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Why Centralize Your Hotel Revenue Strategy?

Gorgeous Smiling Hotels (GSH) is a young company with the goal to become a pan-European player. We currently operate mainly in the DACH region (Germany, Switzerland, and Austria) with a mix of own-brand and franchised properties. We specialize in 3–4-star properties, with around 80% of our portfolio being low-service, lifestyle properties. We currently have 45 hotels in operation.

In late 2021 we embarked on a plan to invest in IT. We knew we needed to look more closely at our technology landscape to move on. Central to this tech landscape are the PMS and Duetto. We decided to add in more elements, such as a channel manager, a CRM, market intelligence, and operations solutions. The aim is two-fold: to enhance our profitability and to drive operational efficiencies.

The result of the new set-up is incredible. Our revenue is up 40% on 2019, and the team is enjoying this success.

Duetto BlockBuster, for example, really assists our reservations team. We get 100 group requests a day. If every one of those requests needs to be cleared by a revenue manager before reservations can give a price it won’t work. But now, with Duetto BlockBuster, the reservations team can do the quote themselves because they can see the rates in BlockBuster.

Putting Brands First

Revenue management isn't something that can be done by the front office manager or the reservations manager or the general manager in the half hour that they have nothing to do. It’s a full-time role.

Here at GSH, we have a centralized team. This is how we work.

Because we are multi-branded, every revenue manager has a brand. We don’t categorize revenue by destination, service level, or star rating. We categorize by brands because it’s the brand that counts.  

A revenue manager knows:
  • When the holidays are
  • When there are special events
  • When the city is full because some boy band is in the stadium

Those are things you can easily know. But getting to know the brand is the most important thing.

Using BI to Connect a Franchised Portfolio

We also manage revenue for 40 franchised hotels and growing. We aim to add 10 hotels a year as we move forward.

In these hotels, we have full control over revenue management. But there are many big brands – we work with IHG, Hilton, Wyndham, and others - and so there are many different systems. What connects them, for us, is our business intelligence tool, which is Duetto ScoreBoard.

Like how we run our own brands, I have one person for each franchise brand, they understand the brand and the target market. I have one person for IHG, for example. However, this does require additional training, as I need to be able to cover holidays and sick days. I need people on the team that can use these multiple systems. However, our revenue strategy for all properties, own brand or franchised, stays the same. And all sit under the Duetto ScoreBoard umbrella for reporting.

Encouraging Competition

At GSH we have a lot of locations where we have multiple properties. In Munich, for example, we have four brands. Here, you must build price integrity into your brand, and having a revenue manager per brand helps drive that.

However, competition is healthy.

I tell the team: ‘Don’t be too kind to your colleagues’ and by that, I mean if you can get healthy traffic to your hotel and brand, do it. If your colleague isn’t, then they should do a better job.  This does not mean you start underbidding your neighbor. That is a race to the bottom. This is about trusting your own strength.

Over-bid each other, make your brand stronger than the other one, and sometimes you win sometimes he loses. But every time GSH wins.

You must believe in yourself until the end and not start lowering prices. Look at the data, make the decisions, and if you don’t get it right, move on and learn from the mistakes. We are all about healthy competition and may the best person win.

Staying True To Strategy

Every euro makes a world of difference when you have 6,000 hotel rooms. The reality is that costs are going up. The cost of energy, for example, is going up. We have long-term contracts in place, but we already know from negotiations that the price will go up. But it will also go up for my competitors.

We all have the same issues. These rising costs have nothing to do with your revenue strategy because my colleagues in the other hotel chains will have the same issues and their costs will go up as well.

The question is how do you react to that and stay true to your strategy? How do you continue to look 3, 4, 5 years ahead?

And for GSH, the plan is growth. We have 10 hotels already in the pipeline. We will open a Rilano in Stuttgart in mid-September, we have the Arthotel Ana Regensburg due to open soon, and new properties in Innsbruck, Koblenz, and Berlin. In addition, we are looking at rebranding and renovating some of the properties we take on.

The hybrid nature of our business, with our own brands and our franchise model, means that we can make decisions based on what the market needs. For example, in bigger cities, we don’t necessarily need a big name on the hotel because we can use our own brands, but there are other markets where we can use the strength of such international brands to your advantage. And this makes the business stronger.

Our diverse portfolio also makes our revenue team stronger. My revenue managers have all learned from their experiences working with Hilton, IHG, Wyndham, etc. And their collaboration and internal competition drive everyone forward.

Whether you are a small company, big company, or standalone hotel, the future is revenue management.

Discover more about getting started with RMS Technology in our Hospitality Executive’s Guide To RMS Technology. Download today.  

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Edwin Jebbink, Chief Operations Officer, Gorgeous Smiling Hotels

Chief Operations Officer, Gorgeous Smiling Hotels

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