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Hospitality / Customer Story / The Zetter Group

The Zetter Group

The Zetter Group is one of London’s hippest boutique brands. The Zetter Hotel first opened in Clerkenwell in 2004 and is widely regarded as London’s first boutique hotel built using environmental principles. The hotel was then joined by The Zetter Townhouse Clerkenwell in 2011, which was designed to feel like ‘the private home of an eccentric great aunt’ and houses a cocktail bar that was named the Best Hotel Bar in the World the year it opened. The Clerkenwell site was subsequently followed in 2015 by the opening of the 24-key The Zetter Townhouse Marylebone.

Although they currently have 96 rooms spread between several historical townhouse properties in the capital, specialist hospitality investor Orca Holding bought The Zetter Group in 2021 and is now paving the way for new Zetter sites to be rolled out across the UK and internationally and that means some big changes to their tech stack.

One of the first changes made after the acquisition was switching to a true cloud-based PMS that could slingshot them into the future – Apaleo was the easy choice. But that was just one of the first transformations they are making to make Zetter a global brand. With a background in both the boutique and corporate hospitality worlds, Arnold Linares now heads up the Revenue & Distribution team for the group. We spoke to him about the revenue transformation taking place.

Old school frustrations

“I joined Zetter earlier in the year under the new ownership team and, beforehand, there was no real RMS in place. Up until then, it was all done with basic flat rates as if it was one of those old fashioned Spanish beach hotels. It was crazy! When I looked at the old numbers, I could see that occupancy levels were already lower than they should have been pre-pandemic – they barely reached 80% in those bumper years – and oscillated wildly. It should have been over 90% and much flatter ideally. But the approach to revenue management before we took over was really laid back…

At previous jobs, I used to use some of those legacy RMS solutions that were always connected to a traditional PMS. They are all very old fashioned and barely let you plug into anything. Furthermore, I always felt that you could only actually make use of those kinds of RMS as long as you had been using that same system for over fifteen years. A lot of the people who are fans of those old fashioned systems are simply the people who have only used that and nothing else. So when looking for an RMS – ease of use was so important. You need to be able to change your setup easily and adapt the system around your needs. Those old systems end up losing you money. We are a small team so we needed something that was intuitive.

We trialled three RMSs that were certified in the Apaleo Marketplace, including Pace, now FLYR for Hospitality. But we quickly discarded the others as we felt they were either too obsolete and designed to work with a legacy dinosaur PMS, which was not the philosophy we wanted, or they were just too basic. One took me a few months just to extract some basic reporting information!

Pace (FLYR for Hospitality) on the other hand, were confident that they could let the performance speak for itself. Within a few days it was all up and running and I was able to extract reports quickly. Within two clicks you can see all the data you need – it’s super easy to use.

Now I can focus on strategy and analysis whereas back in the day I would spend four hours a day just doing price updates. Time wasting is over. In our case, I can now focus on things like strategy around key events instead – like Wimbledon or the recent football matches at Wembley – and think about how to price and cross-sell around those events. Operations and commercial teams are now doing things together more and more as we can plan and actually have the time to do it.”

Rapid implementation

“Onboarding an RMS used to always be a painful process to go through. It often takes a minimum of one year for the algorithm to get used to everything and you have to keep managing and capping it everywhere over several months and to keep monitoring it. In the end, the system is effectively unusable for that entire onboarding period. You just can’t trust it. Meanwhile, some other RMSs are just fancy spreadsheets online. It’s stuff you already have and they don’t add much value.

“Now I can focus on strategy and analysis whereas back in the day I would spend four hours a day just doing price updates.”

One of the biggest assets is how super easy it is to implement. It really links into a cloud-based PMS like Apaleo seamlessly and, most importantly, the process doesn’t demand loads of historical data. We switched on automation after just a few weeks and it worked almost perfectly immediately. I only had to monitor the first few days but then it was up and running. The algorithm learns so fast from the settings you provide. For example, it won’t go crazy and suddenly inflate your price by £500 like the other RMS always do. ”

Instant results

“As I mentioned, within a few weeks of onboarding we decided to switch on automated pricing. I really trust the engine. For example, it was running everything while I was on holiday recently and nobody needed to interfere at all. I’m finding that it rarely needs any oversight. As each week goes by, I check it less and less.

I’m particularly happy with the automation and pricing because of the focus on using primary data. The other RMS out there are all too focused on compsets, so much so that you always need to tell the system what hotels are nearby. It’s an approach I fundamentally disagree with – one simply doesn’t know the details of what the competitors are doing strategically. What is based on pure demand? It’s all about primary data and Pace (FLYR for Hospitality) is outstanding in their approach to this.

For example, let’s say you get a big group cancellation last minute even though the compsets are all still looking high. If your system is overly focused on the competition your pricing will always stay high even though you may be looking to get some business in on account of that large cancellation. That’s just wrong in my opinion. A high compset price is not necessarily a sign of demand.

“Our pricing used to be more static around £400 but now it is oscillating around the £500 mark and selling well. The algo just keeps learning so fast…”

This summer we have done relatively well considering the pandemic. Historically, August was always dead but this year – and taking into account COVID – we’ve been hitting over 60 percent occupancy and our ADR is not too far out from pre-pandemic levels of 2019. For example, we’ve been focusing on our Suites more and more and our pricing used to be more static around £400 but now it is oscillating around the £500 mark and selling well. The algo just keeps learning so fast…”

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