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Resort Achieves Double Digit Growth with Unified Revenue Management

Montage Hotels & Resorts is a luxury hotel and resort management company with five different destinations located in California, Utah, Hawaii and South Carolina. Founded in 2002, Montage offers a collection of distinctive luxury hotels that provide a comfortably elegant experience for all guests.
In 2011, decision-makers at Montage recognized that a unified revenue management system was necessary to standardize and centralize planning, forecasting and the management of funds across the organization. Prior to this initiative, each of the five locations utilized its own revenue management application, which created data silos and limited forecasting to just one property, rather promoting a holistic view of the enterprise. With anywhere from 26 to 42 different room types at each location, it was critical that the new system possess the necessary flexibility to accommodate the distinct needs of all five properties.
Montage selected Infor EzRMS, a fully automated revenue management application developed with industry-specific forecasting and planning capabilities. The company initially implemented the system at its Laguna Beach location in November 2011 before expanding to the Beverly Hills property shortly thereafter, and then subsequently its locations in Utah, Hawaii and South Carolina. Goals for the project included deploying rate changes quickly and accurately, and placing more focus on strategy and data analysis over manual processes. Montage also wanted to drive incremental revenue and Revenue per Available Room (RevPAR), and enable easier, more accurate reporting for all departments.
Achieving results and faster rate changes
Although they have vastly different business models in each Montage location, the new technology solution proved to be an effective tool across the brand. Prior to implementation, deploying rate changes was a completely manual process that took approximately three to five hours due to the number of different room types. Through its new application, Montage can now complete rate changes in a mere 45 seconds. Additionally, the company has achieved double-digit growth in incremental revenue and RevPAR due to greater visibility across a number of key revenue- impacting factors including group reservations and historic cancellation patterns.
The new solution integrates with existing applications to reduce data silos and provides a user friendly interface that allows Montage employees to quickly and easily make necessary changes in the system. This has helped to eliminate manual processes by automating the exchange of critical data between properties and departments, allowing the company to spend more time focused on achieving larger business objectives.
The company’s previous system lacked flexibility and the functionality to customize reports, making analysis difficult and time consuming.  Now, Montage is equipped with an agile, easy-to-use system that takes into account the cause and effect of numerous contributing factors, such as open and close rates, to more accurately project results. Users can easily drill down into data to locate the information they need and create custom reports utilizing data across multiple business units.  This promotes greater operational efficiency and more informed decision-making, as managers can rely on accurate, comprehensive reports to determine the best go-forward strategies for the organization.
Montage maintains a goal to achieve plus or minus five percent forecast accuracy for each of its forecast periods.  Since deploying Infor EzRMS, the company has shifted to a 21-day forecast model and has successfully met this objective. Montage now benefits from significantly more accurate arrival and departure forecasts, which are essential, particularly in the winter months, as several of its locations exist in highly seasonal markets.  Enhanced analysis and drill down capabilities have also enabled the company to optimize staffing levels, ultimately resulting in cost savings.
Preparing for the future
As a result of this project, Montage is equipped with an adaptable, standardized revenue management application that can evolve and grow as business needs change. With significant success and the system’s demonstrated ability to facilitate tangible results regardless of business model or destination, decision-makers plan to utilize it at new Montage locations in the future. By enabling clear insight into metrics and historical data, this project opened up a new way of thinking for the company that will continue to serve as the catalyst for growth and improvement for many years to come.
Andrew Broderick is the director of revenue management for Montage Hotels & Resorts. He oversees all revenue optimization initiatives and forecasting for Montage Deer Valley, a luxury mountain resort destination located in Park City, Utah. Prior to his current position with Montage Resorts, Andrew was the Director of Revenue Management for Viceroy Snowmass, a 173-room property managed by Kor Hotel Group. He also held revenue management roles with both Vail Resorts and Omni Hotels.
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