Perth hotelier uses technology to grow in the downturn
- 30 July, 2009 11:25
The managing director of two upscale hotels in Perth attributes his ability to grow revenue in a downturn to the technology he has installed.
Andrew Slomp, Managing Director of Quality Resort on Sorrento Beach and Clarion Suites on Mullaloo Beach, has recently installed Cisco wireless routers, IP phones and antennas to both of his properties which, he says, has helped him continue to grow his business in a difficult climate. The two properties currently turn over about $5 million a year combined.
“With the downturn we have seen a 7 to 10 per cent decrease in the amount of people staying but at the same time our revenues have gone up three per cent. That is probably a trend that is not very common in this market,” Slomp said.
“In the last financial year, revenues for accommodation in Perth have gone down by 18 per cent and ours has gone up by three per cent which makes a 21 per cent bucking of the trend. From our point of view, the key to increasing revenue is to provide a better service that customers are willing to pay more for and the technology we now have enables us to do that.”
Slomp was the first hotelier in Perth to offer a secure wireless broadband connection to guests at his Sorrento property four years ago, although he was not happy with the level of service from his local IT consultant.
“Not being technically oriented, it all sounded good to us, and it was good . . . for about three months. And then it was two years of trying to bandaid something that didn't work properly.”
Approximately nine months ago Slomp turned to IT services company and Cisco partner, Kytec, to overhaul the technology in both of his properties so that he could offer guests the reliable broadband that he promised.
Slomp invested in several Cisco technologies including Aironet 1300 Series Access Points (for outdoor), Aironet 1100 Series Access Points (for Indoor), 2800 Series Routers, Callmanager Express, the 7900 Series IP Phones, 2960 Series PoE Switching and Catalyst Express 500 Series Switching
With his new secure Internet set up, Slomp has moved his reservations on to the Internet and now offers a seamless reservation system. He estimates this saves him about $65,000 a year.
“I think we are one of only five properties in Australia that has seamless reservation. Basically, there is an interface between our reservation system and the outside world so that our system automatically feeds with external booking websites in real time,” he said.
“A year ago if someone wanted to make a reservation at either of my properties they would have to call or email. An email reservation might take three or four days to complete by the time you email back and forth.”
Even though Slomp previously used online travel agencies it was still a time-consuming and inferior process compared to what he offers now.
“We had to spend the time to go to each individual site and enter information about our room vacancies. Then, when a client reserved a room through one of the sites he or she would get immediate confirmation but we would not be notified until a couple of hours later.”
Although Slomp is in the process of working out his cost savings from replacing all of his fixed lines with IP phones, he has already noticed the extent to which this move has freed up his front desk staff. This has resulted in the average revenue per room increasing from $130 a night to $170 a night in the six months since the Cisco network was rolled out.
The new IP phone set up means that calls can be made directly to and from guests to each other and the outside world without needing to go through reception.
“If my staff are freed up because they don't have to do so much phone transferring they can spend better time with the guests. The trickle on effect is that the guests more satisfied with the service and happy to pay more for it.”
Slomp said that there has been a four-fold increase in the amount of guests using the wireless service since his Cisco rollout. He has seen revenue for this service jump from $500 a month to $2,000 a month and a return in investment in the six-month period.
The other added benefit of the new network was that the hotels were finally able to meet the rigorous IT requirements of achieving franchise-status with the Clarion and Choice brand hotels.
Slomp admits it is hard for businesses to commit to investing in technology when it affects the cash flow.
“But the other appealing thing for us was that Cisco also offers a financing service (Cisco Capital) which has helped a lot. If we could not have spread the investment out over a period of time like we have through this program we would not have been able to make the purchases we have made,” he said.