A Revenue Management Case Study for Small and Medium-Sized Inns & Boutique Hotels
By Vikram Singh
Our Featured Lodging Properties:
Three Unique Properties in Three Different Markets
Property A
A luxury Shenandoah Valley bed and breakfast, one hour from Washington D.C.
The property offers a full breakfast each morning, a seasonal pool, and a fine dining restaurant on site.
Property B
Cabins and glamping B&B on a 350-acre ranch near Houston, TX
These private cabins, historical guest houses & glamping units pair with unique ranch experiences.
Property C
A small, luxurious classic boutique hotel in Savannah, GA
This historical home built in 1871 features unique guest rooms with timeless craftsmanship and charm.
Our Action Plan for Inn and Boutique Hotel Revenue Management
Positive Performance and Pandemic Protection
We started actively managing rates for each of these properties early in 2021. Our mission in each case was to turn around their financial performance and minimize the pandemic’s impact on their revenue.
To deliver the right mixture of occupancy and ADR (average daily rate) for each client, we began with a thorough analysis of the property and its local market. We then took the following actions in order to create a customized revenue strategy for each property:
- Implemented a dynamic pricing structure
- Reconfigured the rate structure
- Updated room type and supplement structure
- Overhauled the inventory management process
- Reconfigured the business mix
- Controlled room availability offered to FIT partners
- Reviewed & improved OTA content for all distribution partners
- Reinforced luxury travel agency partnerships
- Monitored and corrected rate parity issues
See the Revenue Results and Improved Gains
A Comparison of Revenue Performance: 2019 vs. 2021
All of these properties were closed for parts of 2020 due to mandated shutdowns. We compared our 2021 performance with their performance in 2019, when the inns operated without restrictions all year.
Property A
- Total Revenue in 2019: $603,535
- Revenue on the books for 2021 when we started in January: $219,929
- Total Revenue in 2021: $1,179,841
- The property set a revenue record in 2021, and made $576,306 more revenue vs 2019 (95% increase) in a pandemic year with two variant surges.
Property B
- Total Revenue in 2019: $525,985
- Revenue on the books for 2021 when we started in March: $204,889
- Total Revenue in 2021: $962,832
- The property set a revenue record in 2021 and made $436,847 more revenue vs 2019 (83% increase) in a pandemic year with two variant surges.
Property C
- Total Revenue in 2019: $302,457
- Revenue on the books for 2021 when we started in April: $176,485
- Total Revenue in 2021: $548,959
- The property set a revenue record in 2021 and made $246,502 more revenue vs 2019 (82% increase) in a pandemic year with two variant surges.
All three properties set a revenue record during their first year with us, with each one almost doubling their annual revenue!
Discover Details About Increased ADR & RevPar
Growth in Average Daily Rate & Revenue Per Available Room
Our goal is to help all of our clients increase their overall financial performance. Every one of them saw a very significant improvement in RevPar as well as their overall ADR. These metrics highlight the fact that our dynamic strategy drives value and rate equally, to make sure the inns can see an increase in overall rate as well as revenue performance. Smart yielding ensures that no higher rate opportunities are lost during the year.
Property A
- ADR: $312 in 2019, increased to $388 in 2021
- RevPar: $150 in 2019, increased to $293 in 2021
Property B
- ADR: $295 in 2019, increased to $346 in 2021
- RevPar: $82 in 2019, increased to $211 in 2021
Property C
- ADR: $230 in 2019, increased to $284 in 2021
- RevPar: $103 in 2019, increased to $188 in 2021
The results speak for themselves. These boutique hotel and inns have enjoyed incredible revenue gains and you can too. Don’t stop with just improving your revenue management strategies; find out more about how you can increase your bed and breakfast marketing results with over 60 tips. Need help? Call White Stone Marketing at 808.269.9600 today to uncover your hidden earnings!
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