A case from the Group's work; some details have been altered to protect strict confidentiality. The figures in the worked model below are illustrative and disguised, not the client's.
The situation
A hospitality property in a good location with a sound physical asset, but performance clearly below its potential. The first reading inside the property was that the cause was marketing: more campaigns would fix it. The first reading in such cases is rarely the cause. The market itself was not the obstacle: hotel room occupancy in the Kingdom reached about 63% in the first quarter of 2025, up 2.1 percentage points on the same quarter, according to the tourism establishments release of the General Authority for Statistics, with an average daily room rate of about SAR 477. A property working below both figures in a good location carries its problem inside.
The diagnosis
The operational review by IAD Business Services Group showed a threefold problem: an operating model that depended on particular individuals rather than a system, a brand promise inconsistent with what the guest actually experienced, and a pricing structure chasing occupancy at the expense of value. Campaigns would have increased the number of people trying the current experience, which was the experience that did not warrant a return. Dependence on individuals is not this property's problem alone: 983 thousand people work in tourism activities according to the same release, 24.8% of them Saudi, in a sector where talent turns over quickly, so a property that keeps its knowledge in employees' heads loses it with every resignation.
How we worked
- Operations: mapping the paths the guest travels, and turning what depended on a person into a written procedure that can be trained and measured.
- Operating model: redefining roles and limits of authority, with a weekly review rhythm for a limited number of indicators.
- Identity and promise: rebuilding what the brand promises to match what the property can deliver every day, not on its best day.
- Pricing: moving from chasing occupancy to managing value, with declared rules for the working teams.
The order we kept to
- Diagnosis first: six weeks of field observation and reading the numbers, with no marketing decision.
- Fix operations: written procedures and training on them until the guest experience is the same on a peak day and a quiet day.
- Align the promise: rewriting what the brand says to say what the property actually does.
- Pricing rules: rate floors by season and day, and discount authority by name.
- Relaunch last: when the experience deserved to have anyone invited to it.
The order was deliberate, not conventional. A relaunch before the fix would have spent its effect on an experience that had not changed, and turned the marketing budget into a public invitation to experience the problem. A relaunch after the fix builds on an experience that warrants a return, and a return is the cheapest marketing hospitality knows.
A promise the property can deliver every day
Rebuilding a brand promise in hospitality starts from one question: what can we deliver on our worst day, not our best? The property promised a luxurious experience in its images and copy, delivered a good experience on quiet days and a faltering one on peak days, and a guest measures the promise by the worst moment, not the best. The promise was rewritten to say less and keep it always: cleanliness, responsiveness and quiet, three things a written procedure can guarantee in every room every day. Guest ratings rose before the building changed, because the gap between what was promised and what was delivered was closed from the promise side as much as from the delivery side.
The visual identity came after the promise, not before. Logo, colours and photography were adjusted to say the same thing the reception and the room say, and that is an order IAD Business Services Group keeps in every repositioning file: operations define the promise, the promise defines the identity, and the identity defines the campaign. A property that starts from identity buys beautiful pictures of an experience that has not changed.
A worked model: from chasing occupancy to managing value (illustrative, disguised)
The shift from occupancy to value is measured by one number, revenue per available room, not by occupancy alone or rate alone. In an illustrative model for a property with one hundred and twenty rooms, rooms sold at an average of SAR 380 to reach 58% occupancy, giving revenue per available room of about SAR 220. After the experience and the pricing rules were fixed, the average rose to SAR 450 and occupancy rose rather than fell, to 62%, because a returning guest does not negotiate the rate.
| Indicator | Before | After | Change |
|---|---|---|---|
| Average daily rate | SAR 380 | SAR 450 | +18% |
| Occupancy | 58% | 62% | +4 points |
| Revenue per available room | About SAR 220 | About SAR 279 | +27% |
| Annual rooms revenue (120 rooms) | About SAR 9.6 million | About SAR 12.2 million | About SAR 2.6 million more |
The arithmetic: SAR 279 minus SAR 220 is SAR 59 per available room per day, multiplied by 120 rooms and 365 days gives about SAR 2.6 million of additional annual revenue from rooms alone, with no new room and no campaign. The market reference was known: the Kingdom's hotel average is SAR 477 according to the General Authority for Statistics, and the property was selling a hundred riyals below it for no reason other than that its experience did not justify more.
Three errors in the first reading
- Confusing occupancy with success: the property celebrated high occupancy in peak seasons and ignored that the rate it bought that occupancy with did not cover the cost of the service a guest expects at that location.
- Believing a new guest is cheaper than a returning one: campaigns bring a first guest at an acquisition cost; a good experience brings the same guest back at no cost; the property was spending on the first and losing the second.
- Explaining resignations by the labour market rather than the operating model: an employee who carries the procedure in their head carries an authority the written procedure lacks, and leaves when asked to hand it over.
The three share one trait: they are comfortable readings, each placing the cause outside the property, in the market, the staff or the marketing budget. The correct reading was less comfortable and cheaper to treat: the problem was inside, and its cure needed no new room and no campaign, only a written procedure and a rate rule.
Why pricing was chasing occupancy
Pricing that chases occupancy is not a decision but the absence of one. When there is no declared rule on discount authority, every front-desk employee becomes a revenue manager and grants the discount because it is easier than apologising, so discounts accumulate until the published rate is a number nobody pays. The rule that was put in place had three parts: a rate floor for each season and day of the week, discount authority defined by name and percentage, and a weekly report comparing achieved rate to published rate. In the first month the average rate rose before anything changed in the experience, because the discount that had no reason simply stopped.
After the mandate
The effect that remains after the adviser leaves is the real test of any repositioning. IAD Business Services Group left four things in the property that work without its presence: a procedures manual every new employee is trained on in the first week, the declared pricing rule, the weekly meeting where revenue per available room is read before anything else, and a documented guest path reviewed every quarter. A property that has these four does not need a second repositioning, but an annual review that asks one question: is revenue per available room still moving in the right direction, and if not, which of the four has stopped working? The answer usually arrives from the weekly meeting before the annual review reaches it.
The result
A relaunch of the property, and recovery of its competitive position and profitability. The order was deliberate: the experience was fixed first, then the relaunch. What stayed after the mandate ended was the written procedure and the declared pricing rule, because neither leaves the property with whoever leaves it.
What can be learned
When the asset is sound, the location good and performance below potential, the cause is usually the operating model, not demand. Marketing multiplies what exists, good or bad. IAD Business Services Group starts in hospitality assets from revenue per available room and from the guest path, not from the campaign plan, because a campaign buys the first visit only, and operations buy the second.
Marketing multiplies what exists. Fix what exists first.
Sources
- Tourism establishments statistics, Q1 2025, General Authority for Statistics (63% occupancy, SAR 477 average rate, 983 thousand workers).