Reaching The Full Potential: How The Terrace Bay Hotel Uses Price Automation To Maximize Its Revenue

REVENUE MANAGEMENT

Reaching The Full Potential: How The Terrace Bay Hotel Uses Price Automation To Maximize Its Revenue

The co-owners of Terrace Bay Hotel, Rick Elrod and Jarred Drown share how renovations, new technology, optimized workflows, and implementing price automation to maximize revenue, got their hotel through the pandemic times. Set on the Northern shores of Lake Michigan, the Terrace Bay Hotel offers 61 spacious rooms and suites. Its familiar ambiance and waterfront location make it a perfect weekend getaway for nearby city-dwellers and a sought-after wedding venue. Guests can enjoy various activities on or around the lake and explore the Upper Peninsula’s stunning natural attractions.

Why it matters: In the past, the owners at Terrace Bay handled all revenue management-related tasks manually. That included picking and monitoring their compset, reporting and updating rates. They had two sets of base prices in their system, one for the peak season and one for the offseason. When they saw clear demand drops or surges (e.g., around an upcoming event), they adjusted them accordingly. However, since they did all this manually, they couldn’t always take the most advantage of new trends and often left money on the table. Once they completed the first set of room renovations, the owners knew it was high time to change that and began maximizing our revenue. That’s why they decided to implement Atomize RMS at Terrace Bay Hotel in January 2021.

After implementing Atomize, the system immediately took over all the manual work. It analyzes the market and evaluates demand and pick-up to optimize our rates every time there’s a shift. This saves us tremendous amounts of time and ensures our prices are always in line with the latest market developments.

Top 3 Core Objectives: To manage the tactic of revenue management manually was too time-consuming and inefficient since they couldn’t always take the most advantage of new trends and often left money on the table.

Capture more revenue: The objective of implementing an automated RMS like Atomize was to make the most of market shifts and by adjusting their rates more often capture more revenue opportunities.
Save time: The system immediately took over all the manual work. It analyzes the market, evaluates demand and pick-up to optimize our rates every time there’s a shift. This saves us tremendous amounts of time and ensures our prices are always in line with the latest market developments.
Rely on data-driven decisions: Data is crucial since it helps understand what’s happening in your market. The better your data is, the more well-informed your revenue decisions will be. And the more time you have, the more effectively you can gather high-quality information, evaluate it and form strategies. This was one of the objectives for the Terrace Bay owners, implementing Atomize gave them access to real-time decisions based on this type of market data.

Innovators Mentioned

Terrace Bay

Atomize

Jarred Drown

General Manager/Owner

Terrace Bay

"“Managing our pricing and adjusting category supplements every time demand changes would be a full-time job on its own. But even if I concentrated only on that, I think I still couldn’t do it as well and as fast as Atomize. The algorithm is simply faster and more efficient at finding and evaluating the data.”"

Jarred Drown

General Manager/Owner

👍 General Manager/Owner Jarred Drown said that A human can never manually do price optimization as well as Atomize:

"“Managing our pricing and adjusting category supplements every time demand changes would be a full-time job on its own. But even if I concentrated only on that, I think I still couldn’t do it as well and as fast as Atomize. The algorithm is simply faster and more efficient at finding and evaluating the data.”"

⚖️ The selection process: During their research process, Jarred Drown evaluated Atomize's product differentiators, customer support, and holistic value as a strategic partner and ultimately decided that Atomize was the best fit solution:

General Manager/Owner Jarred Drown said, about their decision: "“Going on full autopilot proved to be a fantastic choice, especially in the busy summer season. That’s when the demand is most dynamic and there are the most changes. But during those months we also have less time to check and approve rate suggestions because we’re so busy with operations. Atomize on autopilot is the perfect solution.”"

📈 The results: Embracing automation gave more efficient workflows and optimized rates and helped driving more revenue with open pricing and real-time price optimization.

When the owners at Terrace Bay first implemented Atomize, they still reviewed and manually approved each rate suggestion. However, since they were always satisfied with the algorithm’s updates, they decided to switch to full autopilot. Today, the system optimizes their prices on its own, without them having to step in. Now, if Atomize wants to change the rate first thing in the morning, it does so. This has two benefits for us: we always sell our rooms at the best price, and we save even more time which we can reinvest in other important work.
In the past, they had a fairly fixed price hierarchy for their room categories. They changed it to reflect major demand shifts but did not have the time to do it regularly. Atomize has been a true game-changer in this regard. It analyzes pick-up and demand by room type to see which room category they rates should be optimized for. Now, they usually have a smaller difference on slower days and more substantial supplements during high-demand periods. The RMS calculates and adjusts all this automatically and in real time which has helpes Terrace Bay further increase their room revenue.