Remote Island Retreat - A Case Study

Remote Island Retreat

A Case Study

In April 2022, a remote 4* property, located in the Inner Hebrides of Scotland, partnered with Revenue by HRM to address various operational and revenue challenges. Despite its remote and appealing location, the hotel faced significant difficulties due to its accessibility issues and operational inefficiencies

Challenges

  • Accessibility Issues: High travel costs, weather-dependent flights, and unreliable ferries.
  • Staffing Difficulties: Shortage of experienced local staff, necessitating recruitment from the mainland.
  • Operational Problems: Outdated PMS system and a complicated ferry booking engine affecting guest bookings.

Approach - Short Term Strategy

  • New PMS System: Implemented a Property Management System that seamlessly integrated with all areas of the business.
  • Room Reconfiguration: Reconfigured and renamed bedrooms to better match guest expectations and optimize revenue.
  • Booking Engine and OTA Optimisation: Enhanced visibility and ease of booking through various online channels.
  • ‘Book Direct’ Initiative: Encouraged direct bookings to maximize revenue and customer loyalty.

Results - Short Term - within 3 months

  • Net accommodation revenue grew by 47% in the first year.
  • Achieved primarily through increased occupancy while maintaining ADR.
  • Significant increase in food, beverage and golf on-spend.

Approach - Long Term Strategy

  • Rate Strategy Adjustments: Significant changes to rate strategies to meet and exceed budgeted ADRs.
  • Event Capitalisation: Leveraged island events to drive bookings and increase occupancy.
  • Targeting High Net Worth Individuals: Focused on attracting high net worth individuals and residential golf business.
  • Ongoing Support: Continue to optimise rate strategy and support the hotel in mitigating seasonal fluctuations.

Results - Long Term - within 12 months

  • 2023 ADR Growth: Achieved a 22% increase in overall ADR from 2022 to 2023.
  • 2024 YTD ADR Growth: Achieved a further 20% increase in net ADR year-on-year.

Client Feedback

The new owners of the hotel were extremely pleased with the significant revenue growth and operational improvements. Our strategies not only enhanced their immediate cash flow but also established a strong foundation for future success.

Conclusion

Revenue by HRM’s tailored interventions at this island hotel addressed the unique challenges posed by its remote location and operational issues. Our comprehensive approach led to substantial revenue and ADR growth, ensuring the property’s continued success and establishing it as a premier destination in the Inner Hebrides.