Case Study

IDeaS Uncovers New Revenue Opportunities in Oversaturated Market, Delivering ROI in 12 Days

Kathryn Atterberry

IDeaS · 十二月 09, 2022

As Canada’s third-largest city, Calgary relies on tourism and business travel to draw millions of travelers to festivals, events and the nearby mountain resorts in Banff and Lake Louise. What was once an oil boomtown has become a beautiful metropolis in a fast-growing region, the Calgary-Edmonton Corridor. A side effect of past oil-driven growth, however, is now an oversupply of hotel rooms and hyper competition for travelers in a dense downtown core, especially in the warmer summer months.

Why it matters: Kyle Strachan, revenue manager at Hotel Arts, is responsible for pricing and forecasting the 185-room independent Hotel Arts property and a smaller sister property—a big challenge, considering that occupancy rates across Alberta have dropped for three consecutive years.

To ensure Hotel Arts can attract visitors and grow occupancy, Strachan and Hotel Arts’ leadership were looking for a way to optimize pricing strategies. They knew an automated, intelligent revenue management tool could help the hotel make more strategic business decisions and optimize revenue throughout the year.

Top 3 Core Objectives: Changing a business strategy and guest segment

Tapping into automation: Hotel Arts understood the power that automated revenue management brings to Hotel Arts
Increase low weekend occupancy: By leveraging the powerful forecasting and analytics in IDeaS G3 RMS, Strachan was able to determine that leisure guests represented an untapped revenue source for Hotel Arts, but that the company would have to shift its thinking to take advantage of the opportunity.
Identify opportunities: Within the first several months of use, Strachan and his colleagues had the data that clearly showed certain group blocks were less profitable than other business and the right strategy was to target more transient guests.

"A new system encouraged us to shift our behaviors—fighting the system would only mean that we’d still be pricing the same way we always had. The training and resources from IDeaS during and after implementation were extremely helpful. They taught us how and why to trust in the system’s outputs. Now, we’re strategically distributing lower rates where it will equate to more revenue. Without a tool like IDeaS and the confidence we have in its decisions, our leadership would have never agreed to that strategy."

Kyle Strachan

Director of Revenue

👍 Director of Revenue Kyle Strachan said that Strachan and Hotel Arts’ leadership were looking for a way to optimize pricing strategies. They knew an automated, intelligent revenue management tool could help the hotel make more strategic business decisions and optimize revenue throughout the year.:

"A new system encouraged us to shift our behaviors—fighting the system would only mean that we’d still be pricing the same way we always had. The training and resources from IDeaS during and after implementation were extremely helpful. They taught us how and why to trust in the system’s outputs. Now, we’re strategically distributing lower rates where it will equate to more revenue. Without a tool like IDeaS and the confidence we have in its decisions, our leadership would have never agreed to that strategy."

⚖️ The selection process: During their research process, Kyle Strachan also researched , and ultimately decided IDeaS was the best fit for them.

Director of Revenue Kyle Strachan said, about their decision: "We effectively removed an entire segment from our hotel, because we knew the revenue potential was bigger coming from the transient leisure sector,” said Strachan. “In making this change, we believe IDeaS paid for itself in the first two weeks and the tool continues to provide incredible value to our organization. It allows me to spend more time being strategic and coaching our staff on how to leverage the data and analytics from the IDeaS. The results speak for themselves."

📈 The results: With IDeaS’ analytics and forecasting, Strachan’s team started budgeting and evaluating future pricing scenarios.

30% RevPAR uplift for summer weekends
Occupancy rate increased to over 90%
Re-evaluate both its competitive set in the market and its pricing strategy to better target leisure travelers