Richfield Hospitality Blog

Retrofitted Lobby Venues

May 13, 2015

By: Ellen Callas, Vice President of Operations at Richfield Hospitality

Walk into a new hotel of any major brand and you will be hard pressed to see the front desk immediately. Instead, your senses will go into overdrive with the delicious aroma from the modern lobby café. Perhaps the presence of a hip microbrew bar will catch your eye but undeniably you will encounter gatherings of customers around large communal tables complete with every high tech convenience under the sun. Contrast this experience with entering a 30 year old hotel with a serene entry way leading to a bank teller style front desk and a bland, quiet corridor to the elevator. The new, sleek gathering place lobbies are becoming more prevalent and a very compelling feature providing a significant differentiation to established properties.

With competition for customer loyalty fierce, hotel owners are embarking on off cycle renovation projects and changing the footprint of their hotel lobbies dramatically. The major brands are supporting these efforts by developing retrofit architectural and design schemes for varying sized properties. With installation investments as low as $150,000, these new lobby transformations are not only updating the cool vibe of the hotel but increasing hotel revenues. With average revenues ranging from $3.00 – $6.00 per occupied room, the ROI on these new lobby outlets can be as short as two years.

One only has to walk into a hotel which has undergone a lobby renewal to see that it is not just the millennial customers desiring the new chic niche, but baby boomers as well are just as invested in the communal space. Whether working on laptops and striking up conversations with other customers or grabbing a quick bite from the grab & go offerings, these relaxing and inviting spaces are making what was once a serene lobby experience into an active, exciting place to be. Turning their guest room to a mere part of their living space while visiting the property.

At Richfield Hospitality, we have partnered with the major hotel brands to identify opportunities to upgrade our lobby spaces, bringing our more mature properties in direct competition with the newer fashionable hotels popping up. These retrofitted lobby venues not only drive incremental revenues and customer loyalty but ultimately increase the value of the asset. As we push through the second half of this decade, lobby conversions will be common place. The hotel industry continues to follow the cues of our customers, from unbelievably plush beds, expanded Wi-Fi connectivity to lobby great rooms. But one thing is certain, it is exciting to see where our business and leisure customers will take us in our need to stay connected.

Breaking the Hotel Pricing Model

May 1, 2015

By: Ryan Davis, Vice President of Revenue Management at Richfield Hospitality

Spring is in full swing and with the summer rapidly approaching, there comes an increase in demand for most markets. As hoteliers, we hear the words “increase in demand” and instantly look to increase published rates; however, this might not always lead to the most successful yield strategy. Finding the right mix to maximize ADRs, while maintaining occupancy levels, is critical during these times. BAR contribution, which is the percentage of BAR revenue contributed to total room revenue, should be at 30% or more during these high demand periods. Raising published rates will maximize ADRs, but typically will hurt occupancy levels and BAR contribution, while feeding room nights into the discounted segments. The way we, as hoteliers, have always approached pricing strategies during high demand periods might not be the best way to maximize inventory yields. Breaking away from saying “that is the way things have always been done and how the market does it” is a calculated risk revenue leaders need to take.

Recently, I was on a call where the team was reviewing the pricing strategy for an upcoming graduation weekend. When the inventory calendar rolled over for this set of dates, the market rates were at $450 per night and up. Now that the dates are approaching, the market rates are steadily declining as revenue leaders start panicking to fill in remaining inventory. This begs the question: What if you never needed the panic button? As the team started looking at historical STR data it was clear that this was a repeating market condition. The market always came out swinging with its confidence bat only to strikeout at the bottom of the ninth, with the bases loaded, down by three. Historically, the market sold out with an ADR in the range of $275-$325, meaning the contribution on the $450 per night was relatively low for most properties. While it was too late to use this knowledge for this scenario, it is one example that I run into every day as a revenue leader, and one that we constantly get wrong in the hotel industry.

In the above example, with the historical knowledge, the normal hotel pricing model needed to be broken. Knowing that the market panics, and market ADRs come in at the $275-$325 range, the property would have seen higher BAR contribution by pricing at this range as soon as this inventory calendar opened. Using price elasticity to determine the relative responsiveness to demand – based on the price – is critical in not selling too low at the beginning, or too high as the property approaches a sellout. Ensuring an elasticity factor of positive one or greater is achieved while testing price increases once certain occupancy thresholds are reached. By doing so, the property is able to maximize remaining inventory yields.

All too often we are faced with the above scenario and, more often than not, we go with the market perception instead of the consumer perception since this is the way it has always been done. It is easy to throw the $450 rate out there and hope for the best, but it is a profitable risk to work towards that $450 with a strong occupancy base under you. Achieving this base means putting the best published rate out there, which will build occupancy through BAR, but also looking at a well-thought-out channel strategy to assist – all of which leads to a higher pricing confidence. This channel strategy could include group, package pre-sale and/ or BT strategies to layer in this base. The challenge becomes to throw out the market shop report and use other tools and resources available to develop a strategic channel strategy. The market might call the property crazy, but we will see who is holding the market share at the end of the day.

Changing the Hospitality Industry One Drone at a Time

April 24, 2015

With the spring wedding season upon us, the bride and groom are planning big things for their big day. Among the hottest wedding trends in 2015 are drones: small, pilotless, remote-controlled aircrafts with mounted cameras that take beautiful aerial photographs of the happy occasion.

The demand for wedding drones is growing. Many couples are asking that they be used to capture every moment of their big day. Drones can provide a unique and enchanting perspective of each wedding, unlike anything else before it. They can capture unique aerial photos of the wedding location, both pre-wedding, and during the event. They allow the bride and groom to relive all the wedding festivities in a way that ground photos simply cannot capture. Drones have maneuverability and can be flown to take overhead shots of the wedding location, ceremony, and groups of guests.

