Samesun Hostels have been offering awesome accommodation for backpackers and travelers across Canada and the US for the last almost thirty years.
They currently operate over ten properties – from large cities such as Los Angeles and Vancouver to smaller mountain properties such as Banff – and they have been growing rapidly over the last year or two. But they have needed to make some big changes technologically to be able to scale up…We spoke to Director Stephen De Hertogh about how they have transformed things.
Old school frustrations
“We were manually changing our pricing every day – it was a lot of work and not very accurate. Our approach wasn’t scientific at all. So switching to automated pricing became a key goal of ours. During the pandemic, we doubled the number of hostels we ran and the old manual way was not something we could scale with our growth. We would have needed to hire several more people to cope.
We were recommended Pace, now FLYR for Hospitality, by several hostel chains as it was ‘hostel’ friendly with the ability to handle a more complex inventory mix. Other revenue management systems force you to sell everything as a ‘room’, which is far from ideal and also meant we could not extrapolate decent data. In our opinion, it is a finished product unlike many of the other RMS vendors out there.
We also agree with their philosophy when it comes to pricing. I come from an economics background and believe firmly in the laws of supply and demand. It really doesn’t matter what your compset is doing and we should simply be looking at supply and demand. It’s what I really like about the pricing algorithm – it’s all about demand. At the end of the day the system is there to sell beds!
Oh and onboarding was super fast and simple and customer support is top notch! A rare thing in the old school hospitality tech space…”
“As we roll out across our properties, we are gradually switching on automated pricing. January and February tend to be our lowest demand months and this year all of our properties reduced revenue in January…except one! January at our property in San Francisco was the best month in some time…and it’s no coincidence that it was the first pilot property to have automation up and running!
When it comes to forecasting versus our internal budgets, Pace (FLYR for Hospitality) has really helped flatten that curve and given us real predictability to be able to run our business. We look at RevPar – it’s the main metric we care about – and now we can manage costs really well and flex our inventory to suit changing demand on the horizon.
We also want our GMs to be able to focus on day-to-day operations and not on pricing. We have over ten properties and now the system allows us to have just one person looking after the pricing of all of them. It has helped increase our revenue, which is awesome, but we are also getting a lot of efficiency savings at the same time.”
“Another big factor for our choice was the business intelligence tool. I used to spend at least three or four hours a week doing analytics. With analytics you put in the effort once to build your dashboards and reports – which is super simple and you can build whatever you want – and then everything is automated from then on. It’s saved us a lot of time.
Beyond saving time, analytics is fundamental to our strategic decision making. We’re particularly keen to look at ‘revenue per square foot’ at our properties and to spot yearly trends. From that we can predict when we should switch dorms to private rooms and vice versa. Being able to rapidly flex our inventory is a game changer and a good BI tool affords us this opportunity. Post-Covid, our room inventory is quickly changing so we have created dashboards to help us pick those trends in advance and be prepared for those changes in demand.
For example, on a seasonal basis we can see that we are going to get more backpackers during the summer months so we can pivot to 6-bed and 8-bed dorms. While during the shoulder period we can see how many more private rooms we may need. Analytics lets us plan for that. Right now we are 50% privates vs dorms. That used to be 10%…”
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