VIP International Inks Strategic Alliance with Buckhiester Management to Optimize Profitable Revenue for Operators
Paul’s Motor Inn and Laurel Point Inn Pull Away from the Pack with 75% Profitability on Boosted Revenue
Calgary, Alberta, Canada | In a move that gives operators a proven systematic way to reach higher profitability and increase the value of their hotels, VIP Investment Corporation today announced an exclusive strategic partnership with Seattle-based Buckhiester Management USA, Inc., a revenue management industry leader. The first-of-its-kind accord combines VIP’s channel distribution and sales leadership with Buckhiester’s...
Calgary, Alberta, Canada | In a move that gives operators a proven systematic way to reach higher profitability and increase the value of their hotels, VIP Investment Corporation today announced an exclusive strategic partnership with Seattle-based Buckhiester Management USA, Inc., a revenue management industry leader. The first-of-its-kind accord combines VIP’s channel distribution and sales leadership with Buckhiester’s structured REVolution™ business process and revenue management toolkit in one turnkey solution for significantly increasing revenues. Participating VIP clients will have access to Buckhiester’s REVolution™ combined with VIP’s ongoing channel management and professional sales support.
REVolution™ Tools from Buckhiester
Effective immediately, VIP will offer its clients Buckhiester Management’s one-of-a-kind REVolution™ toolkit, which is a proven methodology that includes workshops, practical application decision support tools, follow-up and coaching to train hotel operators in revenue management. The REVolution™ process focuses on:
- Product Definition – Understanding what kind of hotel you are, what market you want to attract and if you are aligned with your customers’ needs;
- Competitive Benchmarking – Establishing competitive-set comparisons that guide price setting to gain maximum revenue for each market;
- Strategic Pricing – Refining rates to optimize all of a hotel’s distribution channels;
- Business Mix Manipulation – Matching segmentation strategies with the new ways different consumers buy rooms, and optimizing each property’s segment blend;
- Demand Forecasting – Developing rate management and stay controls based on historical demand, current market forces and future trend information;
- Distribution Management – taking distribution beyond channel management to optimize every manner in which the product is sold.
Paul’s Motor Inn, Laurel Point Inn Overall Revenue Rockets $550K on 75% Profitability
Laurel Point Inn in Victoria, British Columbia, first partnered with VIP International in 1991 for GDS connectivity and was joined by its sister property, Paul’s Motor Inn, in 2001 when Buckhiester Management was brought in to train Laurel Point’s managers. VIP’s initial role was to manage the vast range of Internet channels and simplify how they communicated inventory and rates. Avril Matthews, revenue manager for both properties, explained, “We used to send dozens of faxes every day notifying the large number of Internet companies selling our rooms about rate and inventory adjustments. The first thing VIP did was provide access to the GDSs. In 2001, we began using their technology to consolidate communications and update all electronic channels with one access point.
This saved us a great deal of time and made our online offering more accurate. It was a big step, and allowed us to instantly maximize our rates and availability across all four seasons. When I input a season now I set parameters based on our corporate rates for each individual market to keep revenue up. After our Laurel Point Inn training we decided to run both properties’ reservations departments out of the same office so that we could apply our new understanding of revenue management to Paul’s Motor Inn.”
Paul’s Motor Inn saw its Internet reservation segment jump 47 percent in 2002 year-over-year.
The two sister properties have been using the combined services of VIP and Buckhiester Management for three years with stellar results. Avril Matthews continued, “We started using Buckhiester’s REVolution™ toolkit alongside VIP’s channel management in 2001. Although the two companies were not partnered then, after one year of working with both companies we showed an increase of $550,000 in revenue over the previous year, in spite of a plunging economy. The following year we increased another $500,000 year-over-year; but the best part is our profitability on the increased revenue was 75 percent. We continue to perform very well compared to our market.”
Matthews explained that the unique Buckhiester process is customized for every property owner and that, before their REVolution™ training began, Laurel Point Inn’s entire rooms division management team was interviewed. “We were asked where we are now, where want to be and what our goals are,” Matthews continued. “They showed us key markets we had not considered and we learned how to price each market separately plus optimize our segment participation. Discovering ‘micro markets’ was important to us because our transient segment, for example, is composed of government, seniors, AAA, and negotiated corporate rates, each with different revenue potential. Understanding our strategic pricing was the turning point; for us it was huge.” Laurel Point’s team was coached in how each micro market has different stay patterns and how accurate demand forecasting can help protect availability for higher rated segments to maximize revenue and occupancy. “Buckhiester’s training was a logical step-by-step process over a period of months. They taught us how to spot individual markets and how to participate in them across all our seasons. Buckhiester educated our managers in a comprehensive process that optimized the tools we already had, like VIP’s channel management and reservation technology.”
New VIP Business Unit: Revenue Management Professional Services
VIP President Kelly Blake said a new Revenue Management Professional Services (RMPS) business unit will eventually be formed within VIP to provide the benefits of the strategic partnership with Buckhiester Management to its clients, giving VIP four specialized divisions: CARS, hotel, airlines, and RMPS. Blake underlined his message to operators, “If you are not profitable, you definitely need the Buckhiester Management tools we are offering. If you are profitable, you need to ensure these skills are finely honed to stay ahead of your competitive set.”