‘It was the best of times, it was the worst of times,’ is a famous quote from Charles Dickens’ novel ‘A Tale of Two Cities’, but it could easily be the story of the first two years of operations at The Standard, London.
US lifestyle brand The Standard opened its first international hotel in London in July 2019.
This meant that going into the COVID-19 pandemic, the hotel had barely six months of operating data to pull on.
Amrita Makkar, Director of Revenue Management at The Standard, London, worked with what she had and, using Duetto, was able to steer the hotel through two closures to finally re-open on May 17, 2021.
Located in an area prejudiced because of its past, London’s Kings Cross was never considered a destination within London. This presented Makkar with challenges as she built and then redefined her comp set. The area is now very much up and coming, with tech giants such as Google making it their London home, as well as the culture hub created around Coal Drops Yard.
“A struggle is to achieve an ADR reflecting the hotel’s high standards versus what you can drive in the local market. Educating and acquiring the right high-end clientele to come to Kings Cross can be quite difficult,” she explained.
With the hotel’s top-end suites retailing in the thousands of pounds, Makkar is competing against London’s finest.
“We benchmark against the lifestyle brands: The Edition, St Martin’s Lane, W London, and, of course, Renaissance St Pancras as it’s across the road,” she said.
Using Duetto’s Short-term Forecasting
Being a new property and having no historical data made revenue management a challenge. Then came the pandemic, and The Standard, London was forced to close two times.
“From a revenue perspective, the historical data is obsolete due to the current market conditions. Our focus, therefore, needs to shift to forward data. We now look at sources such as flight searches, meta searches, OTA demand pressure, and events that are still taking place in our destination to identify and convert this demand. Even city-wide events have changed, for example, Chelsea Flower Show used to be in May every year, and for 2021 it’s in September,” Makkar explained.
“Now it's all about being in the know, especially where the government guidelines are concerned and travel corridor changes. We look to identify micro trends with the help of technology such as Duetto and capitalize on these trends.
“I was very pleased Duetto brought in the short-term forecasting reports, enabling us to compare pick-up trends from the latest four weeks versus the last 10 weeks, and exclude STLY data. It has been extremely helpful for us to establish short-term trends and helped us with our pricing strategy.”
[Discover more about Duetto’s Short-term Forecasting in the blog ‘Reimagining Demand Forecasting For The Hospitality Industry’.]
Changing Strategy
As a US-born brand, The Standard Hotels primarily cater to a largely US demographic. The Standard, London experienced the same when it first opened, but with travel restrictions brought into play due to the pandemic, that had to change.
“We’ve changed our strategies,” Makkar explained. “We are now relying very much on UK domestic travel, and we are going after markets such as Manchester, Birmingham, Edinburgh, and Glasgow. That is an outreach we still need to work on more, but it's been more of a focus now with the travel restrictions in place.”
Now that the hotel is open again, Makkar has been experimenting with room type pricing, length of stay discounts, and creative packages to help attract the domestic market. While the market has become more price-conscious, The Standard, London is also seeing increasing demand for its higher room categories.
“People are looking at: ‘Okay, the hotel would have been £300 before for a Queen Standard, now I can get a King of Kings for that £300.’ They want to treat themselves, they've been in a lockdown for a very long time, so we've seen a lot of higher categories being booked, but then you have the other side, where people are very price-conscious because they don’t want to spend a lot on a staycation. It is all about managing the demand from all these different segments and converting this demand into bookings,” Makkar explained.
To maximize on this demand Makkar has been using Duetto to base her pricing rules on demand rather than occupancy OTB.
“I like that Duetto can monitor future demand and I can set pricing rules based on demand occupancy rather than committed occupancy on the books. Room type pricing rules allow a great degree of flexibility. I set my rules based on the remaining rooms in a room type. The popular room types can change based on seasonality or even now with the pandemic the rooms with outside space are more popular,” she explained.
Beating Comp Set on Re-Opening
The results speak for themselves. The hotel achieved 100%+ RGI in its re-opening week, smashing the comp set in its ADR achievements.
“We finally re-opened on May 17 as per the government guidelines and saw our best STR results we have had since our first opening in July 2019,” she said.
“The rate has been fantastic because guests are looking for outside space. We are very lucky with our eighth-floor rooms, they all have an outside terrace and there is a bathtub on the terrace too. So, although we don't have a spa it's still a feeling of luxury and you can book a massage on the terrace overlooking the city. We created a wellness package for these specific suites, and it has been one of our most booked packages.”
The hotel was also able to open The Rooftop, offering cocktails and light bites with panoramic views of the city. This outlet proved so popular that Makkar packaged it with a room, offering a guaranteed reservation at the Rooftop with an overnight stay.
“It's been so successful; everybody's been booking it because it is just absolutely gorgeous to have a nice cocktail in hand when watching a sunset over London’s skyline, and finish the evening off with an overnight stay in one of our stunning rooms,” Makkar remarked.
While the pandemic has stretched the hotel industry to its limits, it has proved a learning curve, as Makkar summed up: “We've become a lot more creative and achieved good results.”
Next week, discover how The Standard’s New York properties have also fared during the past 18 months in ‘A Tale Of Two Cities: The Standard, New York’.