Hotel Online  Special Report

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Hotel Company Sharpens Channel Management for 22%
Increase in Average Length of Stay for GDS Bookings,
14% Jump in ADR

Silver Cloud Inns’ Revenue Generation Formula: Add Corporate Revenue Manager; Team with Channel Marketing Provider VIP International; Target Repeat Business, Corporate Markets to Cushion Against Irregular Economy

June 2003 - Silver Cloud Inns faced a challenge: most of their properties serve the Puget Sound and Portland area corporate high tech market, a business segment hit hard in the economic downturn.  The company’s management team analyzed their markets and decided that, by increasing their guests’ average length of stay, they could compensate for the general decline in business travel; but how could they make that happen? 

“About 70 percent of Silver Cloud Inns’ business is corporate, and we compete against limited service, midscale chain properties in our area,” said Brian Zuber, COO of Silver Cloud Inns, a privately held, Bellevue, Washington-based hotel company.  “At the beginning of the year, we made a decision to focus on increasing our average length of stay to boost revenue; and we wanted to improve our availability for guests staying longer than a typical two or three night stay.  We turned our attention to our GDS channels and worked with our channel reservation sales partner, VIP International, to fine-tune how we were working through travel agent consortia and negotiated rates.  With their help, our January over January GDS numbers were up 22%.” 
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Silver Cloud Inns, founded in 1980 as a small family-owned company, has grown steadily to become a strong midscale chain with 11 properties and three under development.  Most Silver Clouds Inns are at the upscale end of the limited service segment that appeals to traveling professionals and, increasingly, to leisure guests.  “Although most of our hotels are limited service, our direction is toward developing high profile properties, like our new Capitol Hill Seattle Hotel, that appeal to a higher ADR clientele.  We are unique in that we have been able to build market share rapidly and grow in the slow economy,” explained Zuber.

Silver Cloud Inns’ revenue manager developed and coordinated a strategy with VIP International to increase average length of stay and raise the average daily rate.  VIP focuses on driving revenue for its partners by generating room reservations, optimizing rates and co-developing selling and positioning strategies with their clients.  Brian Zuber explained, “We began working more closely with our Revenue Manager at VIP to put together the GDS and travel agent consortia components of our strategy, which is to maximize guest stays and increase RevPAR.  She closely monitors our Internet sales activity and analyzes our monthly productivity reports highlighting recent reservation trends.  With her hands-on help, our ADR jumped 14 percent for Internet channel bookings in January and February over 2002 numbers.“ 

For the first quarter of 2003, Silver Cloud Inns realized a 20 percent increase in average length of stay in GDS bookings for the same period in 2002 resulting from a sales plan that cut back on hard availability closes, and rewarded guests who stayed longer with lower weekly rates.  Working with VIP, Silver Cloud Inns learned they often had weeks with five nights of 60 percent occupancy, and two nights of 100 percent.  When historical reporting revealed that a predictable number of cancellations occurred on the sold out nights, the company began aggressively selling across the sell-outs for longer-stay reservations. 
 

“VIP International also fine tuned the consortia strategy so our properties have a presence in the most appropriate organizations for their markets,” noted Zuber.  “Each travel agency consortium is used by a unique mix of businesses and has a different number of travel agencies.  Our vendor knows the positioning of all the major consortia and, based on 
Silver Cloud Inn
2317 N. Ruston Way
 Tacoma, WA 
our segment focus, recommended specific companies for us.   They gave us an introduction to each consortium and explained their business focus.  They also managed the consortia process so we only had to fill out one information page per property to load our hotels.  Without their help, we would have filled out a 50-page RFP for each consortium.  Since VIP has a dedicated specialist handling consortia, we have been very successful with the consortium like American Express, Carlson, and Business Travel Incorporated. We opened our new Tacoma waterfront property in a very competitive hotel market, and have been able to build our GDS market share rapidly through consortia participation.”

Seven years ago Silver Cloud Inns had no GDS presence at all, and was limited in where it could go with travel agents in the corporate market.  “We brought our channel marketing provider on board to increase exposure to travel agents and corporate markets.  Their team supported our growth as we slowly rolled properties on.  Over the last two years we are growing same-property sales by working with corporate accounts through our GDS channel via marketing preferred rates.   I’m impressed with VIP’s ability to handle 20 consortia programs and streamline that entire process; and the individual attention we receive from their client reps. It feels like we have our own GDS revenue manager working for us in Calgary.”

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Contact:
Silver Cloud Inns & Hotels 
103 118th Avenue SE
Suite 300
Bellevue, WA  98005
Local Phone: 425.637-9800
E-Mail: [email protected]
www.silvercloud.com

VIP International Corporation
Contact: Rita Emmer, Vice President, Sales
5th Floor, 727 - 7th Avenue S.W.
Calgary, Alberta
Canada, T2P 0Z
Sales & Marketing: Inside North America: 1-800-327-1847
From outside North America: +800-4448-2900 
Local Phone: (403) 269-3566
Fax: (403) 266-5228
E-Mail: [email protected]
http://www.vipintcorp.com



 
Also See Interstate Hotels, Candlewood Suites, Regal Hotels, Canadian North Airlines Shift Call Center Responsibility to VIP: Interstate To Pass Along 8% to 10% Savings to Properties; Regal Hotels up 26% / May 2003
Zero Transaction Fees: Independent Hotels, Chains Profit from Landmark Agreement; Manage Discounted Rooms Through Central Res Systems at No Cost / May 2003
Interstate Hotels & Resorts Signs Five-Year Agreement with VIP International to Outsource Call Center; Expects to Pass Along 8 Percent to 10 Percent Savings, Increased Revenue to Hotels / April 2003
Hong Kong’s Largest Hotel Operator Sees Reservation Numbers Jump 26 Percent In First 10 Months of 2002, Increases Global Presence with New Reservation Sales Provider / February 2003
Canadian North Chooses Calgary-based VIP International to Provide Voice Reservation and Support services / January 2003
Midwestern Chain Targets Value-Conscious Senior Market; Picks New Channel Marketing Provider to Power Goal of 100% Increase in Bookings / January 2003
Midwestern Management Firm Gains 69% Increase in GDS Reservations YTD at 12 ‘Enhanced Limited-Service’ Properties / Dec 2002
Texas-Based Hotel Chain Captures 104% More GDS Reservations YTD, Speeds Ahead of Economy / Dec 2002
Four Star Calgary Hotel Reports 42% Increase in Bookings During Initial Period With New Channel Marketing Provider / Nov 2002


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