Hotel Weingarten, yield & revenue management in action

For years we have been working together with the Hotel Weingarten in Caldaro. With Flavio Giuliani, the owner, we have successfully implemented growth strategies and introduced them to the opportunities (and challenges) of the digital world.

So when we started to co-ordinate the entire web-based activities of hotels and to develop proper management strategies,it was a logical step to propose this even to Flavio Giuliani.

About two years ago the hotel was facing a difficult situation. The sales have stabilized on a low level. It was therefore necessary to act decisively to avoid long-term consequences difficult to manage. This was the reason why we decided to work together to develop a yield & revenue management strategy that could respond vigorously to this situation.

What is yield & revenue management?

Yield & revenue management is the management of revenue or profitability (depending on which parameter you prefer to emphasize), focusing on techniques that make better use of spare capacity in certain areas. The bottom line is to increase the contribution of these areas to total sales.

If you want to know in detail what is meant by Yield & Revenue Management, you can read on our blog, here it is sufficient to point out that in a hotel business it is a matter of managing free rooms so that the highest possible turnover can be achieved.

How does a yield &revenue strategy emerge?

The starting point for this Yield & Revenue Management project was the creation of a marketing plan. It examined the strengths and weaknesses of the hotel, defined the target group, analyzed the physical evidence of the company and not least kept an eye on the image the hotel has in the most important ranking platforms.

This strategic analysis has laid the foundation for all further steps. That’s how it showed us:

  • how we have to customize the hotel and how to promote it in order to address the main target groups (families and cyclists)
  • how the room categories need to be optimized in order to guarantee the best possible presence in the most important OTAs (Online Travel Agencies),
  • what should be the business plan that defines sales and investment forecasts for the next five years;
  • what needs to be considered when developing a communication plan that will best achieve all these objectives.

Communication and technology – key to achieving goals

The most important element of our communication strategy was the hotel’s website, which we have reorganized, in order to optimize destination marketing. In this way we have offered to the hotel‘s website users an overview of the area where the hotel is located, widening their view from the structure to its surroundings.

Fundamental to the success of the website were also the analysis of the keywords and the search engine optimization, thanks to which the site could be strategically positioned in the search engines. Because the visit to the site alone counts little, a booking engine was installed that allows bookings directly through the site and also gives operators the chance to easily manage prices and capacities. In general, the booking engine is at the heart of revenue marketing, with dynamic room price adjustments, targeted deals, and the exploitation of minimum stays that can be managed in near real time.

In addition, there is a detailed analysis of the monthly number of guests and sales, which not only provides an overview of the course of business, but also ongoing optimizations.

Tangible results

Today, after two years of work, we can present some significant results obtained through our yield & revenue management strategies.

In the first year of supporting our client with ongoing pricing, revenue increased by 20 percent, thanks to an increase in online bookings by as much as 90 percent. Of these 27% were direct bookings of the site, while73 % contributed the different OTAs.

In the second year, when room pricing management went entirely under our control, we saw a further 22% increase in overall revenue, thanks to a 172 % increase in online booking. Compared to the previous year, direct site bookings increased by 43.5 %, while arrivals through OTAs increased by 200%

On the whole, from the start of the project, the hotel’s revenue increased by 42.6 % thanks to a targeted yield and revenue management strategy.