CASE STUDY:
EzRMS™ Pays for Itself within Two Months and Empowers the Management Team at the Strand Palace Hotel
Situated in the heart of London's West End, just minutes from Covent Garden and Charing Cross tube station, the Strand Palace Hotel offers a contemporary yet comfortable setting popular with experienced business travellers who appreciate the quality of the rooms and the value for money; and with leisure guests, who especially love the hotel's central location, close to many London sights and attractions.
The recently refurbished Strand Palace Hotel offers affordable guestrooms, excellent restaurants and flexible conference facilities that all come together for a seamless guest experience.
Why EzRMS™?
David MacRae, General Manager of the Strand Palace Hotel, has a lot to say about the EzRMS™ SaaS Revenue Management System that was implemented at the property in late 2009.
"In truth, EasyRMS has made a huge difference to our business," he comments.
The hotel researched several RMS, he says, but what was most important to them was a system that could handle forecasting by room type and market segment. They also needed a fully functional interface to their V1 PMS.
"Before, applying restrictions via V1 was a complex and time-consuming task," notes David. "We used to spend a lot of time on data mining the PMS and there was no opportunity for us to question our business. We could only make changes with a VPN and remote desktop connection, but now we can use any connection, as the solution is entirely web based."
What the investment has done for the hotel
David is quick to stress that the system has paid for itself over and over again. "The cost of the system has been repaid on the reporting alone," he says.
"In figure terms, the investment may be hard to quantify as we started refurbishing our bedrooms in 2007, at a rate of 200 rooms per year. Between 2007 and 2009, rate grew by around 10%, with similar occupancy - 84%. Then from 2010 to now, after the introduction of EzRMS™, rates are growing at 14%, with still the same occupancy, and we mustn't forget that we have been through a recession."
Training & implementation
"The training you get when you buy EzRMS™ is, in my opinion, incredible; probably the best installation of any IT system I have ever seen, with first-class trainers. It was clear, concise and very user-friendly. Even I got the hang of it rather quickly," enthuses David, who adds that after the training, the hotel should then invest in their own people to understand how to use the system. "And the more, the merrier," he says.
Everyone will have different needs and requirements from EzRMS™, not just the revenue managers and reservations staff but the accountants, front desk and housekeeping. The system gives you much more information than your PMS ever will - in a user-friendly format."
How EZRMS™™ helps the business
* Two styles of single and four types of double occupancy rooms
* Monday - Thursday is 80% corporate and 20% leisure
* Fri-Sat is 10% corporate and 90% leisure
* Sunday is generally 50-50 corporate and leisure
The Strand Palace hotel is not an easy property to manage and yield, with nearly 800 rooms overall.
"We are playing with some very big figures," David comments, explaining how firstly, EzRMS™ helps by producing forecasts - based on many different and varying criteria.
"Whatever you wish to forecast, the system can deliver accurate, clear and graphical reports that are transferrable to Excel with one simple click."
However David points out that it's not quite so basic as getting the forecast out of the system, putting it in the weekly or monthly report and sending it to Head Office. "I'm afraid not," he says. "You have to understand what the forecast is saying and what you can do to improve on its accuracy."
The Revenue Management meeting
Previously at the Strand Palace, the Revenue Meeting was something of a weekly chore that everyone had to suffer - but not any more. Because of the way information can be produced, both for the future and the past, these are now one of the most interesting and well attended meetings in the hotel, according to David.
First up is a review of the week just finished, then next week's business, how well their website is producing, where they are compared to last year and last month and how the next quarter's looking. "All the standard stuff, and all done in 45 minutes."
Every morning the same four reports are prepared and put into Excel ready for the weekly Revenue Management meetings. These include:
- Forecast Analysis - Shows day-by-day by arrivals and departures which helps Front Office, F&B and Housekeeping.
- On the Books - By month and for total year, by day, for every month.
- 'SuperBob' - Shows annual figures, by week, for Pickup, On the Books, Reservation Source and Market Segmentation. These figures are extracted directly from EzRMS™, which is something the hotel couldn't do before so the job could take up to 45 minutes. Now these tasks take just 10-15 minutes.
- Recommendations - These are now reviewed daily by the revenue management team, and this is no longer a time-consuming task. It takes them just 3 minutes to push out 365 days.
"The graphical format of reports means they are easy for staff to understand, which is great, as we scrutinise figures every morning," says David.
Each morning at these meetings, all attending see the business on the books - it's right there in front of them. "As this information is displayed graphically, it is clear to understand and relate to," David comments.
"Housekeeping see what is coming up in the next few days as does catering, so judgements can be made on staffing levels, breakfast cover, etc. I know they all get this information anyway but it's presented again, and no one can say they didn't know what was going on. Interestingly, if figures are not put up, there is a general feeling of uncertainty and discomfort; even worse than if the following week's figures don't look that good."
"When you imagine having lead times for various room types, market segments and booking patterns for your website available all the time - the power of the system starts to become clear," continues David.
"Someone might ask a question like: What was the average lead time for leisure guests booking single rooms through Expedia for the last ten Sundays? There might be muttering sounds in the room. why does he want to know that?... but meanwhile someone taps out these details on the system and before we know why the question was asked, we have the answer."
Automated Revenue Management brings power to the people
David says the team is now much more knowledgable about the business. To give an example, he tells of how by using EzRMS™ the team was able to ascertain that certain of their larger rooms, in the system as Club Kings, were returning higher rates than other King rooms, so they took the decision to add extra amenities to those rooms and charge a £30 premium.
"These 40 rooms continue to carry this premium and sell equally quickly as the regular King room. This gives an additional £1,200 of revenue per night, and we are now doing the same with some of our single rooms, adding a £20 supplement. On this alone we will increase the whole hotel's ARR by £2.00."
Another example is when they examined EzRMS™ nationality and booking patterns on the Strand Palace website, and found that Spanish-speaking countries were yielding the largest proportion of business.
Consequently, a Spanish section was added to the website and now returns up to £10,000 of business every month. This measure has also moved business from more expensive channels onto the hotel's website, which has a minimal cost to them.
Future uses
The Strand Palace are now gearing up to purchase a new Time & Attendance system which will pull metrics from EzRMS™ and help with staffing levels. They are also integrating EzRMS™ with their back of house signage system, which will help ensure the correct data is displayed around the hotel.
In summary
"EzRMS™ provides us with accurate forecasts for variable periods of time, broken down by market segment, origin and much more," David explains.
"The forecasts give the tools for our RM team and other departments to analyse our business going forward, whilst at the same time allowing us to review business from previous periods in great detail. This analysis allows us to make major decisions on how we operate and run our business going forward. Information required from our systems is now on hand and only minutes away, meaning that decisions can be made on the day."
David says that the hotel's financial investment in EzRMS™ was recouped within two months - "not many investments repay that quickly."
However he feels the investment in staff, in terms of understanding the business even more, is ongoing.
