Boutique Hotel Increases Revenue in Midst of Pandemic

Summer 2020 was a tough season for the hospitality industry, to say the least. Smith Travel Research (STR) reports Average Daily Rate (ADR) down 25.9% and Revenue per Available Room (RevPAR) down 47.5% year-to-date as of mid-October. However, in the midst of the devastating effects of the COVID-19 pandemic, there are some hotels that experienced improved performance over this Summer season.

The Avance Hotel, a RevPAR Lobby Hospitality property, experienced an improvement in ADR of 33% and an improvement in RevPAR of 32% this Summer season.

Daniel Loera, President of RevPAR Lobby Hospitality, elaborates on their Palm Springs, CA property's performance, "Many hotels in the Coachella Valley saw an increase in ADR and overall revenue this Summer season.  This is mainly due to reduced inventory and an increase in drive-market demand. However, our Palm Springs property performed particularly well due to several other carefully monitored factors and performance focus points, which most smaller independent hotels often oversee, and I am sure oversee them now more than ever when their greatest concern is keeping their doors open."

We implemented a growth plan rather than a recovery plan.

Mr. Loera continued to elaborate on Avance Hotel's performance focus points, "we knew we were going to face a tough Summer season across all markets.  Our goal was to have a better summer than others within the market. To do so we implemented a growth plan rather than a recovery plan.  For instance, we allocated efforts in marketing campaigns that would generate impressions for properties across all channels, resulting in page views 166% above fair market share, opaque/package bookings 198% above fair market share, and promotional bookings 250% above fair market share.  Avance Hotel also captured revenue share 155% above its fair market share.  Overall, revenues were 25% greater compared to the same time period last year."

In conclusion, hotels should implement a growth plan with concrete corresponding KPIs by exploring conversion segments it may have not considered during "normal" times. ADR and RevPAR growth may not be attainable for most hotels at this time. Performance should be heavily measured by improvements in market share.

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