Pandemic “exit strategy” – City centre case study, maximising revenue growth.
Cash generation as we start to exit this phase of the pandemic must be one of the top priorities for every business, whilst we continue to accept that some previously reliable revenue streams, markets and locations will continue to present challenges. On the back of an already shared case study “Canary” we update with the outcome of the trading period since March which has coincided with the roll out of the Government’s roadmap, as an example of how this could be done.
To counter initial low demand in the spring we implemented clear and meaningful initiatives to achieve targets despite the restrictions. We are confident this strategy can benefit any hotel and will have relevance to town and city centre locations, where the staycation benefit over the summer will not be felt so obviously.
To quickly recap on the original case – Assured Hotels (AH) were appointed to assist in the turnaround and disposal of an aparthotel asset for the stakeholders. The business benefitted in 2020 from capital investment but was effectively a new opening in Q4 of 2020, with sale completed at the end of Q1 2021.
Our sales and distribution strategy therefore had to create maximum awareness and sacrifice some cost through higher impact route to market channels, but then backed by additional initiatives to bring those costs down whilst maintaining bookings momentum.
The tools and platforms used included a small targeted budget towards Google pay per click, rate shopping tool to increase visibility across an agreed competitor set and appropriate merchant services providing e-commerce in the form of a payment gateway linked directly to the property inventory via the booking engine.
Additional market connections have also been set up to capture business and corporate users as those markets return via an agreement with our GDS partner HotelREZ. Whilst that is anticipated to be a slow return after the summer, the highlights of this plan at the subject property can be seen in performance summary to date:
Actuals April – June 2021
- Revenues exceeded budget each month April – June, with the ADR up £10 on that achieved last summer.
- Occupancy slightly back on expectations for the same periods.
- July business on the books already ahead of budget, August & September will also exceed budgeted revenues.
- July revenue forecast is over 3 times the actual achieved in April, double that of May and 25% more than the June actual.
Effectively as a new opening this property has achieved the stretching budget set both in terms of hitting top line revenues and has been cash positive from April, maximising the wider demand we reported on in Boutique Hotelier recently. We now have the additional benefit of a well-developed strategy and increasing consumer awareness to maintain the booking pace whilst reducing commissions and other route to market costs over the next 6 crucial months.
All of this supports a strong on-site management team to focus on delivering a great customer experience backed by robust Covid compliance to ensure a safe environment. We are therefore confident that this approach can be applied to any business to help overcome the obvious difficulties ahead.
Please see our Projects Page for other recent case studies and project outcomes.
For further options linked to asset value recovery and re-positioning strategies please see our dedicated webpage or get in touch to discuss support in any area of hotel & hospitality planning:
e. email@example.com t. 0203 916 5658
or book a no-obligation meeting @ https://meetings.hubspot.com/mgriffin6