Couples are looking for something that sets their wedding apart, and drones give them exactly what they are looking for: Something out of the ordinary, which makes their wedding extraordinary. And drones are not limited to wedding pictures alone. They can deliver the rings to the bride and groom at the altar, or even deliver a special bottle of champagne to the bridal table for the toast.

The benefits of drones to your hotel go beyond weddings. This innovative technology is revolutionizing hotel marketing. Just as they do for weddings, drones offer the ability to capture a unique aerial perspective of your property. You can capture a birds-eye-view of your hotel’s lobby, dining room, meeting spaces, guest rooms and just about every inch of your property. With drones you can create a virtual tour of your property. All of this is fairly inexpensive, might I add. It is especially beneficial in this day and age, when consumers want to test drive everything before purchasing anything, to offer potential guests a comprehensive look at your property. It not only allows them to visualize how the property can accommodate them and their event, but it also gives customers an idea of the great experience in store for them upon their arrival. Drone technology will encourage guests to go beyond simply looking at your property–it will convince them to actually book their event and stay at your property. This ensures that rooms are booked year round, driving sales and revenue.

Drones are on the cutting edge of technology, so it is important to recognize that this technology is still fairly primitive, and currently self-regulating. So there are a few important considerations to keep in mind when considering using a drone for weddings and hotel marketing. Safety is the number one consideration. Make sure that everyone at your property is informed and aware of planned drone flight times. Rely only on experienced drone operators. When flying a drone, never let it out of sight, and always have an area for an emergency landing if needed. Be careful not to fly the drone into a power line, or, God-forbid, a guest’s head. It is a good idea to have liability insurance just in case. Consider the privacy of your guests as well. Make sure they understand and agree to being recorded or photographed, and make sure you have specific permission releases from those guests being recorded by the drone.

Additionally, drones can be quite noisy. So in planning a wedding, consider meeting with the couple beforehand to let them see and hear the noise the drone makes. Also, it may be beneficial to use the drone at the couple’s rehearsal so you can find at what height the drone needs to fly in order to be less distracting, or even unheard by wedding attendees. Even though drones offer newlyweds something exciting and new at their wedding, make sure it does not distract guests from the ceremony. And last but not least: Follow FAA Rules. It is important to obey current FAA regulations concerning drone flying. It is also important to keep up-to-date with any changes the FAA may make.

Industry Trends: Grab-and-Go

March 18, 2015

Today’s business traveler is, well, busy.  Life on-the-road is jam-packed will meetings, presentations, more meetings, and squeezing in normal work when a few, fleeting, free minutes permit.  Needless to say, with all the multi-tasking and working late, it’s a wonder that business travelers even have a minute eat.  Which brings us to our point.  They don’t.  The problem for emerging travelers today, is that they barely have a second to sit down, let alone sit down and enjoy a table service meal.  As a result, the business traveler will run across the street to the closest mini-mart or Starbucks and grab something quick and easy to settle the hunger pangs.

With the resurgence of business travel, hotels have seen an increase in demand for more convenient dining options.  Thus, the grab-and-go concept has emerged as perfect alternative to traditional dinning.  Not only does this concept drive sales by providing guests with flexibility, efficiency, and control; it allows hotels to create menus and pricing that cater to the demands of each location’s target demographic.

Grab-and-go options meet the flexibility needs of the business traveler.  With so many appointments, time constraints, and hours spent working late, it is virtually impossible for any traveler to adhere to any semblance of a normal eating schedule.  Instead of trying to rearrange work in order to get to the hotel restaurant before close, the grab-and-go provides a cost-efficient alternative that allows guests to purchase meals when it is convenient for them.

Additionally, the grab-and-go’s give greater control to the guest.  By offering a variety of nourishing foods, with better ingredients, and gluten-free, vegetarian, and vegan options, the guests have complete control over which foods align with their specific dietary needs, and are able to fuel their bodies appropriately.  The grab-and-go concept can be extremely successful for any hotel, as long as it is understands what the guest wants, and can provide the food options that meet the guest’s needs.

It is important for hotels to consider expanding to grab-and-go options.  Not only does the grab-and-go provide guests with convenient, healthy, and cost-efficient options, it is a revenue generating opportunity for the hotel and ensures that guest money spent on food and beverage is kept in-house.

Richfield Hospitality’s Best Practices in Controlling Credit Card Fees in Hotels

July 6, 2011

By: Lee Rossiter, Chief Financial Officer at Richfield Hospitality

Credit card processing fees are a significant expense for any hotel.  Fees can average 2% of annual revenues; so for a property with $10 million in annual revenues, fees would be $200,000.  But, who’s to say your fees shouldn’t be 1.8%, which equates to a $20,000 savings? (more…)

Costs Shouldn’t Come in the Way of the Guest Experience: Labor Expenses, Staffing, and Scheduling within Hotels

May 3, 2011

By: David Earl, Corporate Centralized Controller at Richfield Hospitality

One of the most controllable expenses in a hotel is labor.  Having the right number of employees scheduled to work each day is paramount to the guest experience and controlling the labor costs.  Too many employees scheduled will result in lost profit and having less work to do.  On the other hand, having too few employees scheduled results in work standards not being met, employees feeling rushed and stressed, along with guest complaints about the service and product quality they receive during their stay. (more…)

Why a minute in a hotel is so important – as it relates to profits

February 28, 2011

By: Robert Ferree, Vice President of Operations at Richfield Hospitality


During my travels to various hotels across the country I notice the ways things are done or not done.  I speak with many managers about the performance of their hotels and performance of their competitors.  Many of these managers spend time grumbling about the things they have no control over and how it’s impacting their bottom lines.  I usually walk away wondering why the managers are not focused on those things in which they ARE in control of that would help increase profits.   (more…)