RAR Hospitality (RAR) was tasked with turning around a small hotel that had been mismanaged by the same company for 25 years. The previous management company operated in a time warp with a lack of understanding about revenue management, outdated systems, passive sales and marketing efforts, no HR program, and an underwhelming 60 percent penetration of the market. Ownership turned to RAR because they knew that Bob Rauch, the company president, and his company have had terrific success with getting troubled assets on the right track.
The first thing our team did was to evaluate the GM and it was clear that he was not qualified to run the property up to RAR’s professional standards. We identified a new GM who was aligned with our management philosophy and we hired a sales person to attack the market aggressively. We drastically improved the quality of training in housekeeping, engineering, and at the front desk to provide for an excellent guest experience while providing team members with a property of which they could be proud.
Our digital marketing expertise resulted in a new website designed to showcase the property and drive direct booking; regular eblasts and newsletters targeted to key demographics, key accounts, and past guests; and a social media program that takes advantage of the most popular social media platforms and uses them strategically to land new business.
The first year under our management, occupancy increased drastically from 47 percent to 65 percent with no loss of average rate. During the second year of management we drove rate up 5 percent while boosting occupancy to 70 percent and we have maintained or exceeded that level of occupancy with no franchise or affiliation agreement, a strong gross operating profit, and record revenues. By the end of our second year of management, the property hit its highest Revenue per Available Room (RevPAR) ever and the future looks to continue this trend.
Ownership has been thrilled that cash flow improved markedly so that major capital improvements could be undertaken including major renovations to all areas of the property, extensive maintenance to the plumbing systems that were long overdue, and upgrading the wifi system for increased guest satisfaction. This century-old jewel has never looked so good and it is poised for continued rate and occupancy growth in the coming year.