Hotel in Luxembourg Focuses on Online Distribution and Nearly Doubles Its Revenue

RegiÔtels initiated a partnership with a 20-room hotel-restaurant in a rural area of Luxembourg to improve its occupancy and revenue.

The property was managed by a chef whose main focus for generating revenue was the restaurant. Due to the combined responsibilities of being a restaurant chef and hotel manager, he did not have time to focus on the profitability or distribution of the hotel rooms, thereby losing potential sales and revenue.
RegiÔtels stepped in as a partner to help this hotelier increase the profitability of his hotel business without requiring more work or taking away from his restaurant business.

Initial Challenges
At the time, the property did not have a channel manager or any technology to optimize reservation management, as the focus was entirely on the kitchen. Therefore, the property could not be distributed across different channels due to the risk of overbooking, which impacted its visibility.
The main mission was to improve room profitability while maintaining a manageable occupancy rate with the limited staff available at the hotel. Thus, revenue growth needed to be driven by increasing the Average Daily Rate (ADR), not by occupancy.

Chosen strategies
The hotel was highly dependent on tour operators, selling its rooms at a low rate and losing potential revenue.
RegiÔtels planned and implemented the hotel’s digital infrastructure, either by implementing systems or offering consultancy on which solutions to choose. The hotel acquired an optimized website, a booking engine, and channel manager solutions to receive direct bookings.
With a channel manager, the property was listed on various OTAs, increasing its reach and online visibility. RegiÔtels helped the client choose the best OTAs for their property based on market research and demand, and also assisted in contracting OTAs to ensure the client did not pay unnecessary commissions.
To drive ADR growth, we implemented a dynamic pricing strategy based on data analysis and competitive research. Dynamic pricing would allow the hotel to obtain the highest possible revenue from each room while also filling its minimum occupancy in advance.
By directing efforts towards online direct business and constant optimization of platforms and pricing strategy, we managed to not only increase the average room rate but also significantly increase the hotel’s overall revenue.

Achieved results
At the beginning of the partnership, the property’s annual revenue was €69,089.00. After three years of working together, revenue rose to €133,986.00. During this period, ADR increased from €19.17 to €58.51, representing an increase of over 200%. A truly satisfactory result.
Aligned with the initial expectations, the client was able to achieve the desired result without increasing the staff’s workload. In fact, as we decreased the occupancy rate, the workload also decreased.
As a result, service quality improved, and the staff was able to focus more on the guest experience.

Key Lessons
What can we learn from this case? We managed to decrease the occupancy rate for better management and increase ADR and RevPAR to maximize profits. The result was more efficient and profitable management, even with a small team.
Are you also facing similar challenges in managing your hotel? Let’s discuss how RegiÔtels can help your property.