IHG | Case study Arcadia

IHG’s systems & tools drive revenueOverview

Gerhard Finster, Managing Director of Arcadia Hotelbetriebs GmbH and european Chairman of the iHG Owners Association, conducted an experiment in 2012 which proved that the systems & tools that iHG provides to franchisees work.

Arcadia Hotelbetriebs GmbH is a long-standing interContinental Hotels Group franchise partner and a great success story. As part of the fast growing Holiday inn and Holiday inn express brands, Arcadia has hotels in Germany and Austria. These include the Holiday inn München Süd, Holiday inn express Gütersloh and Holiday inn Salzburg.

The relationship sees Arcadia continue to grow and expand. recently, iHG and Arcadia have announced that they will be developing five new Holiday inn express hotels as part of a multiple development agreement. The first of these new Holiday inn express hotels will open in Osnabrück in early 2015. This new hotel will be centrally located near to the main railroad station, featuring 152 guest rooms and two conference rooms.

iDeAl ADOpTer

Gerhard Finster is Arcadia proprietor and Managing Director. He has always been an active and enthusiastic member of the iHG network. Currently, Gerhard is chairman of the iHG Owners’ Association in europe, a collaborative partnership between iHG and the owners and operators of over 3,000 hotels worldwide. Two years ago, at the iHG Owners & General Managers conference in Cairo, he made an important and highly strategic decision that has greatly benefited his business. “i took the brave step to use all of iHG’s management tools. i wanted to actively share my experiences with other owners. i felt we were the ideal partner to use these tools as we have a mixed range of hotels – from an old, larger hotel to new build. This makes us an ideal ‘test subject’.”

Since implementation, the Arcadia management team has been uniquely well positioned to talk about the benefits of the comprehensive range of iHG revenue management, sales, marketing and corporate responsibility tools. These have provided quantifiable benefits including improved service levels, greater revenue generation and proven cost savings.

Arcadia

CASE STUDY

Holiday inn express Guetershoh, Germany

Gerhard Finster, Managing Director of Arcadia with Matt luscombe, Svp Sales & Marketing europe, iHG

Improved performance due to the sales training, the tools available and the IHG sales portal.

inCreASeD revenue

Adoption of iHG’s revenue Management for Hire programme helped enable Arcadia to improve yield management and pricing strategies, contributing to a healthy 23% growth in revenue over two years, and rGi growth of close to 5% in 2012. “This is a powerful and effective tool, helping to drive revenue growth of €1.8m for our business. i can recommend it to all hotel owners” says Finster.

recently, Arcadia has adopted perFOrM, iHG’s proprietary yield management system, including the market-leading price Optimisation tool, providing a price point recommendation for 350 days. The benefit of these systems typically drives net revpAr (room revenue minus cost of sales) by 2-4% in participatng hotels. Furthermore, Finster sees iHG’s recent announcement to provide perFOrM free of charge to its owners in europe as a very positive step. “This is the right thing to do and will reward hotels that adopt perFOrM with dramatic improvements in revenues.”

SAleS iMprOveMenT

Arcadia has successfully adopted iHG’s range of sales tools and services to improve performance. An example is the recently launched wiSH, wAnT, wAlK grid which helps hotels to think more strategically about their rFp sales negotiation strategies. This integrated approach between on and off property sales teams is hugely beneficial to iHG’s corporate customers, and has helped Arcadia to drive rate increases and revenue share growth well above the average achieved by european hotels. Mr Finster is proud of the improved performance. “This is down to the sales training, the tools available and the iHG sales portal. what better proof than the results. especially, it is the trust between the hotel and the regional sales people that has worked very well.”

FOCuSeD MArKeTinG

Arcadia has utilised iHG’s range of marketing tools and loyalty schemes to target potential customers more effectively. For instance, Arcadia has leveraged the advantages of iHG’s priority Club for frequent stayers, along with using Genysys plus for the production of local marketing collateral.

Green CreDenTiAlS

Arcadia has found significant benefits by adopting iHG’s energy saving tool, Green engage, which costs just $50 per hotel per month. Despite a challenging market, with rapidly rising energy prices globally, the hotel group has enjoyed 15% energy savings in two years. This includes a saving of 14% in energy expenses across its three hotels. This is a total saving of €140,000. “That is a lot of money, so i’m really glad we implemented Green engage” states Finster.

COnTinuAl iMprOveMenT

iHG is continually listening to its hotel owners and, in particular, honing products and services. An example of this is the launch of Hotel Solutions, providing hotels with a single gateway to access the information they need. Gerhard and his team at Arcadia have beta tested the new system. “The great thing is that you have access to every single bit of available information that you require in a single system. it is working very well.”

The last two years have been very successful for Arcadia. in partnership with iHG, the hotel group has seen revenue gains of between 11 and 38% and Gops of 8-15%, growing three times quicker than average performance.

As Gerhard Finster states, adopting the best of iHG’s expertise, support processes and best practice has “been a very profitable thing to do.”

Together iHG and the Owners Association are committed to delivering the strongest portfolio of brands along with tools and systems that increase hotel value and owner margins.

The hotel group has grown three times as fast as the average performance in terms of revenue share gain.

...the hotel group has enjoyed 15% energy savings in two years.

The IHG Owners Association enables us to work closely with our owners, tap into their combined expertise and take action more quickly and effectively than our competitors.

Richard Solomons, CEO, IHG