CLIVE TAYLOR Vice President-Operations Easy Ez Revenue Management

CLIVE TAYLOR Vice President-Operations Easy (Ez) Revenue Management Solutions

How an Automated Revenue Management System can assist Pricing and Distribution in both Prosperous and Difficult Times. Easy (Ez) Revenue Management Solutions

Who Are Easy. RMS • Introduced 1 st ASP based RMS 10 years ago enabling easy access and upgrades from any computer • Over 30 years combined hospitality experience • Offices in the UK, France, USA, Canada, China, Singapore and Australia, and distributors in Europe, North America, South America and Asia Pacific. • Supplying automated solutions to world leading hotel chains Easy (Ez) Revenue Management Solutions

Some of our clients (In alphabetical order) • • • • • Accor Worldwide Assured Hotels Best Western Hotels Brochner Hotels Capella Hotels Crown Plaza Centennial Hotels Chester Grosvenor Hotel & Spa Colonial Williamsburg Elite Hotels of Sweden Express by Holiday Inn First Hotels Great Wolf Resorts Hasting Hotels Hershey Entertainment Group Holiday Inn Hotel Amsterdam Hotel Fouquet’s Barrière Hotel Le Bristol Paris Easy (Ez) Revenue Management Solutions • • • • • Leading Hotels of the World Lloyd Hotel-Amsterdam Lucien Barrière Magnolia Hotels Millennium Hotels NH Hotels Nickelodeon Family Suites No Ordinary Hotels PGA Resort Preferred Hotels & Resorts Worldwide Radisson SAS Radisson Edwardian Ramada Small Luxury Hotels of the World St George Lycabettus Hotel Summit Hotels The Madison Concourse Hotel Trump International Hotels

The World is a new place • New way of doing things- challenges, opportunities, pressures • Technology is vital to our industry and has to be used effectively • Guests know what they want and use the new technologies • IT solutions (RMS) need to provide quick, easy to use and accurate information Easy (Ez) Revenue Management Solutions

Do you need a RMS? • Do you have enough time to devote to Strategic thinking/planning? • Are you involved in key decision making on rates and pricing, channels and groups? • Are you maximising your revenue opportunity? Easy (Ez) Revenue Management Solutions

Do you need a RMS? • Are you managing all your channels effectively? • Do you and your company have enough decision support information (Management Information) • Do you know what you competitors are doing? Easy (Ez) Revenue Management Solutions

How an RMS assists • Increased revenues by maximising and protecting rates when necessary • Obtain a net increase in revenue between 4 -7% • Accurate statistical reports future, current and historical • Detailed demand forecasting information for sales and marketing Easy (Ez) Revenue Management Solutions

How a RMS assists • Management Information reports of real time information on group wide basis • Additional benefits for additional information – Competitor analysis – Group Analysis – Series Analysis Easy (Ez) Revenue Management Solutions

What is happening today in terms of: • Distribution • Strategy • Pricing Easy (Ez) Revenue Management Solutions

Selling is no longer tied to production but to distribution. Peter Drucker on e-Commerce. Easy (Ez) Revenue Management Solutions

Unmanaged Trends • Unmanaged-corporate refers to small to medium sized corporate customers who are not subject to strict travel policies, do their own travel and expense management. • These customers often buy BAR or promotional discounts and often cross into leisure. • Distribution companies have recognized this “blurring” and aggregate inventory that serves all segments • In the US and Europe Brand Online share have exceeded Agency Online and the gap is continuing to widen. . Easy (Ez) Revenue Management Solutions

Distribution Macro Trends • Travel has gone online: one in five hotel bookings globally and almost half in the US are made online. • The Big 3: (Expedia, Travelocity and Orbitz) combined share of online travel agency market is 90% in the US, 60% in Europe. • Particularly in this downturn when customers actively seek “deals”, owning availability and pricing online is paramount. • Losing control of pricing and inventory in this downturn will wipe out all the gains made post 9/11 by hotels. Easy (Ez) Revenue Management Solutions

Revenue Management Strategy Target corporate and leisure customers not by channel, or price, but by “behavior”. Easy (Ez) Revenue Management Solutions

Revenue Management Strategy • Improve segmentation and target specific groups: – small business owners who are road warriors – corporate customers who travel with spouse – upscale vacation travelers, etc… • A deep understanding of customer booking and stay behavior is a must. Easy (Ez) Revenue Management Solutions

What to consider • • Seasonality Arrival patterns Booking Lead time and Pace Average LOS Total Spend Competition Price Changes Price Sensitivity Easy (Ez) Revenue Management Solutions

Importance of Pricing • The number one reason why online travelers switch sites is still overwhelmingly price. Half (51%) of all online travelers switched to an alternative site for this reason. • The next two forces were convenience and selection, each at 10%. • Consumers would rather purchase travel directly from hotels, as long as they were guaranteed that the prices they saw were the lowest available. Easy (Ez) Revenue Management Solutions *Source Pho. Cus. Wright 2007

What Pricing Objectives • • Customer focused Easy to understand Drives direct sales Optimise demand maximise Rev. PAR Easy (Ez) Revenue Management Solutions

To Discount or Not to Discount? • When faced with tough economic times, many hotels discount in hopes of stimulating demand, capturing additional market share and boosting revenue. • Does discounting generate demand? Does it vary by customer segment, hotel segment and demand period? • Does discounting lead to gaining market share in revenue and profit? • How long does it take for the discounted rates to return to normal rates? Easy (Ez) Revenue Management Solutions

Research Findings • Discounting fills rooms. But it comes at a cost to revenues and profit. • Between 2001 and 2004 (recessionary period of 20012003 and a strong recovery year of 2004), hotels which discounted against the direct competition did gain market share but did not get higher Rev. PAR. • This result carried through to all price segments, location types and primary and secondary markets. Source: Cornell University, The Center for Hospitality Research Easy (Ez) Revenue Management Solutions

Research Findings • The research finds that hotels cannot steal market share by discounting. • Regardless of whether they achieved gains or losses in relative occupancy, hotel that discounted recorded the smallest relative Rev. PAR. • In contrast, those that priced the most above the competitive set lost occupancy but gained the most in Rev. PAR. • Similar study was published in 2008 for the Asia Pacific hotels with virtually the same result. Easy (Ez) Revenue Management Solutions Source: Cornell University, The Center for Hospitality Research

Ideas for pricing • Bar/Dynamic-Demand based pricing • Should you follow the competitors • Contract Agreements – Win/win partnership – Discount to win market share – Regular reviews Easy (Ez) Revenue Management Solutions

So How can an Automated Solution Assist? Easy (Ez) Revenue Management Solutions

Five Core Components • Knowledge Database – Understanding of products and market motivation • Forecasting – By behaviour pattern • Optimisation – Choosing the optimal revenue Easy (Ez) Revenue Management Solutions

Five Core Components • Control – Ensuring optimal revenues are achieved by translating the optimal results into control values understood by the user, PMS or CRS. • Communication – Communicate controls internally & externally Easy (Ez) Revenue Management Solutions

Overview of Ez. RMS™ Easy (Ez) Revenue Management Solutions