Occupancy has gone down everywhere and the winter of 2020/21 was one of the toughest - if not the toughest - in hospitality history. But Lark Hotels and their luxury boutique properties scattered across the US have proved an exception and bucked the trend.
There has been plenty of pent up demand for escapes and Lark’s boutique getaways in iconic more rural leisure destinations were able to weather the covid headwinds relatively well as a result. They have benefitted from customers' switch to more regional staycations in smaller properties and the preference for driving over flying. Furthermore, corporate and group business was only a small portion of their business to begin with so the drop in the corporate travel market has not affected them much. From Martha’s Vineyard to the ski slopes of Vermont to the Californian coast, their properties have seen booking volume double in the last five months alone. Lengths of stay got longer and booking windows got shorter.
How did they do it? Management moved quickly and adapted their offering to include options like whole hotel takeovers with personal chefs and services so that groups of families and friends could use an entire property in relative isolation for long periods of time.
“Pace Pricing boosted ADR by 15% in Q1 2021 at our flagship property Field Guide Lodge while raising our occupancy in comparison to Q1 2020…and that was before the pandemic!"
But beyond smart management decisions, Lark Hotels have also focused on upgrading their technology in the last year and switching to a future-proofed tech stack.
We spoke to Nikola Jasprica - Group Director of Revenue Management - about how moving to revenue management automation has transformed their operations and boosted ADR and occupancy.
“We had been doing our revenue management manually until 2019/20 when we decided to find a modern solution that could automate things and transform our revenue management. The old manual way involving Excel spreadsheets was, in short, not fit for purpose anymore.
We looked into legacy RMS players but the price they charged to get up and running was in the hundreds of thousands and far too expensive. We also wanted something that was more modern and cloud native and old dinosaurs were not that. We then looked at another incumbent cloud RMS but the interface was overwhelming and far too complex and confusing for our needs with all the different rates and channels. It was also far too expensive for what it is.
We then finally tried one of the new RMS startups on the market for six months in a few properties but found it degraded our ADR as well as making our occupancy suffer somewhat. On top of that, we were not fans of the interface.
We then implemented Pace and it was exactly what we were after. We switched on automated pricing in the summer of 2020 and from then on was really easy for me to use. The interface is really slick - it’s easy to see pickup, cancellations and rate changes.
I particularly love the algorithm as it is not reliant on historical data and that’s really been important with the data skews during the pandemic. The RMS competition, for example, pull historical data and it became pretty clear that I could not fully trust the price changes they were recommending as a result. I’m also a big fan of Pace’s scientific approach to constantly running AB testing for their algo - it’s the prudent thing to be doing if one is serious about the science of revenue management.
I think Pace’s focus on primary data and true demand and not on CompSets is the way to go in revenue management. We are still pricing around CompSets on a few properties but the evidence has been clear that the Pace way works so we are already phasing it out in those properties.”
“The onboarding was fast and smooth. To be honest, I could have had all our properties up and running on Pace within one month if I wanted to but we decided to roll it out in stages and over the course of the year.”
“It’s no surprise that lengths of stay have gotten longer and the booking window shorter because of the pandemic. Nonetheless, our booking volume across all our properties has doubled from last year.
Pace Pricing boosted ADR by 15% in Q1 2021 at our flagship property Field Guide Lodge while raising our occupancy in comparison to Q1 2020…and that was before the pandemic! It was a really busy three months and it’s impressive to see how rates are being pushed. Oh and our Florida property just had a record breaking March! In fact, we’ve been pretty much top of the STR reports in all of our locations.
In the end, it’s all about trust when it comes to automated pricing and I have full confidence in Pace. Another small anecdote that really stresses this was when one of our GMs got in touch with me as he thought there was something wrong with the pricing recommendations as one of their rooms was being offered at $1300, which seemed way too high to him. I double checked Pace and it turned out that that was totally the right suggestion as we had sold a couple of rooms just before for $1100!”
Pace Analytics - the perfect partner to Pace Pricing
“Pace Analytics is a powerful new tool that lets you build your own dashboards and reporting in real time. I’m really looking forward to using it more and more.
To give you some examples, I have an automated report going to marketing every week showing lead times so that they know when to push digital marketing. I have another report that gets delivered to our group CEO every day showing pickup. I even have one going to one of our owners with higher level metrics for him to stay abreast of performance.”