Case Study: Inn on Barons Creek

While the management of all of our properties is guided by the same principles, each property presents a different opportunity. Below is a case study on one of our properties — Inn on Barons Creek. This hotel is located in Fredericksburg, Texas, and was purchased in June 2008. In spite of the ensuing recession, we have made great strides in improving the profitability of the property.

Technical Improvements:

• Under Live Oak Lodging management, the hotel was connected to the Global Distribution System (GDS, Travel agents) through a system that allows travel agents and consumers to make reservations more easily.
• We replaced the hotel’s Property Management System (PMS) that cost $6,500 annually per the maintenance agreement with a new system. The purchase price for the new system and one year of maintenance was less than just one year of maintenance with the old system.
• The new Property Management System (PMS) also allows for real time, two-way interface, reservations by travel agents (via GDS), and consumers (via the website).

Marketing:

• Under Live Oak Lodging management, a new logo and hotel signage were developed to ensure potential guests were drawn to the property.
• We also began an online advertising campaign, which provided an ROI of about 40 to 1.

On-Site Improvements:

• Our management team built and set up a gift shop in the hotel lobby, which yields a profit of $600 per month. More importantly, this added amenity has helped to increase RevPAR by nearly 17%.
• Inn on Barons Creek employees received new uniforms to unify the staff, and ensure guests knew who to ask for help.
• Live Oak Lodging redecorated the hotel’s common area to reflect the upscale Hill Country experience guests were seeking.

Money-Saving Measures:

• Our management team renegotiated the credit card discount program, which saves on each transaction.
• Live Oak Lodging installed energy efficient lighting.
• We also obtained national purchasing agreements for cleaning and laundry supplies, and also linens and hotel supplies.

Results:

Results: Within 18 month of purchasing the hotel, the Inn on Barons Creek revenues have increased by 16% and House Profit has increased by 28%.