Omni achieves highest RevPAR index it has achieved in 10 years

Omni Hotels & Resorts has shared that it has achieved record RevPAR with micro-focused rate-setting strategies.

Published: 24 Feb 2011

Omni Hotels & Resorts has shared that it has achieved record RevPAR with micro-focused rate-setting strategies.

Referring to the significance of sophisticated revenue management strategies in order to manage rates and availability, the company says it created and implemented unique approaches and processes that are highly responsive to this rapidly changing online environment.

In early 2009, when Omni noticed a reduction in business travel, it offered more competitive rates to maintain occupancy and market share. But when demand returned in 2010, the company gradually reduced its mix of discounted segments to maximise overall ADR.

“As a company last year, Omni achieved the highest RevPAR index it has achieved in 10 years,” said Lesli Reynolds, VP of distribution systems and revenue strategy for Omni Hotels & Resorts, which includes 50 luxury properties in North America.

Omni relied on the revolution revenue management system from The Rainmaker Group to implement its strategy and achieved a record RevPAR index.

Greater precision, confidence in rate-setting

“When the numbers indicated demand was returning, we changed our mix of discounted business to increase ADR without jeopardising occupancy,” said Reynolds. “We worked with revolution to reduce non-qualified discounts by establishing prepay, advanced booking, and other requirements that aided our RevPAR index.”

Reynolds noted that Rainmaker’s revolution solution supports both occupancy- and ADR-focused strategies. “There is a real advantage in having more accurate demand forecasts based on commitments, historic data, and seasonality by segment. We use revolution to rationally set segment rates in all markets and across the highest yielding channels. This strategy leverages our most effective channels and prices rooms so guests who stay with us pay the most appropriate rate for our hotels.”

Omni found that other systems utilise a broader price-setting process to recommend the most competitive rates, but Rainmaker’s solution is more micro-focused. “revolution looks at every rate,” said Reynolds. “That is a significant advantage for a company with properties in markets as varied as San Francisco, New York and Tucson. It gives us greater confidence in our strategies and rate setting when we have all the data available.”

Increased revenue from data-based rather than gut-based decisions

Omni installed a new brand-wide property management platform with a centralised database in 2008. “The central reservation system interfaces with revolution to provide data for our demand forecasts and rate setting calculations,” Reynolds said. “revolution generates bid price recommendations for all segments of our hotels. The success we have had with increased RevPAR is based on the analytics that let us make data-based decisions rather than gut-based.”

Prior to its implementation of revolution, Omni utilised corporate and leisure rate segmentations. “Now we have seven best-available rates by day-of-week and demand restrictions by length of stay along with hurdles to help us maximise rates and occupancy throughout the week,” Reynolds said.

Maximised RevPAR every day of the week

Reynolds cites the Omni Berkshire Place in the high-density NYC market. “We used revolution to measure the growing strength in the New York market based on many variables including history and seasonality. The system enabled us to protect our peak weekdays and still maximise occupancy and rate throughout the week.”

“Omni has on-site property revenue managers who work with the revolution system on a daily basis,” Reynolds notes. “They are familiar with their markets and review revolution’s optimised segment price recommendations and fine-tune them, with our input, to implement strategies that maximise both RevPAR and occupancy.”

 
 
 

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