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Drill down into operational and external data in order to develop a targeted cost reduction action plan.
After a period of significant expansion, our client, a leading European hotel chain, decided to take a closer look at the cost structure of its hotels in order to identify and initiate cost reduction initiatives, notably through lease agreement renegotiations.
Our client therefore sought our assistance to launch a strategic review of its hotel in selected countries, mainly France, Germany, Spain and Italy.
This review involved an analysis of revenue and KPI’s (ADR, RevPar, Occupation rate) of each hotel which would be compared leasing contractual agreement and leasing costs in particular.
We brought together operational, financial and external into on a single dataset created by extracting all data from the client’s Property Management System (PMS), and enrich it with external data such reviews, ratings, geographical location for each hotel. This was delivered into a simple to use, action oriented tool to our client.
We performed dynamic analyses in order to assess the level of lease costs compared to operational and financial indicators (revenue, GOP) or hotel characteristics (location, number of keys, etc.) as to identify hotels for which leasing costs stand out above comparable hotels.
By enabling our client to drill down further using our dynamic tool, they developed a targeted action plan and initiated renegotiations of leases agreements with landlords.