Not-for-profit accommodation provider, YHA Australia was in survival mode for two years after COVID hit due to the closure of international borders, which affected 70% of the organisation’s customers. 

Frequent interstate lockdowns also impacted a good portion of its remaining domestic business, with occupancy rates plummeting to as low as 10%.

YHA Australia initiated a technology-led business transformation that has resulted in a simpler, leaner and stronger organisation. Its small technology team, led by chief information officer, Popy Bernardo overhauled the organisation’s technology stack in 12 months. This provided operational efficiencies during the most challenging time in YHA’s 80-year history.

Most notably, Bernardo and his team introduced key innovations that have helped YHA Australia make a profit for the first time in two years.

An AI-driven automated pricing engine, based on demand, automatically changes every room and bed type pricing each hour and 365 days ahead. Bernardo says this game-changing solution has delivered huge efficiencies and improved revenue, ensuring the organisation can squeeze out every dollar possible when there is demand while lowering pricing where there is not.

“Prior to this automation, pricing updates were done weekly at best and required three upstream systems to be manually changed. This innovation increased occupancy rates from 36% to 61% in the 12 months to June 2022. It also increased our average bed rate by 20% from $29 to $35,” Bernardo tells CIO Australia.

A centralised reservations function uses modern call centre functions to manage booking enquiries across all YHA-owned properties. This has improved the consistency of customer experience and revenue by reducing call abandonment rates and missed opportunities from 21% in 2019 before the pandemic hit (equating to 40,000 calls) down to 8% in June this year.

This innovation also freed up time in the property to focus on delivering better guest experiences.

An accelerated cloud-first adoption program replaced all business critical, on-premise legacy systems with integrated cloud native solutions for property, revenue and reputation management tasks. The move to the cloud has enabled YHA to simplify its operations, reduce maintenance on on-premise systems while improving the organisation’s cyber security posture.

Bernardo and his team have also elevated the guest experience by enabling customers to self check-in, while a Guest Mobile app lets them to access their rooms, connect with people in the hotel, and join property activities.

A messaging platform also includes automated tracking of guest sentiment three hours after check-in while stay extension offers a day before check-out.

Self check-in and the guest app has changed the way the business operates by delivering a more personable experience using digital technology.

“We have turned the typical transactional dialogue into more meaningful engagement by allowing guests to self check-in, settle their bill and access their digital room key,” Bernardo explains.

“This changed our typical reception roles into roaming concierge, greeting guests as they walk in and having conversations about their travel plans after they have checked-in”.

He adds says that app and messaging automation allows YHA to stay connected with every guest which could not have been done in person. This helps YHA understand guest sentiment during their stay while offering them extensions.

“This has resulted in happier guests (93% positive sentiment), 17% uptake of stay extensions, and converting agent customers (guests who book through booking.com etc) to YHA customers. This has lowered our commission costs and increased revenue”.

New voice at the table

In 2020, Bernardo’s reporting line changed from the CFO to the CEO and he joined the executive leadership team. This has allowed him to pitch the transformation agenda and get buy-in from other executives.

He also convinced the leadership team to incorporate a pillar on technology innovation in YHA’s Strategic Plan 2021-2024 for the first time.

“The strategic plan is approved by the board and supported by a key business measurement (revenue per FTE), with the board updated monthly through the CEO report while presenting each quarter to ensure we are on the right track,” Bernardo notes.

“This way, we have been able to incorporate technology into every aspect of the business’ strategic objectives and discussions”.

In 2021, while undertaking the transformation initiative, Project Elevate, Bernardo influenced the CEO and executive leadership team by agreeing on key principals that the team would abide by when they were challenged.

“This is to ensure we are able to execute a large transformation project successfully on time and on budget, and not be subject to delays due to customising technology to mould around legacy business processes,” Bernardo says.

“This often happens with large transformation projects to appease stakeholders and functions that have the loudest voice and are resistant to change”.

Byron Connolly