Like most other countries, Japan was hit hard by Covid-19. However, the Wayfarer Group’s Kyoto property was able to weather the crisis and outperform compset. Find out how they did it from Frederic Turpin, Revenue and Marketing Manager at Wayfarer Group.
A quick introduction to the Wayfarer Group
The Wayfarer Group’s story begins with the opening of the Wayfarer Hotel Kyoto Shijo, their first property in Japan. Here, travelers can relax in stylish design-led spaces, plan their next experience and immerse themselves in the local community. Wayfarer’s offering is perfectly tailored to their target market of millennial explorers who enjoy low-touch service and want to make the most of their trip.
Several more properties in some of Japan’s top cities are currently in the group’s pipeline. On top of their value-driven approach to service, they will all have one thing in common: an advanced tech stack complete with the best tools available in the hospitality industry.
The pandemic’s impact on Japan’s hospitality sector
Japan has long been a popular destination for travelers from around the world. Pre-Covid, the rate of international guests exceeded domestic demand the whole year-round. Hotels there also experience strong seasonality, a lot of which is dictated by nature. Think of the springtime cherry blossom season and the read leaf season in fall, for example.
As the pandemic spread, travel warnings were issued around the world and Japan tightened entry restrictions. Foreign guests began staying away and domestic travel dipped. Unsurprisingly, this has led to many hotels closing for good.
However, Frederic is optimistic that new stringent safety measures, the vaccine roll-out and vaccination passports will bring back travelers in 2021. Thanks to his innovative tech stack, which includes the Atomize RMS, he’s already making the most of returning demand and is in a strong position to outperform his compset.
The importance of revenue management grows
Frederic remarked that pre-pandemic, revenue management still seemed to play a minor role for many hotels in Japan. However, he’s been seeing a shift recently.
With most businesses on hold and new hygiene standards driving up operations costs, competition is fierce as properties fight for their share of a smaller pie. This has led more hoteliers to look to revenue management to navigate this challenging scenario. Frederic is a step ahead. He has already implemented the Atomize revenue management system (RMS) to keep an eye on the market, his competitors, developing demand and pricing opportunities.
“High-demand days have decreased drastically, and competition is strong, creating a low-rate market. To get through this, we need to add flexibility and creativity to our revenue management approach. Using an RMS is a great start because it helps us understand the market and how challenges are evolving.”, says Frederic.
Shifting from manual data collection to full automation
Before using Atomize, Frederic handled most revenue management tasks manually. This included rate shopping, collating his data, and making daily pricing decisions and updates. As you can imagine, this took up valuable time and kept him from other important tasks. Since implementing his RMS, he lets the system handle pricing suggestions, competitor analysis, and data collection.
“Using Atomize saves me an hour each day which I can invest in strategic work that goes beyond merely adjusting rates. Now I can spend time refining our long-term revenue strategy, creating and testing new offers and examining new sources of business for the short to medium term”, says Frederic.
Competitive pricing in a challenging market
Achieving a good ADR and high occupancy with a domestic-only market base and eager competitors have been Wayfarer’s biggest challenges recently. Atomize proved to be a valuable tool to address this and to outperform the compset.
The RMS makes pricing suggestions in real time, based on live market, demand, and competitor insights for the next 365 days rolling. These recommendations go beyond changes to the base rate and include options for all room types when applicable.
Whenever demand changes or the compset adjusts their prices, the system notifies Frederic and gives him the chance to adjust his rates in just a few clicks. This means he always maintains his positioning and seizes every opportunity to drive business, be it on a high- or low-demand date.
“Using Atomize is like having a 24/7 assistant who tracks and reports on all rate fluctuations and market shifts for the coming twelve months. This helps me keep our rates competitive in low-demand times, and ensures we maximize revenue on high-demand days”, Frederic says.
When looking at STR’s data for Kyoto, it’s clear that the city overall is still struggling with reduced demand. The average occupancy rate was 30.1% in March 2021 which is still 2.9% less than in 2020. The good news is that the ADR for March 2021 was 7.3% higher and RevPAR was up 4.2% compared to the same time last year.
Given these figures from STR, Wayfarer’s KPI improvements are highly impressive. Frederic summarizes their performance;
“Using Atomize to make data-driven rate updates in real time has allowed us to boost our ADR and capture more market share. This led to us continuously outperform our compset by 15% in terms of occupancy in March 2021. That would be an amazing result at any time but given the current circumstances I’m especially happy and optimistic for the future.”
Easy set-up and onboarding
The Wayfarer invested in cutting-edge hotel tech from the very start. This made it especially easy to set up and integrate the Atomize RMS with the hotel’s other tools. Frederic explains;
“Everything went smoothly during the onboarding period and the team quickly learned to use the RMS because it’s so intuitive. The team at Atomize is always extremely helpful and they supported us a lot over the past year.”