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As part of the country’s largest hotel management company, Interstate Hotels & Resorts,
Sunstone Hotel Investors manages 51 mid to upscale hotels with more than 12,300 available
rooms across the United States, encompassing more than 15 different brands.
Sunstone Hotels has more than $1.8 billion in market capitalization and is a publicly traded company.
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In 2001, Sunstone had a major opportunity as it relates to revenue management practices within their portfolio. While they had all the individual brand tools to utilize from hotel to hotel, it was clear that improving forecast accuracy, premium mix and subsequent average rate was a priority no matter what tools were being utilized. The Intercrew Systems Revenue Forecasting Tool & Sell Strategy Module was the right choice for implementation throughout all of Sunstone Hotel Investors portfolio.
The impact of this investment was felt immediately. The forecasting of segmented day by day room revenue instantly became more accurate. Over the course of the next six months, the companies room revenue forecast accuracy was within an astonishing 1% at the company level. This day by day forecast accuracy allowed much more effective yield management of the guest room inventory, which resulted in improved premium mix, average rate and a subsequent growth in market share.
Robert Resurgent, Sunstone Hotels Corporate Director of Revenue Management, says “I attribute our incredible forecast accuracy improvement to Intercrew Systems Revenue Forecasting Tool. Over the past five months, we have had a forecast variance of just 0.98%, which represents the best 5 month stretch we have ever had”.
The Revenue Management Tool also allowed Sunstone Hotel Investors to analyze and strategize all of their hotels via the same reports and processes, no matter the brand affiliation. Sales and Revenue Management deployment efforts, hotel sell strategies and retail price positioning all became much easier to establish, ensuring the highest level of efficiency and returns. Group sales efforts could now be deployed toward the market segments with the most opportunity by using the RFT. And through the use of the RFT, retail pricing could now be set to maximize RevPAR, not just ADR or Occupancy, but both. Revenue Managers at Sunstone are now deployed to handle 3-5 hotels each, saving the company up to a million dollars in salaries per year and has been able to attract some of the best revenue management talent in the industry, while also ensuring that each hotel has best of breed revenue management practices.
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Sunstone Hotel Investors has also linked the RFT and SSR tools to their accounting system. This populates budgeted and forecasted room revenue data, generated from the tools, directly into the accounting system that forecasts expenses and other revenues that are based upon rooms sold. The ICS tools are also being used to provide Smith Travel Research the appropriate STAR and DaySTAR data in an automated process, saving a great deal of time and money.
Sunstone Hotels is now consistently forecasting room revenue within 1% of actual revenue. Every hotel in their portfolio is part of a uniform sell strategy meeting process. Analysis of trends and implementation of new strategies is now easier than ever before, whether the hotel is a major branded hotel or an independent. RevPAR growth is consistent throughout the portfolio. 16 revenue managers are handling all aspects of revenue management for all 51 hotels, averaging more than 3 hotels per manager reducing payroll by almost half. The caliber of revenue managers hired has gone up exponentially since the implementation of the tools. Multi-unit and multi-brand experienced revenue managers are now regularly inquiring about job opportunities. Sales deployment efforts, at both the hotel and national levels, have been amended so as to ensure sales efforts were never in the wrong market segment. RevPAR growth has been achieved simply by managing existing demand patterns with more efficiency, allowing newfound demand through the sales & marketing efforts to be the icing on the cake!
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