Betting on modern hotel tech and lean operations turned out to be a smart decision that spurred VESTA Hospitality’s growth, even during the pandemic.
In a conversation with Haitham Faris, Founder and CEO of VESTA Hospitality, we find out how he leveraged modern hotel technology and an innovative business approach to expand his company and skyrocket KPIs.
Based in Soma Bay on the Red Sea, VESTA Hospitality manages 52 serviced apartments and luxury vacation rentals across Egypt. The properties’ stylish interiors, high-quality furnishing and great locations have earned VESTA Hospitality a strong reputation and made them a favorite choice for many vacationers.
Bringing a new type of accommodation offering to Egypt
Founded as recently as 2019, VESTA Hospitality introduced a new way of running vacation rentals in Egypt. Haitham and his team envisioned a business that would manage and rent out privately owned apartments and villas. While the market seemed skeptical of this concept at first, it quickly gained popularity during the pandemic. At this time, more travelers were seeking remote getaways and owners were keen on generating income from their real estate.
“In Egypt, many people own second homes and only use them for a limited time every year. On the other hand, there’s not a very good offering of serviced apartments. We decided to approach owners and offer to convert their properties into vacation rentals. There’s no extra work for them because we manage all operations. Of course, they get a share of the rental income, which is likely more than they could generate if they managed it themselves. Everyone wins in this situation,” Haitham explains.
Friends and neighbors were the initial partners. They were happy with the results and as the positive word of mouth spread, more owners kept signing up.
Making hotel tech part of the growth strategy
As VESTA’s portfolio began growing, Haitham and his team decided to leverage modern hotel technology to keep their operations lean and efficient.
“Our founders all have a corporate background and understand the importance of using advanced technology. From the beginning, we looked for ways to automate or streamline our work. That’s how we manage to achieve a turnover of $100,000 per month with ten staff while a big brand competitor down the road from us generates $200,000 per month but has 200 employees,” Haitham elaborates.
Today, they use smart solutions for every area of business. That includes managing, operating, promoting, selling and pricing their diverse portfolio. As Haitham recalls, the Mews PMS was one of the first new systems VESTA implemented. Soon after that, he was on the hunt for an RMS and found Atomize.
Adopting an RMS to maximize revenue
When setting prices for their rentals, Haitham and his team used to face several challenges. Their product is unique in the market. That makes it hard to determine the ideal rate since there are limited reference points. This meant they initially had to resort to trial and error with their pricing. While they were making progress, Haitham knew there was a better way than picking and testing random rates. He decided to implement an RMS.
“When we were researching RMSs, Atomize stood out for a few reasons. First, the idea of being able to automate pricing sounded great. But finally, their team convinced me because they were able to answer all my questions about how their system and algorithm determines rates,” Haitham recounts.
Once Atomize went live at VESTA, recommendations for rates started coming in. At first, the team was unsure when the system suggested $1,200 for New Year’s Eve instead of the usual $300. Despite some doubts, they went ahead with the higher rate and were delighted to get bookings at the higher price.
“After amazing initial results, we were convinced we’d made the right choice. Now everyone fully trusts the system and we rarely reject its rate suggestions. It’s been great knowing that we can rely on Atomize to optimize our prices in real time and help us grow our revenue,” Haitham says.
Efficient solution for continuously optimized rates
VESTA runs Atomize on full autopilot mode. That means the system has full control to set and update rates. Since the algorithm analyzes live market, competitor and internal data continuously, it always calculates the best rates for all VESTA properties. This leaves Haitham and his team more time to spend on other tasks such as attracting new partners.
“We recently hired a commercial director who also oversees revenue management for VESTA now. But in the past, I only logged in to Atomize for about five minutes every week. I checked that all rates look fine and pulled the data on the predicted revenue for the next month. If I saw an odd-looking price, I examined it and quickly overrode it, if needed. But that’s rare,” Haitham explains.
Impressive results for VESTA Hospitality
Atomize has helped VESTA drastically improve its main revenue KPIs. For example, their RevPAR for villas rose from $180 to $210 year on year since implementing the RMS. Their ADR grew from $300 to $400 in the same period.
But Haitham told us about another benefit of using Atomize:
“When I met with a potential new partner, he asked how we intended to price and sell his property. I explained that we use Atomize to determine the ideal rate for any given date. When I pulled up the dashboard and he saw it in action, he was extremely impressed. He also liked the in-depth market and competitor information we get from the RMS integration with OTA Insight. That was one of the reasons he signed with us soon afterward.”
Looking into the future
Being a young company, VESTA is currently focused on attracting new partners to grow its portfolio of rental properties. The good reputation the company is building for generating handsome returns for the owners will certainly help with this.
“Growth has been solid over the last couple of years and we’re optimistic for the future. We’ve been able to keep operations lean thanks to our investment in tech and can offer value to both our guests and partners. Now, we’re working hard to attract more high-profile owners to expand our luxury offering. It’s good to know that we have a reliable partner in Atomize who supports us along the way. I recently heard about new developments they’re working on and I’m excited to know they’re eager to keep innovating. It’ll be great to try the new features soon,” Haitham concludes.
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