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Luxury Hotel & Spa Increased RevPar 25 Percent With Smart Rev Management

Nestled on 12 acres of lakeside grounds in Cary, N.C., The Umstead Hotel and Spa is the only Forbes Five Star, AAA Five-Diamond full-service hotel in North Carolina—making it the most expensive hotel among a sea of three and four-star properties. In addition, the hotel’s location in Research Triangle Park, one of the world’s largest research and development centers, means that most of its weekday business comes from corporate travelers. To offset this during the weekends, since Cary isn’t a typical tourist destination, the hotel earns revenue by attracting locals—individuals from within a 100-mile radius of the hotel—who stay at the property to celebrate special occasions, such as weddings, anniversaries and birthdays.
“One of our biggest and toughest challenges is to both compete and not compete with the neighboring three and four-star properties,” said Jeremy Gonsalves, Revenue Manager, The Umstead Hotel and Spa. “Our rates are almost always $100 more than the competitive set, so finding that appropriate piece of business that brings us greater value is critical to our success.”
Forecasting by Market Segment
Because of its distinct market segmentation—corporate guests during weekdays and leisure guests during weekends—it was critical for The Umstead Hotel and Spa to find a revenue management system that could forecast unconstrained demand by market segment. After experiencing a system that allowed for little flexibility and control of room rates, The Umstead Hotel and Spa decided to partner with IDeaS Revenue Solutions to implement the IDeaS Revenue Management System (RMS).
“Because we experience a flip in segmentation, we really like that IDeaS RMS lets us yield to certain segments,” said Gonsalves. “By tracking and monitoring booking pace for each segment, the system enables me to more accurately forecast demand and determine the best pricing recommendations for each type of guest.”
The system also saves Gonsalves a significant amount of time and energy. By automatically assessing hotel performance on a daily, weekly, monthly and annual basis, the IDeaS RMS allows Gonsalves to quickly compare rooms sold and revenue against data at the segment and total hotel level—allowing more time for making smarter, more strategic revenue decisions for the hotel.
Seeing Green
“IDeaS has been a terrific resource for the hotel,” said Gonsalves. “Thanks to the system, I have more time to explore and really understand our booking trends and how to manipulate demand to increase revenue. That’s something I couldn’t do as well prior to using the IDeaS RMS, and it’s had a very noticeable, positive effect on our occupancy and bottom line.”
Since implementing the IDeaS RMS in 2008, The Umstead Hotel and Spa has realized significant increases in occupancy, Average Daily Rate (ADR), and Revenue per Available Room (RevPAR). Occupancy jumped 8.1 percent, ADR rose 16.1 percent, and RevPAR increased 25.2 percent.
“Overall, IDeaS has equipped us with a more scientific way of looking at and determining guest value,” said Gonsalves. “This, combined with the system’s powerful reporting capabilities, has given us a stronger culture of revenue management, which we will continue to build upon and improve in the future.”
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