São Paulo / Success Stories

Appraisal, Planning and Implementation - Pérola Búzios, São Paulo (Rio de Janeiro)

Project
The property, opened in July 2004 as "The Pearl Hotel", was initially conceived as a 60 room design hotel in Búzios, an upscale coastal destination near Rio de Janeiro, Brazil. A spa component was planed as a possible future investment. In 2005, a radical change in the market positioning of the property occurred. By becoming a part of the Nikki Beach chain of high class beach bars, the hotel tried to transform itself into a "party hotel", a status it never quite achieved because of its design characteristics, inadequate for the proposed experience, and the lack of demand for the concept in Búzios. An even greater problem was that the management was handled to professionals unfamiliar to the hotel business, to a point that the property's image became damaged in the eyes of clients, suppliers, employees, local community, press and distribution channels. The hotel's RevPAR was low, primarily due to extremely low occupancy rates, resulting in consistently negative GOP numbers.

The HVS Assignment
In July 2005, HVS São Paulo was contacted to perform the appraisal of the property. After presenting the findings of the appraisal to the owners of the hotel, HVS International was hired for a four month period (September through December, 2005) to restructure the organization, optimize business operations and intervene in the daily operations until a new General Manager could be hired. In October, the hotel began its market repositioning, disassociating itself from the Nikki Beach chain, adopting the name "Pérola Búzios" and readopting its original concept of design hotel. After the conclusion of the intervention phase and the employment of a new General Manager, HVS International prepared the property's complete Business Plan, conceived to orient owners and operators in the operation of a successful hospitality business venture.

Results
As a result of the work of HVS International and the ensuing administrative changes, overall performance began to improve. The following is a list of the primary results of the project:

• Human Resources and the Quality of Service: a number of key employees were substituted and training activities were organized. From a managerial stand point, results were immediately perceived through the increase in the quality of service, motivation by the entire staff and guest satisfaction.
• Analysis of the Accounting and Internal Control Systems: a manual financial analysis system was temporarily implemented to assess the daily sales results and track monthly revenues and expenses (P&L). The result of these reports was as series of initiatives undertaken to improve performance and reduce costs.
• Relationships with the Local Community: HVS conducted a series of actions to demonstrate an altered stance in connection to the hotel’s relationship with the local community (population, executive power, businessmen, suppliers etc.) and to present its new management team.
• Property Infrastructure: the hotel facilities were analyzed by an engineer. This analysis resulted in the elaboration of a comprehensive report on the state of the hotel facilities, which contained recommendations as to actions to improve the physical infrastructure to comply with local legislation and to allow for smooth running of hotel operations.
• Sales and Marketing: HVS drew up an emergency marketing plan, the basis of the strategic Sales and Marketing Plan, with the objective to attain, in an extremely short period of time, the minimum levels of occupancy necessary to maintain the property operating.
• Overall Performance 2006 x 2005: increase in occupancy (+ 42%) and total revenue (+ 30%), GOP became positive.