In this article, we will share the story of how the use of Atomize has helped Yasuragi adopt new improved ways of handling their price optimization and increase their RGI, hence their market share by 47,3% during the pandemic.
Yasuragi’s Revenue Manager, Charlotte Thulin shares the story of how they handled last year’s challenges and managed to capitalize on the leisure segment. Charlotte has 11 years of experience in handling different positions within Yasuragi and she has broad expertise in sales, marketing, and revenue management.
Yasuragi, part of Nordic Hotels & Resorts is one of Atomize’s most iconic customers. The Yasuragi – Japanese Spa- and Conference Hotel, is a unique Spa and Conference Hotel built with Japanese lifestyle as the source of inspiration. It is beautifully situated on the outskirts of Stockholm and has a touch of Japanese high design throughout.
Yasuragi is the perfect place for modern urban citizens to escape the demands of their everyday routine. Yasuragi offers 191 Japanese-themed rooms and suites, 3 restaurants, and a 500 m2 rooftop terrace facing the sea.
At the heart of Yasuragi, you will find a beautiful 3000-square-meter Japanese bathhouse with a mix of indoor and outdoor hot springs, a variety of saunas, quiet lounges, a Dojo for activities and treatments, and a Japanese washroom.
With the use of Atomize RMS, Yasuragi has taken their tactical pricing to a new level based on automated dynamic room pricing and the possibility to better capitalize on future demand with the right rates and offers.
A year of challenge and adoption
Yasuragi did not escape the effects of the pandemic and the last few months have been challenging. The unpredictable market shifts have made it harder to forecast demand, and the government-imposed restrictions have reduced the number of guests Yasuragi has been able to receive. Despite these difficult trading conditions, Yasuragi has experienced strong demand from the leisure segment.
“The need to escape from everyday life and experience new environments has been a way for people to cope with the stress this pandemic has put on our daily lives. Yasuragi offers an escape into a world where you can forget the ongoing pandemic and unwind in a fantastic environment,” says Charlotte.
Yasuragi has experienced stronger than usual weekday demand from leisure guests. The traditional booking peaks on weekends from this segment are now more evenly distributed across all days and Yasuragi has been able to create a profitable mix of day guests, evening guests and short stay guests.
“People have had a bigger flexibility and possibility to control their own time which is directly reflected in the demand,” Charlotte tells me.
To be able to comply with the safety regulations during the pandemic, Yasuragi has only been able to run at half capacity in terms of number of guests and staff. By really understanding their potential guests’ needs and the changes in consumer behavior the available inventory was frequently sold out and as a result, the hotel has performed better than their competition.
When the first wave hit Sweden in March 2020 and the demand stagnated, the hotel management was very quick to adjust to the new environment. The biggest operational changes relate to safety protocols and infection control measures to ensure a safe stay for the guests.
Charlotte also tells me that Yasuragi immediately started to think about how they could do more with less and build an operation with smart technology. While a lot of the technology-centered around the guest, they realized they needed to limit their vulnerability to a volatile market. Yasuragi started to use Atomize to optimize their room rates in June 2020; Charlotte quickly realized the benefits of having an RMS that detects market changes instantly and adapts to them in real time.
“During the past year we’ve had no clue as to how the demand would fluctuate but with Atomize, we have been able to detect changing demand immediately and, as a direct response, instantly adjust our rates accordingly,” Charlotte says.
Product offering and guest expectations
Charlotte tells me that they started seeing new and diverse requests from guests traditionally not encountered. Requests for outdoor activities and early arrival and late check-out have all increased. The new guests want to maximize their time spent at the property and absorb the calm and relaxing Japanese world that Yasuragi offers. To better meet the demand from the leisure segment, Yasuragi has re-packaged some of their offerings to include outdoor activities as well as themed packages that relate to the Japanese seasons. This has also been a way to strengthen the Japanese brand and present a clearer product offering.
«For us, a big part of the Yasuragi experience is the expectations you have prior to your visit as well as the feeling and mindset that lingers after a guest has spent time at Yasuragi. That good feeling of relaxation and calmness is the ultimate proof that we have managed to deliver the Yasuragi experience to the guest,” says Charlotte.
The perception of Yasuragi and what to expect starts very early in the customer journey, and in this respect, pricing needs to be a reflection of Yasuragi’s high-end product. For us, it’s extremely important to keep the expectations correct in relation to our brand.
“The latest year Atomize has helped us to improve ADR and room revenue and avoid any price wars with our comp set. Atomize has managed to instantly pick up on changing market demand and the algorithm has increased the rates accordingly which has led to growing ADR and a RevPAR up to 2,5 times better compared to the market.»
Charlotte emphasized that during this year they have re-shaped and slimmed the organization to balance revenue and costs. The recognition that automation and the creation of a flexible organization that is not person-dependent was an important factor in their success. Charlotte believes Atomize is a great outcome of this thinking.
One step ahead of the competition with Atomize
The big difference prior to how Yasuragi used to handle their pricing, is that with the use of Atomize, Yasuragi has the advantage of being one step ahead of their competition.
Prior to Atomize, Charlotte would manually adjust rates upwards on days where they experienced a high demand through a rising number of reservations – but the manual approach meant they were acting “too late” and missed revenue opportunities.
With the use of Atomize, the system picks up the booking intentions and indications of high demand before the reservations happen – and results in more bookings at higher rates.
“To be able to instantly respond to indications of changing market demand is the biggest difference from before. With Atomize we are always several steps ahead of our competition,” says Charlotte.
“Prior to using Atomize we only yielded our room rates 1 month into the future and didn’t look beyond that horizon. It goes without saying that we missed potential revenue opportunities,” Charlotte continues.
Atomize sets prices 365 days into the future and adjusts prices dynamically, per room type. Atomize also ensures the optimal combination of room prices across all room types in order to maximize Yasuragi’s total room revenue.
“Especially now when the market is starting to recover with a growing number of reservations and considering the booking window is also increasing, I feel very comfortable in knowing Atomize will optimize our room prizing 365 days into the future”, says Charlotte
By implementing Atomize in the operation, Yasuragi has created a much more efficient and streamlined operation.
“We used to spend around 30 minutes per day setting prices which, with Atomize, is down to a couple of minutes per day.”
With the use of Atomize, Yasuragi have had the best conditions to capitalize on the market demand. Without Atomize, Charlotte doesn’t believe they would have been able to improve their RevPAR and ADR as they have managed to do.
Looking at RGI – the RevPAR index, showing Yasuragis RevPAR in relation to the competitors RevPAR – for resorts from Benchmarking Alliance, Yasuragi has performed much better than the market. The hotel managed to increase its RGI, and hence its market share, during the pandemic by 47.3 %.
Charlotte has a positive view of the future, and she reveals that the summer looks very promising. The on-the-books numbers indicate it will be a strong period in terms of revenue.