With ten years under their belts already, Germany’s Big Mama Hotels have big plans ahead. With legendary hybrid and hostel properties operating in Berlin and Leipzig, the German group is planning to open several new properties over the coming months and even have an eye on London in years to come.
We spoke to Chief Commercial Officer Tobias Koehler about how new technology has transformed how they run their business and how it is allowing them to scale up.
Old school frustrations
“We’re scaling up and building a tech stack that can help us do just that…so not only do we need systems that are easily scalable but we also need ones that are easy to maintain. Low skilled employees are a reality of our industry so the technology we choose needs to be intuitive and easy to navigate…but, to be honest, guests are no different! They also need seamless tech that just works!
Our journey all started with switching to Mews as our PMS a few years back as, amongst many things, they are deeply integrated with partners and these deep two-way integrations are really important to us. It allowed us to start to adopt truly innovative platforms and a revenue management system (RMS) was first on the list.
In my former job I worked with the two legacy RMS vendors - they were both big heavy machines where, at some point, I would always get lost in the complexity of it all. With Pace, it’s nice to finally have a platform that is straightforward and easy to work with and boosts our ADR automatically. Like many businesses post pandemic, we also have a small team so I am often doing several jobs at once. Again, Pace has been invaluable in this regard.
Having experienced the old school systems, it’s awesome to have software updates pushed out regularly and that are stable! In other words, they aren’t constantly sending out hotfixes all the time after updates like so many of the incumbents!
We also love the great customer service! How fast the Customer Success team answers is remarkable! More importantly, the support team has really helped change my thinking towards revenue management. To be honest, it took me a while to understand that they are there to answer my stupid questions! But they helped change two main things in my approach to RM…
First, I’ve ditched focusing on compsets. Pace’s approach of not overly relying on compsets makes total sense and is a massive differentiator. We really shouldn’t be changing prices based on what the competition are doing but rather focus on primary demand. The legacy systems were a real mess when it came to compsets - I had so many rules in place! With Pace, it’s not necessary to set any of those rules and you can let the algorithm work automatically. We have all our properties running on automation and I feel I can really rely on the system .
Second, there should be only one rate to push to our PMS (Mews) and Pace does just that. Previously, we had to constantly push multiple rates to the system which were all interconnected to each other - it was complex, inefficient and bad way to be doing it.”
Instant results
“RevPar is the metric we look at most and, thanks to Pace, our RevPAR is almost back to what it was in 2019 pre-Covid, with some months even outperforming. We’ve learnt to trust the system - sometimes we look at the prices being recommended by Pace and notice that they are out of the range that we would have previously thought were possible but then they sell! So it works!
It’s also been super helpful to have reliable forecasting through Pace. It has really helped us to plan financially in general but Pace’s forecasting has been particularly crucial to us as the German government support scheme for hospitality demands that we submit monthly forecasts based on certain criteria and the support given is tied to that value.
We’ve even been able to analyse how different room categories are performing and to to see whether it is worthwhile keeping dorm rooms or switching to double rooms and private rooms. With Pace, we were able to quickly see that keeping the rooms as dorms was bringing in more revenue, including taking into account ancillary expenditure through any POS. Being able to rapidly shift inventory based on demand is a big thing right now.
In general, we’re not actually big fans of using static pdf reports to stay informed. Of course, it’s great that Pace lets you schedule these automatically by email but what we much prefer doing is using the live view on the Pace dashboard at meetings instead. It’s easy to use and all the information is right there.”
Pace Analytics
“I use Pace Analytics way more than our PMS analytics. Pace is faster to populate, much easier to use and you can dive really deep into the data. With Pace it’s often just one click and you don’t need to create complex pivot tables like other RMS.
For example, earlier I mentioned how we were able to analyse room vs dorm performance and that was only possible thanks to Pace Analytics. Or trying to understand what kind of ADR an OTA is delivering and on what dates they deliver that. Do they deliver on high demand days or low demand days? You can go really granular.
Before I arrived we had more of an occupancy strategy but now we have shifted to more of an ADR strategy and good business intelligence is increasingly crucial. Even though RevPAR is our main metric now, we hope to be able to use things like ‘revenue per square meter’ and having a proper BI tool that allows that is priceless.
When the time comes, I’m just hoping the Pace Analytics team filters out the pandemic years by default so our ranges can make sense again!”