Renovation and sale

Initial position

The owner of an upscale resort and new to the industry commissioned us with the renovation and sale of their operation. The hotel situated in a German low mountain region had already been in increasing difficulties for some years: In spite of the excellent wellness and conference offerings, the occupancy of the rooms lay at less than 50%. Hence, revenues and costs were in a striking disproportion and the operating profit was already negative.  
 

Goal

The goal was the short-term development and realisation of operational renovation concepts. In the middle and long term, a succession planning or sale was targeted.  
 

Action

In the course of an intensive, onsite review, detailed conversations with the decisive staff were conducted and the revenue and cost structures were analysed. Special attention was placed on the analysis of the client structure as well as on the price and the distribution policies. With this, it became quickly evident that the central problem of the hotel was their incorrect positioning. Consequently, the price level for this location was too high by far, the accessible target group was too small and as a result, the occupancy was too low. It was obvious that the necessary, compelling revenue increase could only succeed through the opening of new guest groups with prices that were in line with the market demands. Even with immediate implementation of these concepts, as was very clear, it would be after four to six months at the earliest before success could be felt. The immediate improvement of the operational results was only possible through additional cost savings. In order to implement all measures linked with this immediately and strictly, we established an onsite, interim manager who had many years’ experience as a hotel general manager and together with him, implemented the concepts on a daily, weekly and monthly basis.  

Process support with the financing bank for the monitoring and documentation of the progress was taken over. For the entire period, HOTOUR was in contact on the behalf of the owner with the department managers at the hotel and the bank

 

Result

Considerable occupancy and revenue increases could be registered through the restructuring of the marketing and sales activities. The average room occupancy rose by an average of 12% points per month after the measures came into effect. Accompanied by the necessary cost savings, the operating result could be improved overall by just around 10% points. After the renovation had been conducted, HOTOUR continued to support the owner in connection with the successful sale of the real estate.