks at the overall logic and the economics behind all pricing and promotional initiatives.
Performance is concerned with the quality and execution of the revenue management and yielding discipline on top of the performance of the hotels. Therefore, goes beyond the results as such and looks at the revenue quality and profitability also. It’s responsible for the implementation of AI-based forecasting. It looks at how well the commercial practices, notably revenue management, yield, and pricing, are applied across our hotels.
Revenue management tools is all about the performance and selection of tools. For example, if we are using low technology to optimize revenue and pricing, then we’re at a disadvantage compared to the competition that uses advanced technology such as an automated RMS. That's also the reason why we decided to go on Duetto and have team members developing the Revenue Management tools ecosystem with a holistic approach and with skills in both RM and hotel technology.
In addition to these three key pillars, we introduced a team of rate integrity experts to ensure our commercial strategy is harmonized and monitored across all channels. Our commercial strategy is protective of our existing distribution partners, and we are attentive about to whom we open our inventory and pricing.
However, when you zoom in too much on RM aspects, in such a big organization, you might lose sight of the field, the everyday problems, and any issues because everything happens in the hotel, and you might be perceived to be in this high white tower 1000km away. You must be aware of that and respectful of the operational teams’ views.
For our owned and leased hotels, our organization has full end-to-end control whereas for franchisees we do provide expertise, tools, and support, but ultimately, they have full control. This requires a different dynamic in the way you build and maintain a relationship.
With that said, our RM and Pricing initiatives are proving extremely beneficial for our owned and Leased hotels, and naturally, the next step will be to make both the learnings and the tools like Duetto available for our franchisees.
Because of the variety of our hotels and the potential revenue uplift that the revenue management and pricing organization can generate, the specialized model, supported by an RMS, is the most sustainable for us.
Discover more about getting started with RMS Technology in our Hospitality Executive’s Guide To RMS Technology. Download today. https://www.duettocloud.com/special-reports/guide-to-rms-technology